2024 Year-to-Date Total Company Average Production1 of Approximately 33,100 BOPD, 6% Percent Increase from Fourth Quarter 2023
Total Current2 Company Average Production of Approximately of 35,200 BOPD
Gran Tierra Energy Inc. (“Gran Tierra” or the “Company”) announced an operational update. All dollar amounts are in United States dollars, and production amounts are on an average working interest before royalties (“WI”) basis unless otherwise indicated. Per barrel (“bbl”) and bbl of oil per day (“BOPD”) amounts are based on WI sales before royalties.
Message to Shareholders
Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: “We are thrilled by the outcome to the start of our development drilling program so far in 2024. In particular, the performance of the Costayaco development wells serve as clear evidence of the field’s ongoing development potential, and confirming our geologic and reservoir modeling continues to be a predictive tool identifying development drilling opportunities that enhances oil recovery in a high-quality mature oil field. The current production in the Costayaco field is the highest achieved since May 2019. This positions the Company favorably as we enter 2024, as we eagerly initiate our near-field, high-impact exploration program in Ecuador, scheduled to commence in April.”
Operations Update:
Production:
Gran Tierra’s average production year to date is approximately 33,100 BOPD as a result of successful drilling campaigns in both Acordionero and Costayaco, representing a 6% percent increase from Q4.
Total company average production of approximately:
January 2024: 31,300 BOPD
February 2024: 34,200 BOPD
March2 2024: 35,200 BOPD
Based on the 2024 budget, previously released on January 23, 2024, and these encouraging results, Gran Tierra is well positioned to achieve its 2024 production guidance of 32,000 to 35,000 BOPD.
Colombia Development:
Costayaco Development Campaign (Putumayo Basin):
Since December 2023, Gran Tierra has drilled 5 wells of which 4 are oil producers and 1 is a water injector:
The first well, CYC-56, has been on production with jet pump since early January 2024. During the period of January 6 to March 6, 2024, CYC-56 produced on jet pump at a stable average rate of 1,821 BOPD (30-degree API gravity) with a water-cut of 1% and a gas-oil ratio of 151 standard cubic feet (“scf”) per stock tank barrel.
The second well, CYC-57, was spud on January 6, 2024, and reached final total depth on January 13, 2024. It was completed in the Villeta and Caballos formations and started production testing on January 22, 2024. During the period of January 22 – March 6, 2024, CYC-57 produced on jet pump at a stable average rate of 1,086 BOPD (29-degree API gravity) with a water-cut of 7% and a gas-oil ratio of 119 scf per bbl (“scf/bbl”).
The third well, CYC-58, was spud on January 23, 2024, and reached final total depth on January 29, 2024. It was completed in the Villeta and Caballos formations and started production testing on February 8, 2024. During the period of February 8 – March 6, 2024, CYC-58 produced on jet pump at a stable average rate of 1,892 BOPD (29-degree API gravity) with a water-cut of 6% and a gas-oil ratio of 188 scf/bbl.
The fourth well, CYC-59 was spud on February 8, 2024, and reached final total depth on February 19, 2024. It was completed in the Villeta and Caballos formations and started production testing on February 25, 2024. During the period of February 25 - March 6, 2024, CYC-59 produced on jet pump at a stable average rate of 694 BOPD (29-degree API gravity) with a water-cut of 42% and a gas-oil ratio of 289 scf/bbl.
The fifth well, CYC-60, an injector, was spud on February 26, 2024, and reached final total depth on March 3, 2024. It will be completed in the Villeta and Caballos formations in Q2-2024 as a water injector.
All 5 wells were drilled 13% below budget, on average for approximately $2.3 million, in approximately 11.5 days from spudding the well to final rig release. Notably, CYC-58 set a new field record for cost and time of approximately $1.9 million and in 8.7 days respectively.
All wells are currently produced on a jet pump and in the third quarter the Company plans on replacing the jet pumps with electronic submersible pumps to increase drawn down and production.
As a follow-up to the successful development program in the north of Costayaco, Gran Tierra will drill two additional development wells in the southern region based on the same concepts applied in the north which targeted un-swept/unrecovered oil. Drilling is expected to commence the second quarter of 2024.
Acordionero Development Campaign (Middle Magdalena Valley Basin):
An 11-well development drilling program was started in December 2023. All 11 wells have been drilled to date including 9 producers and 2 water injection wells. All wells are on production and the final injection well completion is underway.
All 11 wells were drilled 17% below budget, on average for approximately $1.3 million, in approximately 6.1 days on average from spudding the well to final rig release. Notably, AC-122 was pacesetter and drilled for $1 million and in 4.2 days. The drill costs have decreased by approximately 51 percent since 2016.
Production results were as expected and in line with our 2024 budget.
With the successful implementation of the waterflood and encouraging results from the polymer project, Acordionero is expected to generate material free cash flow for years to come and will fund high growth assets such as Suroriente and the high impact, near field exploration program.
Exploration Update:
Following the completion of the Acordionero drilling program, Gran Tierra is now in the process of moving the drilling rig to Ecuador to commence its 2024 near-field high impact exploration program. Drilling is expected to commence in April in the Chanangue Block.
The acquisition of a 238 square kilometers 3D seismic program on the Charapa block began in January. To date, working with communities, GTE’s third-party contractor continues to progress land permitting and surveying. The program is planned to be finished in late Q2 to early in Q3. The 3D seismic will assist in the full field development of Charapa and in identifying additional prospects on the block.
Operational Safety:
Gran Tierra continues to be the top performer in both lost time incident frequency3 (0.00) and total recordable incident frequency4 (0.04) safety metrics as per an internal study conducted by the Colombian Health, Safety and Environmental National Committee for 2023 on Colombian producers.
During 2023 Gran Tierra received an “A” rating from MSCI5 as a result of its Beyond Compliance philosophy and ESG performance.