Gran Tierra Energy (GTE) Trims FY15 Capital Spending Plan

Gran Tierra Energy (NYSE: GTE) announced a revised preliminary 2015 capital program. This revised program is designed to retain balance sheet strength by minimizing or eliminating expenditures that have no immediate value at current oil prices. The intent is to re-align the company's capital expenditure with a view to maximizing shareholder value. In addition to the capital spending reductions, Gran Tierra is actively pursuing significant operating and general and administrative cost reductions and eliminations through resource re-allocation initiatives and working with contractors and suppliers. The capital program will be reviewed continually for additional future reductions. In addition to this, Gran Tierra's entire exploration portfolio is being reviewed and its prospect generation, evaluation and drilling decisions will be re-evaluated with an emphasis on reducing both its risk profile and capital exposure.

Gran Tierra has reduced its capital budget for 2015 to $140 million. This is a reduction of $170 million from the previously announced budget of $310 million. The revised budget for operations in Colombia, Peru and Brazil allocates $50 million to drilling, $40 million to facilities, equipment and pipelines, $49 million for geological and geophysical activities and $1 million associated with corporate activities. Of the $140 million approximately $43 million had already been spent or committed. Approximately $37 million of the capital program is dedicated to the maintenance of existing production while approximately $18 million is dedicated to drilling in Colombia.

Gran Tierra is utilizing an average Brent oil price of $50 per barrel for budgeting purposes.

"The capital spending deferrals we are announcing form part of the refocusing effort by the Company to enhance delivery of value to shareholders. Gran Tierra will target increased capital spending efficiency to extract maximum value from the Company's portfolio. A key driver of the reduced capital spend is to preserve a strong balance sheet and maximize the Company's potential for growth from both our existing portfolio as well as through the opportunistic capture of external value enhancing opportunities," said Duncan Nightingale, Interim President and Chief Executive Officer. "Additionally, Gran Tierra will continue to work diligently to mature leads and prospects to a drill ready status in preparation for an improved commodity price environment" concluded Nightingale.

Capital Spending

The revised 2015 capital program focuses on projects with immediate value adds. In Colombia such projects include using natural gas produced from the Moqueta field to fuel electricity generation and thereby provide cost savings over the life of the field. A development well will be drilled in the Moqueta field which is required for pressure support. At Costayaco, work continues to increase water injection capacity to actively manage the production profile. In addition to facilities work at Costayaco and Moqueta, the Company plans to perform several workovers and well services. Also, a commitment exploration well may be drilled for which Gran Tierra is being carried for net US$5.5 million.

In Peru, the Company plans to defer both further development drilling at the Bretaña field and all significant exploration activities in other blocks. The reduced Brazil capital spending program will focus on facilities work at the Tiê field.

Gran Tierra is currently evaluating optimized and less capital intensive development concepts for the Bretaña field and the longer term use of the long term test ("LTT") facilities and existing wellbores. The Company is also concurrently re-evaluating development options for the Bretaña field. In this regard the current front-end, engineering and design study for the Bretaña field will be revised and simplified. LTT production from the Bretaña-1ST well is anticipated to start mid-2015. The goal of the LTT is to commission and test the facilities prior to final acceptance, provide additional reservoir performance information and test crude oil transportation routes and sales.

A new reserve report for the Bretaña field incorporating the recent Bretana Sur L4 well results is expected to be released before the end of February.

Production Projections

With the revised capital spending program, Gran Tierra is expecting 2015 production to average between 21,500 and 22,500 barrels of oil equivalent per day ("BOEPD") gross working interest ("WI") or between 18,200 and 19,200 BOEPD net after royalty ("NAR"). Production from Colombia is expected to be approximately 17,750 BOEPD NAR, with Costayaco contributing approximately 10,140 BOEPD NAR and Moqueta contributing approximately 5,540 BOEPD NAR assuming a 2% contingency for potential delivery disruptions. The revised preliminary 2015 capital program is also expected to result in production of 958 BOEPD NAR from Brazil. Gran Tierra's 2015 production forecast does not include any production from Peru. Approximately 99% of expected production is oil, with the balance natural gas.

Financial Position

Gran Tierra had approximately $332 million in cash and cash equivalents and no debt at the end of 2014. In addition, the Company has an undrawn credit facility with a current borrowing base of $150 million. Based on current oil prices, Gran Tierra expects the revised 2015 program to be funded from funds flow from operations and cash on hand.

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