Gran Tierra Energy has successfully completed the drilling of the Costayaco-2 well in the Putumayo Basin of Colombia and has initiated preparations for testing the primary hydrocarbon reservoirs encountered.
Costayaco-2 is the second well to be drilled in the Costayaco field, an oil field discovered in the Chaza Block in the second quarter of 2007. The well is located 560 meters northeast of the Costayaco-1 discovery well. Drilling of Costayaco-2 was initiated on December 6, 2007 and total measured depth of 8,600 feet was reached on January 2, 2008. The well bore has been cased and the Pride-17 drilling rig was released on January 8, 2008.
Costayaco-2 encountered the same reservoir sequences with similar good oil and gas shows as were encountered in the Costayaco-1 discovery well. Initial log interpretations from data acquired during drilling indicate potential hydrocarbon pay in the Kg Sand Unit of the Rumiyaco Formation, the U Sandstone Unit of the Villeta Formation, the T Sandstone Unit of the Villeta Formation and the Caballos Formation. Preliminary log interpretations indicate better reservoir quality in the T Sandstone and the Caballos Formation compared to Costayaco-1.
The Pride-6 service rig is being mobilized to initiate testing of the primary hydrocarbon reservoirs encountered during drilling. Testing operations are expected to begin in late January and scheduled to be completed in mid-February.
The Pride-17 drilling rig is being mobilized to the Costayaco-3 location. Costayaco-3 is located approximately 960 meters west of the Costayaco-1 location. Drilling is expected to commence in late January and be completed in late February.
Production from Costayaco-1 has increased to approximately 3,500 gross barrels of oil per day (BOPD), or 1,580 BOPD net after royalty to Gran Tierra Energy, as a result of the commingling of two reservoir zones, the Caballos and the Villeta T sandstone reservoirs.
Crude oil production from Costayaco-1 is currently being trucked to new loading facilities in the existing pipeline infrastructure at Uchupayaco. Potential crude oil production from Costayaco-2 will also be trucked to the same facilities. Construction of an 11 kilometer 8 inch pipeline from the Costayaco field to Uchupayaco is expected to begin in mid-April. Upon completion mid-year, this pipeline will replace trucking operations.
The acquisition of a new 70 square kilometer 3-D seismic program over the Costayaco oil field has been completed. This data is currently being interpreted and will be used to assist with the positioning of future development drilling operations in the Costayaco field. Acquisition of 41 kilometers of new 2-D seismic data to define additional exploration potential in the Chaza Block has been initiated.
Gran Tierra Energy holds a 50% working interest and is the Operator of the Chaza Block. Solana Resources Limited holds the remaining 50% working interest. The Chaza Block is subject to the new and fiscally attractive Agencia Nacional de Hidrocarburos royalty/tax contract which includes no additional state participation.
"The continued exceptional production performance of Costayaco-1 combined with the early positive drilling results from Costayaco-2, the pending initiation of drilling of Costayaco-3 and integration of results with the new 3-D seismic data all bode well for efficiently delineating the reserve and production potential of the Costayaco field, allowing us to plan a full field development, including additional drilling, facilities and pipeline to handle new production as appropriate through 2008," stated Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy Inc.
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