Gran Tierra Energy (GTE) to Acquire Two Blocks from Ecopetrol (EC) for ~$30.4M

November 28, 2016 6:09 AM EST

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Gran Tierra Energy Inc. (NYSE: GTE) announced that the Company submitted winning bids totaling a combined $30.4 million for two blocks which Ecopetrol S.A. (NYSE: EC), Colombia's national oil company, offered as part of the Ronda Campos Ecopetrol 2016 ("Bid Round") in an electronic live auction held on November 25, 2016. Gran Tierra's winning bids are for the Santana and Nancy-Burdine-Maxine Blocks, which are located in the Putumayo Basin. Under the terms of the Bid Round, a purchase and sale agreement relating to each block must be submitted to Ecopetrol by December 7, 2016, and executed by December 22, 2016. Gran Tierra intends to finance these acquisitions with cash on hand and available borrowings under its revolving credit facility.

Ecopetrol holds operatorship and a 100% working interest ("WI") in each of the Santana and Nancy-Burdine-Maxine Blocks. Upon execution of definitive documents relating to the purchase of these blocks, Ecopetrol will transfer ownership of the blocks' assets, contracts, permits and licenses, as well as 100% ownership of Ecopetrol's rights and obligations in respect of the oil and gas assets, by entering into assignment agreements with Gran Tierra. Each assignment agreement would be subject to the prior approval of Colombia's Agencia Nacional de Hidrocarburos (ANH).

Key Attributes of Acquisitions

Santana and Nancy-Burdine-Maxine Blocks (100% WI)

-- Aggregate amount of Gran Tierra's winning bids: $30.4 million
-- Gross WI 2016 average production before royalties of approximately 600
barrels of oil per day(1) ("bopd") and estimated 300 bopd behind-pipe(1)
-- Gran Tierra has identified potential upside with enhanced oil recovery
("EOR") waterflooding techniques, and prospective resources on the new
lands from "N" sands and "A" Limestone exploration plays, with mapped
prospects based on existing Company 2D and 3D seismic data
-- Approximately 27,400 gross WI acres(1)
-- Establishes a centralized transportation and production hub in the
Putumayo Basin with strategic, operated, pipeline infrastructure and
gathering facilities which include:
-- 26,000 bopd of pipeline capacity, 25,000 barrels of oil storage and
capacity to load and unload 11,500 and 13,500 bopd by truck,
-- the O.M.U and O.U.S pipelines which connect Costayaco, Moqueta and
Guayuyaco oil fields with Santana Station
-- transportation and commercialization flexibility, which is expected
to further strengthen the Company's competitive advantage in the
Putumayo Basin

(1)As reported in Ecopetrol's Bid Round Summary Flyer - published December 2015

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: "These acquisitions are a continuation of Gran Tierra's focused strategy to build a high-quality, diversified portfolio to efficiently create value in the multi-horizon, proven hydrocarbon producing basins of Colombia. The Nancy-Burdine-Maxine Block provides upside potential through EOR by investing in advanced drilling and waterflooding techniques. Having already established reserves and production in the Villeta N, T and U sands, the Nancy-Burdine-Maxine Block provides a core operating hub for the identified multi-horizon exploration drilling plans on adjoining Gran Tierra lands over the next 3 years.

Gran Tierra operated the Santana Block through July 2015 when the contract expired, so we know these assets well. The important fluid processing, and transportation infrastructure where we ship, under tariff, Costayaco, Moqueta and Guayuyaco production, will be the core transportation system as we explore and expand throughout the Putumayo. We will be able to scale the system as required, and maintain the efficient cost structure and appropriate investment timing being the operator of the network. As with the Nancy-Burdine-Maxine Block, the Miraflor, Mary, Linda and Toroyaco fields in the Santana Block provide upside with EOR investment, and multi-horizon exploration potential."

To view Diagram 1 - Land and Infrastructure Map - Putumayo Basin, please visit:

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