Colombian

[Tackler]

Gran Tierra Energy Announces Farmout of Acreage in Colombia

2007-08-01 05:55 MT - News Release

Initiates Planning for 2008 Exploration Drilling Program

CALGARY, CANADA, August 1 /CNW/ - Gran Tierra Energy Inc. (OTC Bulletin Board: GTRE), a company focused on oil exploration and production in South America, today announced that it has farmed out 50% of its 80% interest in the Azar Block in the Putumayo Basin of Colombia. Gran Tierra Energy will retain a 40% interest in the Azar Block and will retain Operatorship. Under the terms of the farmout, Gran Tierra Energy's share of costs for its retained 40% interest in work commitments in the first three exploration phases will be carried by the new partner. The farmout arrangement creates for Gran Tierra Energy a more attractive capital risk/reward profile for this prospective asset, and positions the company for additional drilling in 2008 with an experienced partner to complement emerging development plans related to two recent oil discoveries in Colombia.

The Azar Block covers 51,639 acres (209 square kilometers). It is located immediately east of Gran Tierra Energy's current operations and production in the Santana and Guayuyaco Blocks and is located approximately 20 kilometers east of the recent Juanambu-1 and Costayaco-1 oil discoveries operated by Gran Tierra Energy that tested flow rates up to 5,906 barrels of oil per day and 778 barrels of oil per day respectively. The Azar Block is located approximately 60 kilometers east of the two new technical evaluation areas that were recently awarded 100% to Gran Tierra Energy by the Agencia Nacional de Hidrocarburos (ANH) and announced on July 23, 2007.

Work commitments in the Azar Block consist of six consecutive phases. The first phase requires the acquisition of new seismic data, which will be acquired in 2007. The second phase requires a workover of an existing exploration well, Palmera-1, which encountered oil shows during drilling and in which oil pay was interpreted from logs after drilling. The well was never tested as it was not deemed commercial at the time it was drilled in 1996. The third phase requires the drilling of a new exploration well. The subsequent three phases each contain one exploration well commitment per phase. The Azar block is subject to the new and fiscally attractive ANH royalty/tax contract which includes no additional state participation.

Dana Coffield, President and CEO stated "The assignment of interests and Operatorship of this block to Gran Tierra Energy in early 2007, and subsequent award of the two recently announced technical evaluation contracts, continues to advance our strategy of actively acquiring under-developed assets to replenish and maintain a substantial inventory of drilling prospects as our existing inventory of prospects is drilled. With our new partner, we are now advancing the execution of our work commitments in the Azar Block and will add an exploration well to our 2008 drilling program, which will include exploration drilling in addition to the development drilling program associated with our recent oil discoveries in Colombia."