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To: Dale Baker who wrote (97395)	1/18/2011 8:34:37 AM
From: Dale Baker	Respond to of 118717

PDP looks like a gem of an acquisition: "This transaction will add substantial assets featuring both high working interest and operatorship which complement our current assets in three of the four South American countries in which we operate," said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy. "The transaction is expected to be accretive to Gran Tierra Energy's shareholders in terms of reserves and production per share. It will add undeveloped oil and gas reserve potential in Colombia, exploration opportunities in Colombia and Peru and additional oil production and reserves in a rising oil price environment in Argentina. Upon closing of the Arrangement, Gran Tierra Energy will retain its strong balance sheet and cash position to be used in the development of the assets acquired in this transaction. The successful completion of the Arrangement will enable Petrolifera's shareholders to participate in the exciting future growth potential of Gran Tierra Energy." Petrolifera's third quarter 2010 reported daily sales volumes amounted to 3,564 barrels of oil equivalent ("BOE") per day, weighted 81% to crude oil and natural gas liquids with current production anticipated to be lower due to Petrolifera's recent capital constraints. In addition, net after royalty reserves (NI-51-101 basis) were evaluated by GLJ Petroleum Consultants and were estimated to be 7.8 million BOE on a proven basis and 14.3 million BOE on a proven plus probable basis at year-end 2009. Upon completion of the Arrangement, Gran Tierra Energy's proven and proven plus probable net after royalty reserves (NI-51-101 basis) are accordingly expected to increase to 29.5 million BOE, and 41.7 million BOE, respectively, based on year-end 2009 GLJ reserve reports. This would represent a 36% increase in proven reserves and a 52% increase in proven plus probable reserves. Updated 2010 reserve reports are expected to be released later this quarter. Petrolifera owns an interest in 11 exploration and production blocks; three are located in Colombia, three are in Peru and five are in Argentina. The Colombian blocks, comprising approximately 850,000 acres, are located in the Lower and Middle Magdalena Basins and are characterized by high quality light crude oil and natural gas. One crude oil discovery, La Pinta and one natural gas discovery, Brilliante, have been made in the Sierra Nevada Block in the Lower Magdalena Basin. Petrolifera is the operator of and currently owns a 100% working interest, subject to recent agreement pursuant to which Petrolifera agreed to transfer a 25% working interest to Gran Tierra Energy, upon receipt of approval from Colombia's National Hydrocarbon Agency. Both discoveries require additional testing and delineation drilling to determine commercial viability. In addition, a new exploratory well, San Angel X-1001, is expected to be drilled in the adjacent Magdalena Block in the first quarter of 2011; again, Petrolifera is the operator and has a 100% working interest. Petrolifera also holds a 50% working interest and is the operator of the Turpial block in the Middle Magdalena Basin, which is prospective for heavier crude oil. Petrolifera operates three 100% working interest blocks in Peru encompassing approximately 4.0 million acres. Block 106 is in the prolific Marañon Basin adjacent to the Corrientes Field, which according to industry reports, is the largest field in the Basin. This Block is immediately west to Gran Tierra Energy's existing acreage within Peru. Blocks 107 and 133 are located in the Ucayali Basin north-west of the Camisea Field. Numerous leads and prospects have been identified on this acreage with indications the region has proven petroleum systems generating light crude oil and natural gas, with evidence of reservoir quality sandstones. In Argentina, there are over 220,000 net acres in five contiguous blocks operated by Petrolifera in the prolific Neuquen Basin. Working interest in the blocks range from 25% to 100%. In the Puesto Morales/Rinconada Concession, which accounts for the majority of production, Petrolifera is operator and has a 100% working interest. Recently, these producing assets have received limited investment due to capital constraints, but with Gran Tierra Energy's strong balance sheet, increased activity is contemplated as steadily increasing regional commodity prices through 2009 and 2010 may facilitate the potential to realize additional shareholder value through reinvestment of internally generated cash flow from operations in Argentina.