(Gran Tierra Energy Inc., 2 Feb.2015) – Gran Tierra Energy Inc. announced the results of an independent reserve evaluation of the company’s reserves by Gran Tierra Energy’s qualified reserve evaluator GLJ Petroleum Consultants Ltd. (GLJ) effective December 31, 2014.
Through continued strong reservoir management and appraisal drilling in Colombia and Brazil in 2014, Gran Tierra Energy was able to replace production and add reserves. However in Peru, negative well results after year-end will result in reserves being revised downward. The results of the company’s development program in the Moqueta field in Colombia have been encouraging, adding approximately 14% to it’s existing Proved (1P) company interest reserves in that country. Reservoir performance and additional development drilling contributed to positive 1P reserves technical adjustments at Costayaco.
In Brazil, due to new production from the Agua Grande formation, results of seismic reprocessing and additional reservoir volume in the Sergi formation, Gran Tierra Energy successfully increased 1P reserves in that country by 68%. Although 2014 Proved plus Probable (2P) and Proved plus Probable plus Possible (3P) reserves also appear to have increased at year-end, new drilling data from the Bretaña field in Peru subsequent to year-end indicate that the 2P reserves and 3P reserves associated with that field will be reduced after year-end. A new reserve report for the Bretaña field is expected before the end of the first quarter, once new maps, reservoir rock volumes and related data are integrated and evaluated.
Year-end 2014 highlights
Year-end 2014 highlights, calculated in accordance with United States Securities and Exchange Commission (SEC) rules (comparisons are to 2013 year-end amounts) follow:
In Peru, as announced on January 20, 2015, Gran Tierra Energy expects the Bretaña Sur well results will remove all Possible reserves associated with the southern L4 lobe of the Bretaña field booked at yearend 2014.
A reduction in Probable reserves in the field is also expected, the magnitude of which is unknown at the moment.
A new reserve report for the Bretaña field will be provided after analyzing new vertical seismic profile data from the new well, to reconcile the unexpected time-depth conversion encountered by the well against the time-depth conversion from the previous four wells in the Bretaña field that was used for the pre-drill seismic mapping. The new reserve report incorporating the new mapping and reservoir characterization is expected before the end of the first quarter;
Total 1P oil and gas reserves net after royalty (NAR) were 37. million barrels of oil equivalent (MMBOE) at December 31, 2014, compared with 42.1 MMBOE in 2013 (100% light and medium oil and liquids compared with 95% at year-end 2013), and after producing 9.2 MMBOE of company interest oil and gas before royalties, inventory adjustments and losses or 7 MMBOE NAR before inventory adjustments and losses, excluding Argentina production. The decrease was primarily due to the sale of Gran Tierra Energy’s Argentina business unit during 2014 which contributed 4.4 MMBOE NAR of 1P oil and gas reserves at December 31, 2013;
After producing 1.7 million barrels of oil (MMbbl) NAR before inventory adjustments from the Moqueta field in Colombia in 2014, appraisal drilling resulted in increased 1P reserves of 14% to 15.5 MMbbl, 2P reserves increased by 20% to 23.2 MMbbl and 3P reserves increased by 17% to 33.6 MMbbl on a company interest basis, and 1P reserves increased to 11.1 MMbbl, 2P reserves increased to 16.6 MMbbl and 3P reserves increased to 23.9 MMbbl, each on a NAR basis;
The Costayaco field in Colombia continued its strong performance. Costayaco 1P reserves decreased to 19.1 MMbbl NAR at year-end 2014 from 20.2 MMbbl NAR at year-end 2013, after production of 4.2 MMbbl NAR before inventory adjustments in 2014;
In Brazil, due to new production from the Agua Grande formation, results of seismic reprocessing, and additional reservoir volume in the Sergi formation, Gran Tierra Energy successfully increased 1P reserves by 68%;
Total 2P reserves NAR were 108.5 MMBOE at December 31, 2014, compared with 111.9 MMBOE in 2013 (99% oil and liquids compared with 97% at yearend 2013), prior to adjusting for the sale of the Argentina business unit, which had contributed 6.4 MMBOE NAR of 2P oil and gas reserves at December 31, 2013. Total 2P reserves are expected to be adjusted downward with release of the new Bretaña reserve report before the end of the first quarter;
Total 3P reserves NAR were 170.3 MMBOE at December 31, 2014, compared with 183.9 MMBOE in 2013 (99% oil and liquids compared with 94% at yearend 2013). The Argentina business unit contributed 16.7 MMBOE NAR of 3P oil and gas reserves at December 31, 2013. Total 3P reserves are expected to be adjusted downward with release of revised Bretaña reserves within a month;
In Peru, the Bretaña field contributed 2P reserves of 57.9 MMbbl NAR and 3P reserves of 104.4 MMbbl NAR. These are expected to be adjusted downward with release of a new Bretaña reserve report before the end of the first quarter;
Based on Gran Tierra Energy’s 2014 year-end SEC NAR reserves and Gran Tierra Energy’s 2014 total NAR production, Gran Tierra Energy’s 1P, 2P, and 3P reserves life indices are 5.3 years, 15.4 years, and 24.2 years respectively; The 2P and 3P reserve life indices are expected to be adjusted downward with release of the new Bretaña reserve report before the end of the first quarter;
Annual production for 2014, excluding Argentina production, averaged 25,182 company interest barrels of oil equivalent per day (BOEPD) before royalties, or 19,283 BOEPD NAR, both before inventory adjustments, or 18,523 BOEPD NAR adjusted for inventory changes and losses, including 17,619 BOEPD NAR from Colombia, and 904 BOPD NAR from Brazil. Production in the fourth quarter of 2014 was 18,953 BOEPD NAR before inventory adjustments or 17,169 BOEPD NAR adjusted for inventory changes and losses.