Gran Tierra Energy Inc., a company focused on oil exploration and production in South America, announced that it had begun testing operations on Costayaco-3, a new well drilled in the recently discovered Costayaco Field. In parallel, Gran Tierra Energy's exploration operations are advancing in Colombia, Peru, and Argentina.
Gran Tierra Energy commenced testing operations for Costayaco-3, the third well drilled in the Costayaco field, a new oil field discovered in 2007, on March 19. The Costayaco field is located in the Chaza Block in the Putumayo Basin, where Gran Tierra Energy has a 50% interest and is the Operator; Solana Resources holds the remaining 50% interest. The well drilled through the same reservoir sequences encountered in Costayaco-1 and -2, reaching a total depth of 8,620 feet on February 20.
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. Good oil shows were encountered through these reservoir sections. Gran Tierra Energy has interpreted a potential oil-water contact from logs at a depth of 8511 feet measured depth (-7260 feet subsea) in the lower Caballos Formation, approximately 34 feet lower than the lowest known oil in Costayaco-2. No evidence of an oil-water contact has been identified in the other potential pay zones.
Gran Tierra Energy expects testing operations to last for approximately one month. Similar to Costayaco-2, which tested a maximum of over 6,600 barrels of oil per day (BOPD), only the primary T Sandstone and Caballos reservoirs will be tested.
Gran Tierra Energy initiated drilling of Costayaco-4 on March 16 and is expected to take approximately six weeks to drill. Costayaco-4 will be a deviated well drilled from the Costayaco-2 pad, and will have a bottom-hole location approximately 541 meters to the north. The drilling operations will include coring of key reservoir intervals. Testing of Costayaco-4 will follow. Gran Tierra Energy has budgeted drilling of Costayaco-5, -6 and -7 for 2008.
Commenting on progress, Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy Inc., stated, "2008 is off to an extremely strong start. Production for the first two months of 2008, net after royalty, has averaged 3,126 BOPD. With field delineation drilling operations, production testing operations, exploration drilling operations, and remote sensing data acquisition operations taking place across our three operating arenas Colombia, Peru, and Argentina, we are on track to have another extremely successful year as we continue to build a substantial international oil and gas company."
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