Gran Tierra Energy increases 2011 capital program to develop recently acquired assets in South America. The company intends to spend approximately $55 million on the newly acquired assets with approximately $25 million in Colombia, $14 million in Peru and $16 million in Argentina.
Gran Tierra acquired Petrolifera Petroleum in a $195 million deal in January 2011, bringing together a pair of Canadian-based companies exploring for oil in South America.
Including the Petrolifera assets, Gran Tierra sees average production of between 17,500 and 19,000 barrels of oil equivalent per day, net after royalty. In late December, the company had forecast production of 16,000 to 18,000 boepd net after royalty. The company, which has assets in Colombia, Argentina and Peru, raised its capital expenditure for the year by about 19% to $355 million.
In Colombia, Gran Tierra Energy intends to delineate a potential gas production platform in the Lower Magdalena basin, prepare for 2012 exploration drilling in Peru, and reverse production declines in Argentina where both oil and gas prices have consistently been rising.
Gran Tierra Energy plans to spend approximately $14 million on drilling in Colombia, including one exploration well and one delineation well with the intention of evaluating a potential gas production platform in the Lower Magdalena Basin.
In 2011, Gran Tierra Energy intends to spend approximately $13 million in preparation for drilling in early 2012.
Capital spending in Argentina will initially focus on reversing production declines on properties in the Neuquen Basin. Gran Tierra Energy plans to spend $14 million on drilling and completions in Argentina.