Gran Tierra reports new oil discovery in Ecuador

Production testing of the well has begun and is producing 1,105 barrels of oil per day (bopd). Photo credit: Millenius/Shutterstock.

Canadian energy company Gran Tierra Energy has announced an oil discovery in Ecuador, the company’s seventh successful discovery in the Arawana/Zabaleta field area.

The Zabaleta-K1 well, the fourth exploration well in the Chanangue block, has reinforced the potential of the Arawana/Zabaleta field area.

Gary Guidry, President and CEO of Gran Tierra, said: “Gran Tierra is pleased to announce its seventh oil discovery in Ecuador from the Zabaletea-K1 well. This well was a critical exploration well that further fleshed out and defined the Arawana/Zabaleta field area.

“The Zabaleta-K1 was drilled and filled with oil over 4 km from the Arawana-J1 well drilled earlier this year, underscoring the magnitude of this discovery. The success of this well solidifies Gran Tierra’s understanding of the field area and will be an important pillar of development growth plans in South America in the coming years.”

After production casing was completed and the Basal Tena oil zone was perforated, the well has commenced production testing and has returned 1,105 barrels per day at low water content and favorable gas-to-oil ratios.

The last two discoveries were made earlier this year at the Charapa-B6 well in the Oriente Basin and the Charapa-B7 well in Ecuador.

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Additional successful exploration includes the Charapa-B5, Bocachico Norte-J1 and Arawana-J1 holes.

Concurrently, Gran Tierra has entered into a definitive agreement with Logan Energy to sell a 50% interest and operatorship of a portion of its Simonette Montney assets in Alberta, Canada, for C$52 million (US$37.2 million).

The strategic partnership with Logan Energy will advance the development of Gran Tierra’s Simonette assets.

The purchase price is subject to customary adjustments. The transaction is expected to close by the end of 2024, subject to customary closing conditions.

The transaction also includes Logan delivering to Gran Tierra the first development well in the Lower Montney region valued at $3 million net and providing priority access to its infrastructure.

Guidry explained: “This strategic partnership with a world-class operator that already has established infrastructure in the region will significantly accelerate development and generate cash flow in the short term.

“We intend to use a portion of the proceeds to create value for our shareholders through the development of other key assets in the portfolio and share repurchases, while strengthening our balance sheet by reducing net debt.”

Gran Tierra reports new oil discovery in Ecuador

ByAmelia Journalton

By Amelia Journalton

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