* Sees net oil pay of 118 feet, up from 44 feet
* Cuts Q3 production view to 13,200 bopd
* Cites disruptions at OTA pipeline
* Shares rise as much as 6.5 percent
Oct 8 Canada's Gran Tierra Energy (GTE.TO) said
initial drilling results at its Moqueta-3 delineation well in
Colombia indicated a significant oil column, sending its shares
up 6.5 percent.
Preliminary results at the well indicated net oil pay of 118
feet, up from 44 feet from the Moqueta-2 well, the company
said, adding that it will begin a three-week test program to
confirm fluid content and productivity of the zones.
The oil and gas exploration company also said it would
drill the Moqueta-4 well to further test the extension of the
Analyst Dan Grager of Peters & Co Ltd said the importance
of this well would be to test the lateral extension of the
"They don't know how big this find is because the three
wells they've drilled are quite close to each other and they
are down-dip. So, Moqueta-4 is going to be the well that will
tell them how big this discovery is."
Grager said he estimates an unrisked discovery of about 15
million barrels at Moqueta, with a risked number of about 8
Gran Tierra said its third-quarter production would fall
short of its forecast, due to the disruptions in the OTA
The company said it expects third-quarter net production,
net after royalty at 13,200 barrels of oil per day (bopd),
lower than its earlier estimate of 14,000-16,000 bopd.
Christopher Brown, analyst at BMO Capital Markets-Canada
said the drop in production was of little concern.
"I think the idea is that despite the quarterly production
being off expectations, there is enough behind-pipe opportunity
to restore production to previous levels and meet
expectations," he said.
Gran Tierra said disruption at the OTA pipeline, which is
operated by Colombian state oil company Ecopetrol, lead to 22
days of downtime in the third quarter. The pipeline was back in
service on Sept. 20, 2010, it said.
"It is sort of an operational expectation that you're going
to have those delays periodically," said Brown, adding that the
pipeline being offline a couple of times in a year was
The company, which owns and operates assets in South
America, said current net production after royalty from all of
its properties stood at about 15,000 bopd.
Gran Tierra also said it expects the construction of the
8-kilometer Moqueta to Costayaco pipeline in Colombia to begin
in the fourth quarter of 2010 and long-term flow testing to
start in the first quarter of 2011.
The Calgary, Alberta-based company's shares, which have
gained nearly 39 percent in value in the last three months,
rose to C$7.99 before paring some of the gains to trade at
C$7.69 Friday on the Toronto Stock Exchange.
(Reporting by Abhiram Nandakumar in Bangalore; Editing by Vyas
Mohan, Jarshad Kakkrakandy)