Reserve estimates from the company, analyst, or investors are "uncertified" and as such are not clear to me on the ratio of 1P, 2P or 3P. Are you familiar with the Orito oil field, approximately 35 kilometers to the south of Costayaco? The Orito oil field has produced more than 250mmbo over the past 30 years from the same reserviors - Caballos and Villeta. Ortio produced, at it's peak 85,000bopd. There are only 120 oil fields in the world that produce more than 100,000 bopd, so Orito is significant, both from the daily flow rates and the amount of total oil produced. Orito drilled over 42 wells which averaged 2000 bopd. Costayaco wells are producing 2000 - 3500 bopd, and we'll know more from about their potential after the results from the long term production tests from C-2 and C-3 and the C-4 core tests are known.
As far as my guess for a back of the envelope valuation I use:
$18 / bbl for 3P and $30 / barrel for 2P reserves, I'll assume reserves at the conclusion of Costayaco 1-7.
100mmbo (gross) x $18/bbl (3P) / 134 million shares / 50% net = $6.80 / share my low side estimate
100mmbo (gross) x $30/bbl (2P) / 134 million shares / 50% net = $11.9 / share
125mmbo = $8.50 if 3P and,
125mmbo = $14.80 if 2P for my high side.
It's very early in the drilling and development plan for Costayaco, GTE may eventually drill 10 or more Costayaco wells prior to mid - 2009.
It doesn't take much forward guidance (anything over 31mmbo net of 2P reserves)from Costayaco 1-7 to underpin the current market capitalization, and you get a "free ride" on everything else.
What we call Costayaco is labeled Cafelina on the linked map with Costayaco -1 the red dot. As Costayaco wells are drilled to the north it may include (bleed into) the Moqueta structure (recently referred to as Norte Costayaco)or Moqueta may be a separate structure. There are at least three more exploration targets on the Chaza block with similar potential to Costayaco. Gran Tierra has 3D seismic coverage over the Moqueta prospect, and I assume (hope) the Moqueta prospect will be drilled in 2009.
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