Canadian energy company Gran Tierra Energy has announced an oil discovery in Ecuador, the company's seventh successful find in the Arawana/Zabaleta field area.

The Zabaleta-K1 well, the fourth exploration well in the Chanangue Block, has substantiated the potential of the Arawana/Zabaleta field area.

Gran Tierra president and CEO Gary Guidry said: “Gran Tierra is excited to announce its seventh Ecuador oil discovery from the Zabaletea-K1 well. This well was a pivotal exploration well that has further substantiated and delineated the Arawana/Zabaleta field area.

“The Zabaleta-K1 was drilled over 4km from the Arawana-J1 well drilled earlier this year and was charged with oil highlighting the magnitude of this discovery. The success of this well solidifies Gran Tierra’s understanding of the field area and will be a key pillar of development growth plans in South America for years to come.”

After running production casing and perforating the Basal Tena oil zone, the well has begun production testing, yielding 1,105bopd with a low water cut and favourable gas to oil ratio.

The last two discoveries were made earlier this year at the Charapa-B6 well in the Oriente basin and Charapa-B7 well in Ecuador.

Other successful explorations include the Charapa-B5, Bocachico Norte-J1 and Arawana-J1 wells.

Concurrently, Gran Tierra has entered into a definitive agreement with Logan Energy for the sale of a 50% stake and operatorship in part of its Simonette Montney assets in Alberta, Canada, for C$52m ($37.2m).

The strategic partnership with Logan Energy will advance the development of Gran Tierra's Simonette assets.

The purchase price is subject to customary adjustments, with the transaction expected to close by the end of 2024, subject to customary closing conditions.

The transaction also involves Logan carrying the first development well in the Lower Montney region, valued at $3m net to Gran Tierra, and providing priority access to its infrastructure.

Guidry stated: “This strategic partnership with a top-tier operator, who already has established infrastructure in the area, will significantly accelerate development and generate near-term cash flow.

“We intend to use a portion of the proceeds to deliver value to our shareholders through development of other key assets in the portfolio and share buybacks, while also strengthening our balance sheet by reducing net debt.”