Gran Tierra Energy Inc. Reaches New Milestones in the Middle Magdalena Valley Basin

CALGARY, ALBERTA–(Marketwired – Nov. 28, 2017) – Gran Tierra Energy Inc. (“Gran Tierra” or the “Company”) (NYSE American:GTE)(NYSE MKT:GTE)(TSX:GTE), a company focused on oil and gas exploration and production in Colombia, has reached new milestones in the Middle Magdalena Valley Basin (“MMV”) during November 2017. In August 2016, Gran Tierra expanded into the MMV through the acquisition of PetroLatina Energy Limited. After little more than a year, the MMV assets, and in particular the Acordionero field, have become a significant part of the Company’s portfolio and growth. All dollar amounts are in United States (“U.S.“) dollars and all production volumes are on a working interest before royalties (“WI“) basis.

Highlights

• Record Production

• Since acquiring the Acordionero field in the MMV in August 2016, Gran Tierra has increased its production by 225% to a record high average rate of 15,358 barrels of oil per day (“bopd”) (average from November 15 to 27, 2017)

• Free Cash Flow

• From the acquisition date of August 23, 2016, until September 30, 2017, the MMV assets have generated 6 million in oil and natural gas sales and million of operating netback¹, while the Company made capital investments of million; these assets have generated free cash flow during today’s low oil price environment

• Drilling Efficiency

• Cumulative average 46% drilling cost savings and 35% faster drilling times since acquisition in August 2016

• Diversification

• The MMV assets now account for approximately 46% of Gran Tierra’s total production

• Reservoir Quality

• Since the acquisition, Gran Tierra has drilled, completed and brought on production 10 Acordionero oil wells which have demonstrated better than expected reservoir quality and thickness, higher than expected initial oil rates per well and increasing oil quality higher in the reservoir structure

• Enhanced Oil Recovery (“EOR”)

• Gran Tierra’s plans for early optimization and EOR are underway with source injection water identified, pilot water injection wells drilled and tested and the waterflood pilot has commenced

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented, “We are very proud of what our technical and operational teams have planned and executed in just over a year with the Acordionero field, which is exceeding our original expectations in terms of production and growth, as well as profitability. Since acquiring Acordionero in August 2016, we have executed a drilling program that has more than tripled the field’s oil production and commenced the waterflood pilot for reservoir management of both the Lisama A and C Sand reservoirs. More importantly, the reservoir quality, continuity of the sands, oil quality and productivity per well have exceeded our expectations. In particular, the AC-13 well in the northern part of the field and AC-17 drilled in the southern part of the field have exceeded expectations with respect to reservoir quality, sand thickness and higher than forecasted API oil gravity. We believe the higher API, lower oil viscosity and better reservoir continuity may significantly increase the opportunity for a successful waterflood and higher ultimate recovery factors. We believe Acordionero’s oil production can continue to grow through 2018 as we execute our planned development drilling campaign and waterflood implementation.

With the ongoing ramp up of Acordionero, the Company’s total production has steadily increased during fourth quarter 2017. Gran Tierra’s total Colombia only production has reached a current record high of 35,084 barrels of oil equivalent per day (“BOEPD“), which is growth of 23% from first quarter 2017 and an increase of 55% from second quarter 2015, when our current senior management team started at the Company. Gran Tierra’s Colombia-focused and self-funded exploration and development program has been executed consistently and delivered profitable production growth throughout 2017.”

Acordionero Field Development (Gran Tierra 100% WI and Operator)

After acquiring the MMV assets in August 2016, Gran Tierra spud its first Acordionero development well as operator in October 2016 and has since drilled, completed and brought on production 10 oil wells, two water injection wells and one water source well. The AC-14i water injection well and the AC-18 and AC-16 development oil wells have been brought on stream during fourth quarter 2017. The AC-21 development oil well was spud in November 2017 and is expected to be on stream in early December 2017. Following AC-21, drilling is planned to commence from the new AC-6 pad by the end of December 2017. Gran Tierra expects to drill three development oil wells and one injector from the AC-6 pad through the course of first quarter 2018.

