Gran Tierra Energy Inc., a company focused on oil exploration and production in South America, announced the results of a qualified independent reserve evaluation of the company's Peru reserves by GLJ Petroleum Consultants Ltd. ("GLJ") effective December 31, 2013.
"Gran Tierra Energy has successfully booked significant reserves at the Bretana field in Peru. On a proved plus probable ("2P") and proved plus probable plus possible ("3P") basis, the Bretana field reserves nearly double the total corporate 2P and 3P reserves booked at year-end 2012. We are currently planning on initiating long-term test production from this field beginning in September 2014, with an appraisal well planned to be drilled in the fourth quarter of this year in the southern portion of the Bretana field," said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy. "Furthermore, additional unbooked resource potential has been identified in an extension of the Bretana structure on recently acquired and interpreted 2D seismic. This discovery is a dramatic reserve addition for Gran Tierra Energy, building on our substantial historical success in Colombia, and is expected to provide significant growth for Gran Tierra Energy and assist Perupetro in achieving its objective to bring new oil to the market on behalf of the Government of Peru in the coming decade," concluded Coffield.
Gran Tierra Energy is scheduled to spud a water-injector well in the in the first quarter of 2014 and begin drilling the Bretana Sur appraisal well on the southern portion of the field in the fourth quarter, 2014. Long-term test ("LTT") production from the Bretana-1STwell is anticipated to start in September of 2014 at a rate of approximately 2,500 barrels of oil per day gross. The LTT will provide valuable information on the reservoir to optimize field development, in addition to providing early cash flow.
Gran Tierra Energy's 2014 capital spending program for the Bretana field is $107 million , consistent with the previously reported $148 million 2014 capital spending program for Peru , and includes LTT facilities, drilling a water disposal well, platform construction and drilling of an appraisal well, a Front End Engineering Design for field development, and additional related costs.
The preliminary Bretana full field development plan, based on an independent third party preliminary, front-end engineering and design study and internal estimates, contemplates $1.197 billion in future capital spending. This capital spending is associated with developing the 2P reserves over the next 11 years with peak annual capital spending of approximately $275 million expected to come in 2020. First LTT production is expected to start September of 2014 with the next production phase expected to begin in 2017 at approximately 6,000 barrels of oil per day gross. Plateau production is expected to be initiated in approximately 2021 and continue for approximately 2 to 4 years at between 20,000 to 40,000 barrels of oil per day gross depending on ultimate definition of recoverable reserves size and reservoir performance characteristics. The pre-tax NPV10 of the 2P reserves (Securities and Exchange Commission ("SEC") compliant) is approximately $624 million, while the pre-tax NPV10 of the 3P reserves (SEC compliant) is approximately $1.495 billion. The pre-tax NPV10 of the 2P reserves (NI51-101 compliant) is approximately $376 million, while the pre-tax NPV10 of the 3P reserves (NI51-101 compliant) is approximately $1.130 billion. Development optimization opportunities with the potential to increase value will continually be evaluated.
A new 2-D seismic program over the Bretana field was acquired in late 2013. This seismic program identified a structural extension of the Bretana field which has a previously drilled well, Envidia-1, located on its flank. The Envidia-1 well had oil shows above the oil-water contact of the Bretana field, but was not tested. The structural closure above the Bretana field oil-water contact in the south lobe containing the Envidia-1 well encompasses approximately 6,700 acres. The resource potential of this structural extension is not included in the Bretana field reserve assessment and offers additional upside potential for the Bretana field development in the future.