Gran Tierra Energy (GTE : TSX : $5.80) - Buy - Target: C$6.50
Frederick Kozak
Comment: 2009 year-end results; maintain BUY rating and $6.50 target price

On February 25, Gran Tierra released its 2009 full-year financial and operational results and also provided an update regarding its operations in Colombia, Argentina, Peru and Brazil. The announcement contained no surprises with the results falling in line with our expectations. We are maintaining our BUY rating and C$6.50 target price. Our target price is based on the after-tax value of the company's fully diluted Proven plus Probable (2P) reserves plus value from the company's exploration upside potential. The company has planned an 11-well exploration program that will comprise the drilling of seven wells in Colombia and four wells in Peru in 2010. The next catalyst will be the drilling of the Moqueta-1 well adjacent to the Costayaco field. Later in Q2, the company will commence a four-well program in Peru, where it is testing a geologic model that, if successful, could result in a major new oil discovery.