Gran Tierra Energy Announces Strategic Partnership with Ecopetrol for Development in Colombia

Key Points of the Announcement

• Major Partnership: Gran Tierra Energy Inc. has signed a contract with Ecopetrol, Colombia’s national oil company, to jointly develop the Tisquirama block in the Middle Magdalena Valley Basin. This block contains the Tisquirama and San Roque fields, located adjacent to Gran Tierra’s largest producing field, Acordionero.
• Working Interest and Operatorship: Gran Tierra is expected to earn a 49% working interest in the Tisquirama block, subject to regulatory approval and satisfaction of certain conditions. The company will assume operatorship upon completion of the initial work program and Executive Committee approval.
• Production and Development Plans: The Tisquirama and San Roque fields averaged 2,500 barrels of oil equivalent per day (boepd) on a gross basis in 2025. The fields have significant original oil in place (OOIP) but have historically seen limited development and have a relatively low recovery factor.
• Investment Commitment: Gran Tierra has committed to a \$92.4 million carry capital program, of which approximately \$47.1 million is attributable to Gran Tierra, over 40 months. Phase 1 requires a minimum spend of \$15 million, with waterflood expansion as the initial focus.
• Potential Upside: Upon completion of Phase 1, Gran Tierra will receive 49% of both the existing base and incremental production. If the development plan is executed as anticipated, the block could achieve production levels in excess of 13,000 boepd (gross).
• Synergies and Technology: The proximity to Acordionero will allow Gran Tierra to leverage its waterflood expertise, integrate water management, and potentially implement gas-to-power solutions using natural gas from the fields to lower operating costs. The company also sees potential to use advanced horizontal and multi-lateral drilling techniques to enhance recovery rates.
• Exploration Potential: In addition to development, there are near-field exploration prospects in proven plays within the block, representing further upside.
• Long-Term Vision: The contract term extends until the economic limit of the fields, enabling long-term development and full realization of the block’s resource potential.

Details and Implications for Shareholders

• Price Sensitive Information:
  • The strategic partnership with Ecopetrol, Colombia’s largest oil company, is a significant milestone and may be price sensitive due to the potential for a substantial increase in production and reserves if the project is successful.
  • The initial capital commitment and the carried interest structure limit Gran Tierra’s upfront risk while providing exposure to a meaningful asset adjacent to their core operations.
  • The block’s proximity to Acordionero, where Gran Tierra has an established operational track record and infrastructure, is expected to create operational synergies, cost efficiencies, and potentially accelerate project development and cash flows.
  • The anticipated production ramp (potentially exceeding 13,000 boepd gross) is material compared to the current production base and could have a significant positive impact on Gran Tierra’s revenue, cash flow, and valuation.
• Regulatory and Execution Risk:
  • The transaction is subject to regulatory approvals, notably from the Colombian Superintendence of Industry and Commerce (SIC). The effective date and Gran Tierra’s operatorship depend on satisfying these conditions.
  • Delays or failure to secure approvals or execute the work program could affect the timing of production increases and associated cash flows.
• Development Strategy:
  • Gran Tierra will focus on waterflood expansion from its operated Acordionero field into the new fields, followed by wellbore optimization and infill drilling.
  • The company has identified over 60 unbooked drilling locations across the block, and future development could include advanced drilling techniques to optimize reservoir contact and capital efficiency.
  • Drilling and development costs are expected to benefit from Gran Tierra’s experience, with recent wells in Acordionero drilled and completed for less than \$2 million each.
• ESG and Cost Focus:
  • By integrating water management and utilizing field gas for power generation, Gran Tierra aims to lower operating costs and reduce environmental impact, aligning with broader industry ESG trends.
• Exploration Upside:
  • In addition to the development of existing fields, near-field exploration prospects provide optionality for future growth.

Forward-Looking Statements and Risks

• This announcement contains numerous forward-looking statements regarding potential production growth, recovery factors, capital spending, regulatory approvals, and expected operational synergies. These projections are based on management’s current plans, assumptions, and information available as of the date of the announcement.
• Key risks include regulatory approval delays, operational challenges, commodity price volatility, geopolitical risk in Colombia and other jurisdictions, technical risks associated with waterflooding and new drilling techniques, and potential for exploration outcomes that do not meet expectations.
• Actual results may differ materially from projections due to these and other risk factors. Shareholders are advised to review the company’s filings with the SEC and relevant securities regulators for a full discussion of risks.

Contact Information

For further information, investors and media may contact:
Gary Guidry, Chief Executive Officer
Ryan Ellson, Executive Vice President & Chief Financial Officer
+1-403-265-3221
[email protected]

About Gran Tierra Energy Inc.

Gran Tierra Energy Inc. is an independent international energy company focused on oil and natural gas exploration and production in Canada, Colombia, Ecuador, and Azerbaijan. The company is listed on the NYSE American, Toronto Stock Exchange, and London Stock Exchange under the ticker GTE.

Disclaimer

This article contains forward-looking statements based on current expectations, estimates, and projections about future events. Actual results may differ materially due to various risks and uncertainties. This article is for informational purposes only and does not constitute investment advice. Investors should consult official filings and their own advisors before making investment decisions.

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