Gran Tierra Energy Reports Significant Oil Discovery in Ecuador

Gran Tierra Energy Inc. reported its seventh oil discovery in Ecuador, emphasizing the significant potential of the Arawana/Zabaleta field. The successful Zabaleta-K1 well confirms the validity of the Basal Tena geological model. Additionally, the company is divesting 50 percent of its Simonette Montney assets to Logan Energy Corp., aligning with its long-term corporate strategy for growth and shareholder value.

Gran Tierra Energy Inc. has announced its seventh oil discovery in Ecuador, emphasizing the substantial potential within the Arawana/Zabaleta field area. The Zabaleta-K1 well represents the fourth exploratory well in the Chanangue Block. The successful testing of the Zabaleta well further affirms the reliability of the Basal Tena geological model, located four kilometers from the Arawana-J1 well, reinforcing the considerable prospects of the Arawana/Zabaleta productive trend.

Gran Tierra has commenced production testing after installing production casing, sealing, and perforating the Basal Tena oil zone. Following this development, the rig has moved to initiate drilling of the Zabaleta Oeste exploration well, which commenced on November 21. This drilling marks the conclusion of Gran Tierra’s exploration commitments within the Chanangue block. CEO Gary Guidry acknowledged, “The success of this well solidifies Gran Tierra’s understanding of the field area and will be a key pillar of development growth plans in South America for years to come.”

In addition to the Ecuadorian discovery, Gran Tierra is divesting 50 percent of its Simonette Montney assets to Logan Energy Corp. for approximately CAD 52 million in cash, retaining an equal working interest post-transaction. These assets encompass roughly 25 net sections and are associated with significant proved reserves. This strategic move aligns with Gran Tierra’s commitment to long-term value creation by enhancing its development focus in Montney.

The total transaction value also includes an estimated CAD 3 million in non-cash proceeds related to the development of the first Simonette well in the Lower Montney region. This divestment allows Gran Tierra to expedite the drilling of two additional wells into the fourth quarter of this year, significantly ahead of the original schedule. Guidry expressed enthusiasm regarding the strategic partnership with a major operator, asserting its potential to accelerate development and enhance cash flow. This initiative aims to utilize proceeds for shareholder value enhancement through asset development and share buybacks while simultaneously reducing net debt.

The recently concluded transaction underscores Gran Tierra’s commitment to maintaining significant interests in acquired assets while strategically diluting certain stakes to strengthen its growth capacity in the energy sector.

Gran Tierra Energy Inc., based in Calgary, Alberta, has been actively exploring and developing oil resources primarily in South America. The company has focused on several key areas, notably in Ecuador and the Montney region of Canada. Recent activities include multiple successful exploratory wells that confirm the viability and potential of the Arawana/Zabaleta field area. Gran Tierra is also pursuing strategic divestments to align its operations with broader corporate goals, including enhancing shareholder value and operational efficiency.

Gran Tierra Energy Inc. has made significant strides with its recent oil discovery in Ecuador, validating the substantial potential of the Arawana/Zabaleta area. The successful Zabaleta-K1 well underscores Gran Tierra’s commitment to growth in the region. Furthermore, the strategic divestment of its interests in the Simonette Montney assets not only positions the company for enhanced development and cash flow but also demonstrates its focus on long-term value creation for shareholders. Overall, these developments reflect Gran Tierra’s robust growth strategy in the competitive energy market.

Original Source: www.rigzone.com