On November 3, 2006, the License Contract for the Exploration and Exploitation of Hydrocarbons covering Block 122 in Peru between Gran Tierra Energy Peru and PeruPetro S.A. was ratified by Supreme Decree and is now effective. With a 100% working interest, Gran Tierra Energy is operator of the block.

Block 122 is located on the eastern flank of the Marañon Basin in northern Peru, on the crest of the Iquitos Arch and covers 1.2 million acres. The License Contract defines a seven-year exploration term divided into four periods, each involving a minimum work/financial commitment. The minimum commitment for the first work period, which is mandatory, is $0.5 million. The potential commitment over the seven-year period is $5.0 million and includes technical studies, seismic acquisition and the drilling of one exploration well. The License Contract defines an exploitation term of thirty years for commercial discoveries of oil.

Dana Coffield, President and Chief Executive Officer of Gran Tierra, stated, “The completion of this transaction marks the completion of our first stage of growth, building a base of production and prospective land in three target countries in South America. Our entries into Argentina, Colombia and Peru have each taken different approaches: via strategic property additions in Argentina, via a corporate acquisition in Colombia, and now via a wildcat exploration license in Peru. The combination provides a mix of production/cash flow, low risk drilling opportunities and higher risk/higher reward drilling opportunities that we intend to pursue aggressively over the coming years.”