The table below summarizes the productivity and API oil gravity for the Acordionero development oil wells which Gran Tierra has drilled, completed and brought on production since acquiring the field:

Well		IP30 (bopd)1		Start Date		Producing Zone		API°
AC-5		1,253		Nov.11, 2016		Lisama A		13.3
AC-7		512		Dec.20, 2016		Lisama A		14.4
AC-9		1,051		Apr.01, 2017		Lisama C		25.8
AC-10		1,499		May.07, 2017		Lisama A+C		15.2
AC-11		1,303		Jun.03, 2017		Lisama A+C		16.4
AC-13		1,139		Jul.20, 2017		Lisama A		16.4
AC-15		1,010		Sep.16, 2017		Lisama A+C		15.3
AC-17		1,315		Sep.21, 2017		Lisama A		17.7
AC-18		1,5372		Nov.01, 2017		Lisama A+C		17.2
AC-16		1,1613		Nov.15, 2017		Lisama C		23.7
1 IP30 represents initial production averaged over first 30 days of production
2 AC-18’s production averaged over first 23 days of production
3 AC-16’s production averaged over first 9 days of production

The Mochuelo-1ST well was spud in third quarter 2017, targeting potential oil in the Lisama D Sand and source water from the Lisama A and C Sands for use in the Acordionero waterflood. Based on production tests, Gran Tierra expects that more than 10,000 barrels of water per day can be produced from the Lisama A and C in Mochuelo-1ST, which is now being used to provide injection water for the waterflood pilot at Acordionero. Based on this well’s successful oil production test of the Lisama D Sand, Gran Tierra plans to spud a follow-up development well, Mochuelo-2, in early second quarter 2018.

AC-14i injection tests were successfully conducted in November 2017 in the Lisama A and C Sands. The AC-8i water injection well is planned to be stimulated in December 2017 to improve Lisama C Sand injectivity. Lisama A Sand injectivity was previously established in AC-8i.

Based on the Company’s preliminary plans for Acordionero during 2018, Gran Tierra expects to drill another 12 development oil wells and four water injection wells.

During 2017 year to date, Gran Tierra has achieved the following milestones at Acordionero:

1. Water Injection for EOR
   1. Mochuelo water source well drilled (sidetrack from a suspended exploration well drilled by the previous operator) and brought online
   2. Acordionero waterflood pilot received regulatory approval, and pilot injection facility brought online
   3. Successful Lisama A and C water injection tests at AC-8i and AC-14i
2. Processing and Export Facilities Expansions
   1. Electrostatic heater treater installed and started up to increase water handling capacity in preparation for full-scale waterflooding during 2018
   2. Truck loading station capacity was expanded to 18,000 bopd, with plans underway to increase the capacity to 21,000 bopd by the end of 2017
3. New Oil Reservoirs Tested
   1. Lisama D Sand oil production tests from AC-8i and AC-9 wells
   2. Lisama D Sand oil production test from Mochuelo-1ST well
4. Drilling Efficiency – cumulative average 46% drilling cost savings and 35% faster drilling times since acquisition in August 2016

MMV Exploration and Appraisal

Elsewhere in the MMV, Gran Tierra spud the Ayombero exploration well on November 13, 2017, which is targeting the La Luna conventional fractured carbonate oil play. This well is being drilled within the Chuira exploitation area. Gran Tierra produces from the La Luna at the Chuira field. Testing this play is designed to help Gran Tierra understand the potential of the La Luna.

Gran Tierra also plans to drill the Totumillo exploration well within the Acordionero exploitation area, which is designed to target Lisama Sand reservoirs similar to Acordionero’s, in a separate structural accumulation. The civil works have commenced and the lease site is expected to be available to receive the drilling rig once Gran Tierra finishes drilling the Ayombero well. The expected spud date for Totumillo is during January 2018.

