Gran Tierra's Grand Tour (into Ecuador)

Gran Tierra has won three blocks in Ecuador covering c.140,000 acres in the highly prospective Oriente-Putumayo Basin: Charapa, Chanangue and Iguana. The blocks are contiguous with Gran Tierra’s Putumayo position in Colombia and allows the company to extend its Colombian success on the trend across the border.

Gran Tierra will have 100% interest and operatorship on each block in exchange for a 14 well, four year work programme – management plans to commence the programme in 2020, to be fully funded from internal cash flow.  The contracts work on a sliding scale for contractor share of revenues, ranging from 87.5% at USD30/bbl to 40% at USD120/bbl.

The Charpara block sets Gran Tierra off to a good start with an existing field and historical production from the B-Limestone. As Gran Tierra matures its new acreage, there is scope to construct its own gathering infrastructure and use the export infrastructure in Ecuador. In due course, this could also be an export route for its Colombian production in the same way that Amerisur has built its own OBA pipeline from its Platanillo block to Ecuador (see Bienvenido Victor Hugo and Putumayo smart crude marketing).

The other side of the border into Ecuador has always been an exciting play. Whilst geologically the same trend, the Colombian side of the border has been underexplored due to historical above ground conflict and security issues. In contrast, Ecuador has been highly successful with many fields where nearly 6bnbbl of oil has already been produced.

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Amerisur putting plans in motion

Amerisur is a story of slow and steady wins the race. The company had targeted 10mbbl/d to be reached a few years ago - with current production only at c.7mbbl/d, this target has clearly fallen by the wayside. Amerisur has learnt, and is continuing to learn, that doing business in Colombia (and Ecuador) is not straightforward and getting necessary government approvals can take months and sometimes years rather than weeks - the OBA pipeline being a case in point. Layer on top of this the local community liaisons and security issues in the Putumayo Basin, one begins to understand the impediments to Amerisur's progress over the past years.

Nevertheless the Amerisur team has managed its portfolio and navigated the winding road of being a Colombian E&P carefully and is now one of a small handful of successful producers in the Putumayo Basin. As well as building up its asset base beyond what was effectively a single asset company in Platanillo, Amerisur has made good progress on the exploration and appraisal front which will set the company up for the longer term.

Amerisur is a company we continue to watch with interest and with enough patience, is a rare success story that will materialise over time.

Drilling Update

North Platanillo
At the start of 2017, Amerisur had success at Plat-22 encountering 43ft of U-sands and flowing at 800bbl/d, extending the Platanillo field north. This was followed by Plat-21 which derisked the extension further testing 430b/d.  Plat-25 came in below expectations, but was sidetracked to target better reservoir quality and additional pay thickness, and was brought on production at 180 bbl/d. In December, Plat 27 encountered net pay of 12ft in the U and 9ft in the T sands. This success could add up to 10mmbbl of reserves.

In 2018, drilling activity on Platanillo switches to the N sand stratigraphic play with the upcoming planned three-well programme targeting the 18.8mmbbl N Sand Anomaly (expected to start in Q1 2018).

Mariposa (CPO-5, Amerisur 30%, ONGC 70%)
Mariposa-1 was successfully drilled in May 2017 which flowed at 4.6mbbl/d 41API light oil. The well was drilled to a total depth of 11,556ft with an indicated 120ft net pay in the L3 Sands. The well is now producing around 3,200b/d (gross) on Long Term Test on a restricted choke.

Further drilling is planned on the block in 2018 (including Indico-1 and Sol) which could add material reserves to the portfolio.

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