Gran Tierra Energy Inc. (GTE) is an oil and gas exploration and production company with operations in Colombia, Argentina and Peru. The company's estimate of total proved reserves (net of royalties and third party interests) as of December 31, 2007, was 6.4 million barrels of oil, including 5.3 million proved developed reserves.

In Colombia, the company holds a 35% participation in the producing Santana and Guayuyaco Blocks; a 35% participation in the Juanambu discovery (in the Guayuyaco Block), which established production in November 2007; a 50% participation in the Chaza Block, which established production in 2007; and a 100% participation in the Rio Magdalena Block, 20% at Talora, 15% at Mecaya and 80% at Azar, all in the exploration phase; and a 100% participation in two technical evaluation areas in the Putumayo Basin. GTE is the operator of all properties.

In 2008, the company will focus on the development of the Costayaco discovery in the Chaza Block, where it plans to drill six development wells, including the completion of Costayaco-2 which began drilling in December 2007, and Costayaco-3 which entered the testing phase in February, 2008. Also in 2008 it plans to drill one additional development well on the Juanambu discovery, complete one workover and drill one exploration well on the Azar Block, drill one exploration well on the Rio Magdalena Block and proceed with seismic reprocessing, acquisition and prospect generation on the other blocks and technical evaluation areas. In addition GTE will develop production and transportation infrastructure for its producing properties.

In Argentina, GTE holds a 14% participation in the producing Palmar Largo Joint Venture; a 50% participation in the producing El Vinalar Block; a 100% participation in the producing El Chivil Block; and a 100% participation in the Nacatimbay Block, 100% participation in the Ipaguazu Block, and varying interests at Surubi, Valle Morado and Santa Victoria, all non-producing as of December 31, 2007. GTRE operates all properties with the exception of Palmar Largo.

GTE was awarded two exploration blocks in Peru in the last quarter of 2006 under a license contract for the exploration and exploitation of hydrocarbons. Block 122 covers 1,217,651 acres and block 128 covers 2,218,389 acres. The blocks are located in the eastern flank of the Maranon Basin in northern Peru. There is a 5%-20% sliding scale royalty rate on the lands, dependent on production levels. The exploration contracts expire in 2014 and work commitments are defined in four exploration periods spread over seven years. There is a financial commitment of $5 million over the seven years for each block which includes technical studies, seismic acquisition and the drilling of exploration wells. Acquisition of technical data through aero magnetic-gravity studies began in 2007, and continued through the first half of 2008. This will be followed by seismic planning work in 2008 and seismic acquisition in 2009. The production contract expires in 2037.

At December 31, 2007, the company had a total of 38.0 gross (12.7 net) producing wells, of which 37 gross (11.7 net) were oil. In 2007, the company drilled 7.0 gross (2.85 net) wells in Colombia and 1.0 gross (0.5 net) well in Argentina. Total developed and undeveloped acreage at December 31, 2007, was 6.5 million gross (5.9 million net) acres, including 5.7 million gross (5.5 million net) undeveloped.