Gran Tierra Energy has reported its seventh oil discovery in Ecuador, confirming the potential of the Arawana/Zabaleta area. The Zabaleta-K1 well further validates the geological model and commences production testing. The company is also divesting a portion of its Simonette Montney assets to support growth initiatives. CEO Gary Guidry affirmed that this moves align with Gran Tierra’s strategic focus on development in South America and shareholder value.
Gran Tierra Energy Inc. has announced its seventh oil discovery in Ecuador, signifying the substantial potential of the Arawana/Zabaleta field area. The Canadian corporation revealed that the Zabaleta-K1 well represents the fourth exploration well within the Chanangue Block. This successful drilling reaffirms the Basal Tena geological model’s validity, located four kilometers from the Arawana-J1 well, showcasing the Arawana/Zabaleta productive trend’s significant promise.
The company has initiated production testing after installing production casing and cementing the Basal Tena oil zone. Following this, the rig was relocated to begin drilling the Zabaleta Oeste exploration well, which commenced on November 21, thereby fulfilling Gran Tierra’s final exploration commitment in the Chanangue Block. Gran Tierra’s President and CEO, Gary Guidry, emphasized that this success enhances the company’s understanding of the field area and will be instrumental for future development initiatives in South America.
Moreover, Gran Tierra is selling a 50 percent stake and operatorship in part of its Simonette Montney assets for approximately CAD 52 million to Logan Energy Corp. After this transaction closes, Gran Tierra will retain a 50 percent working interest in the assets, which encapsulate around 25 net sections in the Simonette Montney region. As of July 31, 2024, these assets possess 0.8 million barrels of oil equivalent of Proved Developed Producing reserves, complemented by further Proved and Proved plus Probable reserves estimates.
This move aligns with Gran Tierra’s strategic focus on growth and long-term value creation. The initial closing is anticipated by the end of 2024, dependent upon the satisfaction of customary closing conditions. Additionally, the total consideration from Logan includes non-cash proceeds from developments in the Lower Montney, facilitating an acceleration of planned drilling operations.
Guidry expressed excitement regarding this partnership, which he believes will enhance development speed, yield near-term cash flow, and provide further opportunities for shareholder value creation. This strategic transaction also facilitates the continuation of the company’s capital management initiatives, including share buybacks and debt reduction, asserting Gran Tierra’s position as a commendable growth-focused mid-cap exploration and production enterprise.
Gran Tierra Energy Inc., headquartered in Calgary, Alberta, is a prominent oil and gas exploration and production company. The announcement of its seventh oil discovery in Ecuador highlights the firm’s ongoing efforts in expanding into new territories and optimizing its resource potential. The Chanangue Block, where the recent drilling took place, serves as a focal point for Gran Tierra’s strategic initiatives aimed at harnessing the region’s geological prospects. The company’s sale of a stake in Simonette Montney signifies its commitment to managing assets while aiming for sustained growth and returning value to stakeholders.
In conclusion, Gran Tierra Energy Inc. has achieved significant milestones with its latest oil discovery in Ecuador, enhancing its position within the Arawana/Zabaleta field area. The ongoing exploration and production initiatives underscore the company’s strategic focus on growth, alongside a critical divestment aimed at optimizing its asset management and capital allocation. This dual approach serves to strengthen Gran Tierra’s foothold in the South American market and reinforces its commitment to generating shareholder value over the long term.
Original Source: www.rigzone.com
