Gran Tierra Energy, CEPSA expand JV

Gran Tierra Energy Inc. (Gran Tierra Energy), a company focused on oil exploration and production in South America, has entered into a farm-in agreement with CEPSA Colombia S.A., a wholly-owned subsidiary of Compania Espanola de Petroleos, S.A.U. (CEPSA). As per the agreement, Gran Tierra Energy will earn a 45% working interest (WI) in Concession Contract Llanos-22 (CEPSA will retain a 55% WI and Operatorship) and CEPSA will farm-in for a 30% WI on the Piedemonte Norte Block (Gran Tierra Energy will retain a 70% WI and Operatorship). The completion of the two transactions is subject to obtaining regulatory approval from Colombia’s Agencia Nacional de Hidrocarburos (ANH) as well as other customary conditions of closing. This strategic partnership with CEPSA builds upon Gran Tierra Energy’s existing relationship in the Garibay Block (GTE 50% WI, CEPSA 50% WI and Operator) in the Llanos Basin. As per the terms of the farm-in agreements, in addition to the swap of the 30% WI in Piedemonte Norte block, Gran Tierra Energy will pay USD 1.5 million towards historic costs and a partial carry on the current well being drilled. The Piedemonte Norte block, located in the Putumayo Basin, encompasses 319sq/km (78,742 acres) and also contains significant exploration upside. The effective increase in the Gran Tierra Energy 2011 budget will be approximately USD 20 million.

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