Gran Tierra Energy Announces Costayaco-6 Encounters Deeper Oil Column in Costayaco Field, Colombia

Gran Tierra Energy Announces Costayaco-6 Encounters Deeper Oil Column in Costayaco Field, Colombia

Gran Tierra Energy Inc., a company focused on oil exploration and production in South America, today announced that it had completed drilling Costayaco-6, a new well in the Costayaco Field in the Chaza Block, in the Putumayo Basin of southern Colombia, encountering oil deeper in the primary reservoir zone than previous wells in the field. Gran Tierra Energy has also completed drilling Zafiro-1, an exploratory well in the Guachiria Norte Block in the Llanos Basin of eastern Colombia. No hydrocarbons were encountered so the well has been plugged and abandoned.

Costayaco-6, Chaza Block, Putumayo Basin

Gran Tierra Energy completed drilling operations for Costayaco-6, the sixth well drilled in the Costayaco field, an oil field discovered in 2007. Gran Tierra Energy has a 100% working interest and is the operator of the Chaza Block and the Costayaco field.

Costayaco-6 was spud on October 5, 2008. It is a southwestern delineation well for the Costayaco field (approximately 6,923 feet to the southwest of Costayaco-5). Costayaco-6, a directional well, reached total measured depth, or MD, of 8,867 feet (8,571 feet true vertical depth, or TVD) on November 13, 2008. Costayaco-6 was subsequently cased and is currently waiting on completion and testing which is scheduled to begin in late December.

Although the Upper Villeta T reservoir came in 20 feet lower than the prognosis for Costayaco-6, well logs indicate the presence of hydrocarbons in the Upper Villeta T sand reservoir from -7,076 feet subsea to -7,119 feet subsea (TVD). The net pay for the Upper Villeta T sand reservoir is estimated at 22 feet (MD). The well log also shows the presence of hydrocarbon in the Lower Villeta T sand reservoir from -7,119 feet subsea to -7,126 feet subsea (TVD). The net pay for the Lower Villeta T sand reservoir is estimated at 3 feet (MD). The Caballos Formation is water bearing as expected.

Prior to drilling Costayaco-6, the oil water contact in the Villeta T sand was interpreted to be at approximately -7,090 feet subsea. Preliminary interpretation from well logs indicates that the oil water contact for the Upper Villeta T sand is at least 25 feet lower than the previous estimate. Successful testing of this deeper oil has the potential to further increase the reserves in the Costayaco field. Completion and testing of Costayaco-6 is planned before year-end 2008.

Costayaco-7 drilling will commence once the environmental permit is obtained and location construction is completed in December. Drilling is expected to take approximately one month. The main objective of Costayaco-7, in addition to providing new production capacity, is to convert probable and possible reserves in the northern area of the field into proven reserves. A continuous development drilling campaign is planned for 2009.

Production operations in the Costayaco and Juanambu oil fields remain suspended while the pipeline system downstream of Costayaco remains shut-in. Discussions amongst authorities continue, with resolution expected shortly. Production from other assets in the Putumayo Basin, the Llanos Basin and the lower Magdalena Basin continues unimpeded.

Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy, stated, “Gran Tierra Energy continues to have tremendous success delineating and developing the Costayaco field. Plans for the 2009 work program and budget are currently being finalized, with an expectation of another full year of development drilling in the field, complemented with an ongoing exploration drilling campaign through the year.”

Zafiro-1, Guachiria Norte Block, Llanos Basin

Zafiro-1 is an obligation well for the Guachiria Norte Block in the Llanos Basin. Gran Tierra Energy, through its wholly-owned subsidiary Solana Resources Limited, has a 100% working interest in the Guachiria Norte Block. Lewis Energy Colombia has a 30% beneficial interest in this block. Zafiro-1 was spud on November 6, 2008 and drilling operations were completed on November 22, 2008. Zafiro-1 reached a total depth of 8,640 feet. Insufficient reservoir quality sandstones were encountered in the C-3 interval. No sand was encountered in the C-5 interval. The C-7 interval is water bearing. Zafiro-1 was plugged and abandoned.

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