Field Development | Hedging | Production Restart | Capital Markets | Drilling Activity | Curtailment/Shut-In

Gran Tierra Resumes Production, Operations as Oil Price Improves

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   |    Thursday,September 24,2020

Gran Tierra Energy Inc. has resumed production after its curtailments earlier this year. The company also updated its recent operations.

Production Restart

During September 1-21, 2020, production has increased to an approximate average of 21,250 BOEPD (second quarter 2020 averaged 20,165 BOEPD).

Gran Tierra's oil production volumes have been boosted by the resumption of production at the Suroriente and PUT-7 Blocks in the southern Putumayo region, as well as at several minor fields, and by the recommencement of workover activities at the Acordionero oil field

Resuming Operations as Prices Improve

With the recent partial recovery in oil prices and tightening of differentials, Gran Tierra's operations team has seamlessly restarted several field activities throughout the Company's Colombian portfolio.

Resumption of Acordionero Workover and Development Activities (100% WI):

• Acordionero Workover Activity Underway: the first workover rig restarted operations on September 1, 2020 and is currently on its third workover, the AC-58 oil well; the AC-52 and AC-53 oil wells have already been returned to production on schedule and under budget; this first workover rig is forecast to continue operations in the field through the end of 2020 and into first quarter 2021; a second workover rig is expected to arrive at Acordionero in October 2020 to accelerate well workover activity; a total of 10 to 12 offline oil wells are expected to be worked over by 2020 year-end to restore production; the total combined productive capacity of the 10 highest priority wells for workover is estimated to be approximately 3,500 bbl of oil per day ("BOPD"), with weighted averages for water cut of 13%, gas-oil ratio of 639 standard cubic feet per bbl and API oil gravity of 17 degrees (based on 30-day averages prior to each well going offline earlier this year)

• Acordionero Development Drilling Expected To Commence Q4/2020: a drilling rig is expected to restart operations during fourth quarter 2020 to drill 1 to 2 new oil wells by 2020 year-end; these new wells are expected to begin production during first quarter 2021; the drilling rig is forecast to continue drilling new development oil wells at Acordionero throughout 2021; the next 10 planned wells (8 oil producers and 2 water injectors) are scheduled to be drilled from the new southwest pad currently under construction; each of these new wells is expected to have an initial oil production rate of approximately 550 BOPD (initial 30-day average rate), in line with the strong performance of wells drilled in the field over the last year

• Costayaco/Vonu Workovers Expected to Resume in October 2020 (100% WI): a workover rig is expected to start operations in October 2020 to workover 3 offline oil wells and recomplete 2 wells to add U Sand water injection; the total combined productive capacity of the offline oil wells is estimated to be approximately 1,000 BOPD with weighted averages for water cut of 44%, gas-oil ratio of 811 standard cubic feet per bbl and API oil gravity of 29 degrees (based on 30-day averages prior to each well going offline earlier this year)

• Suroriente Block (52% WI) Production Ramping Up: restart of the Cohembi field, previously shut-in due to local farmer blockades, commenced on August 28, 2020; Cohembi's average WI production (September 1-21, 2020) is approximately 2,160 BOPD; volumes are expected to continue to increase to the block’s estimated WI capacity of approximately 3,600 BOPD (based on the 30-day average prior to the block being shut-in earlier this year)

Oil Price Hedges

Gran Tierra has entered into a series of Brent oil price hedges; for second half 2020, these hedges effectively give the Company a Brent floor price of $35.68/bbl on 11,000 BOPD if Brent falls as low as $27.05/bbl, below which Gran Tierra would receive Brent plus $8.63/bbl; for first half 2021, the Company has an effective Brent floor price of $45.29/bbl on 7,000 BOPD if Brent falls as low as $35.00/bbl.

Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: "We are very pleased we have safely and diligently recommenced operations throughout our extensive Colombian portfolio. The safety of our staff, contractors and the local communities where we operate is paramount. Gran Tierra's proper management of COVID-19 safety protocols has led to an earlier restart of activities than originally forecast and we commend our teams in Colombia and Canada for all of their excellent work during the many challenges of 2020. We are also greatly appreciate the support the Colombian government continues to provide the local oil industry, as evidenced by the ongoing payments of VAT and income tax refunds. One of our key objectives is to finish 2020 strong to set up Gran Tierra for an exciting 2021. We believe we are well-positioned to withstand the current volatile environment with our low base decline, conventional oil asset base and the operational control for capital allocation and timing, while maintaining a low cost structure and the safety of our people."