The Ayombero and Totumillo exploration wells may demonstrate additional diversified potential within the original acquisition of the MMV assets.

¹ Operating netback is a non-GAAP measure and does not have a standardized meaning under generally accepted accounting principles in the United States of America (“GAAP”). Refer to “Non-GAAP Measures” in this press release for a description of this non-GAAP measure and a reconciliation to the most directly comparable measure (oil and natural gas sales) calculated and presented in accordance with GAAP.

About Gran Tierra Energy Inc.

Gran Tierra Energy Inc. together with its subsidiaries is an independent international energy company focused on oil and natural gas exploration and production in Colombia. The Company also has business activities in Peru, which are expected to be sold pursuant to an agreement dated November 9, 2017, subject to certain conditions, including a successful financing by the purchaser. The Company is focused on its existing portfolio of assets in Colombia and will pursue new growth opportunities throughout Colombia, leveraging our financial strength. The Company’s common shares trade on the NYSE American and the Toronto Stock Exchange under the ticker symbol GTE. Additional information concerning Gran Tierra is available at www.grantierra.com. Information on the Company’s website does not constitute a part of this press release. Investor inquiries may be directed to info@grantierra.com or (403) 265-3221.

Gran Tierra’s Securities and Exchange Commission (“SEC“) filings are available on a website maintained by the SEC at http://www.sec.gov and on SEDAR at http://www.sedar.com.

Forward Looking Statements and Legal Advisories:

This press release contains opinions, forecasts, projections, guidance, plans and other statements about future events or results that constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and financial outlook and forward looking information within the meaning of applicable Canadian securities laws (collectively, “forward-looking statements“). Such forward-looking statements include, but are not limited to, the Company’s future operations including planned operations, the exploration and development of the Company’s blocks, areas and fields, the Company’s expectations regarding certain plays, the Company’s business model and the Company’s plans, including completion and testing plans, objectives, expectations, evaluations and intentions regarding production, exploration and exploration upside and development, the Company’s projected and forecasted growth and results, and the expected timing of certain projects.

The forward-looking statements contained in this press release reflect several material factors and expectations and assumptions of Gran Tierra including, without limitation, that Gran Tierra will continue to conduct its operations in a manner consistent with its current expectations, the accuracy of testing and production results and seismic data, pricing and cost estimates (including with respect to commodity pricing and exchange rates), rig availability, the effects of drilling down-dip, the effects of waterflood and multi-stage fracture stimulation operations, the extent and effect of delivery disruptions, and the general continuance of current or, where applicable, assumed operational, regulatory and industry conditions including in areas of potential expansion, and the ability of Gran Tierra to access capital and other resources and to execute its current business and operational plans in the manner currently planned. Gran Tierra believes the material factors, expectations and assumptions reflected in the forward-looking statements are reasonable at this time but no assurance can be given that these factors, expectations and assumptions will prove to be correct.

