Gran Tierra Energy programmed a Long Term Test (LTT) for Costayaco-2 in the next four months. LTT production rates for Costayaco-2 will vary from 1,800 BOPD to 3,500 BOPD from different zones which will be determined and adjusted during the testing period. A 6-inch production flowline from Costayaco-2 to Costayaco-1 has been completed and is expected to be operational by the end of March.
Costayaco-1 continues to produce approximately 3,500 BOPD with 0.3% water cut. Gran Tierra Energy will continue utilizing trucks for transportation of crude from Costayaco-1 and new crude from the Costayaco-2 to the existing pipeline infrastructure at Uchupayaco. Pipe has been delivered to the field, and environmental permits have been approved, to initiate construction of an 8 inch 10 kilometer pipeline from Costayaco-1 to Uchupayaco. This production line will replace the current trucking operations and Gran Tierra Energy expects it to be completed in June.
Work is underway to reduce production constraints beyond Uchupayaco in order to accommodate potential production growth from Costayaco, which is expected to rise to 6,000 to 9,000 BOPD gross during the second half of 2008. Gran Tierra Energy is currently evaluating a second stage of infrastructure expansion, to incorporate additional drilling through the balance of 2008 and potentially into 2009.
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