Among the important factors that could cause actual results to differ materially from those indicated by the forward-looking statements in this press release are: Gran Tierra’s operations are located in South America, and unexpected problems can arise due to guerrilla activity; technical difficulties and operational difficulties may arise which impact the production, transport or sale of the Company’s products, including instability of electricity supply at our production facilities; geographic, political and weather conditions can impact the production, transport or sale of the Company’s products; the risk that current global economic and credit conditions may impact oil prices and oil consumption more than Gran Tierra currently predicts; the ability of Gran Tierra to execute its business plan and its drilling and development plan; the risk that unexpected delays and difficulties in developing currently owned properties may occur; the timely receipt of regulatory or other required approvals for the Company’s operating activities; the failure of exploratory drilling to result in commercial wells; unexpected delays due to the limited availability of drilling equipment and personnel; the risk that oil prices could remain weak or further decline, or global economic and credit market conditions may impact oil prices and oil consumption more than Gran Tierra currently predicts, which could cause Gran Tierra to further modify its strategy and capital spending program; and the risk factors detailed from time to time in Gran Tierra’s periodic reports filed with the SEC, including, without limitation, under the caption “Risk Factors” in Gran Tierra’s Annual Report on Form 10-K for the year ended December 31, 2016 filed March 1, 2017 and its subsequent filings with the SEC. These filings are available on the Web site maintained by the SEC at http://www.sec.gov and on SEDAR at http://www.sedar.com. Although the current guidance, capital spending program and long term strategy of Gran Tierra is based upon the current expectations of the management of Gran Tierra, should any one of a number of issues arise, Gran Tierra may find it necessary to alter its business strategy and/or capital spending program and there can be no assurance as at the date of this press release as to how those funds may be reallocated or strategy changed and how that would impact Gran Tierra’s results of operations and financing position.

All forward-looking statements are made as of the date of this press release and the fact that this press release remains available does not constitute a representation by Gran Tierra that Gran Tierra believes these forward-looking statements continue to be true as of any subsequent date. Actual results may vary materially from the expected results expressed in forward-looking statements. Gran Tierra disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities laws. Gran Tierra’s forward-looking statements are expressly qualified in their entirety by this cautionary statement.

This release shall not constitute an offer to sell, or a solicitation of an offer to buy, any securities of the Company.

Oil and Gas Disclaimer:

Barrels of oil equivalent (“BOE“) have been converted on the basis of 6 thousand cubic feet (“Mcf“) of natural gas to 1 barrel. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, given that the value ratio based on the current price of oil as compared with natural gas is significantly different from the energy equivalent of six to one, utilizing a BOE conversion ratio of 6 Mcf: 1 barrel would be misleading as an indication of value.

References to thickness of “oil pay” or of a formation where evidence of hydrocarbons has been encountered is not necessarily an indicator that hydrocarbons will be recoverable in commercial quantities or in any estimated volume. Well test results should be considered as preliminary and not necessarily indicative of long-term performance or of ultimate recovery. Well log interpretations indicating oil and gas accumulations are not necessarily indicative of future production or ultimate recovery. If it is indicated that a pressure transient analysis or well-test interpretation has not been carried out, any data disclosed in that respect should be considered preliminary until such analysis has been completed.

This press release contains certain oil and gas metrics, including operating netback, which does not have a standardized meaning or a standard method of calculation and therefore such measure may not be comparable to similar measures used by other companies. This metric has been included herein to provide readers with additional measures to evaluate the Company’s performance; however, such measure is not a reliable indicator of the future performance of the Company and future performance may not compare to the performance in previous periods.

Investors are urged to consider closely the disclosures and risk factors in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and in the other reports and filings with the SEC, available from the Company’s offices or website. These forms can also be obtained from the SEC via the internet at http://www.sec.gov.

Non-GAAP Measures:

Operating netback is a non-GAAP measure which does not have a standardized meaning prescribed under GAAP. Management views this supplemental measure as a performance measure. Investors are cautioned that this measure should not be construed as an alternative to net income or loss or other measures of financial performance as determined in accordance with GAAP. Our method of calculating this measure may differ from other companies and, accordingly, may not be comparable to similar measures used by other companies. Operating netback, as presented, is defined as oil and natural gas sales and operating and transportation expenses. Management believes that operating netback is a useful supplemental measure for management and investors to analyze financial performance and provides an indication of the results generated by our principal business activities prior to the consideration of other income and expenses. A reconciliation from oil and natural gas sales (GAAP) to operating netback is provided in the table below:

		Middle Magdalena Valley – acquisition date until September 30, 2017
(Thousands of U.S. Dollars)
Oil and natural gas sales		6,252
Operating expenses		(15,501)
Transportation expenses		(15,614)
	Operating netback	,137