West Face Capital to Nominate Six Highly Qualified Directors For Election to the Board of Gran Tierra Energy Inc.

Recommends Replacing Incumbent Board Which Has Presided
Over a More than 50% Stock Price Decline Since 2011

Calls for New Strategy Focused on Core Colombia Properties and Announces Support
For Highly Regarded Oil and Gas Veteran Gary Guidry to Lead Gran Tierra as CEO

TORONTO, April 21, 2015 /CNW/ - West Face Capital Inc. (West Face), whose managed funds beneficially own approximately 9.8% of Gran Tierra Energy Inc. (Gran Tierra) (NYSE MKT: GTE; TSX: GTE), today sent a letter to the Gran Tierra Board of Directors announcing its intention to nominate six highly qualified director candidates for election to the Board at the 2015 Annual Meeting of shareholders scheduled for June 24, 2015.

In the letter, West Face highlighted what it believes is Gran Tierra's failed high-risk, high-cost exploration strategy in Peru, Argentina, and Brazil and the destruction of more than half of the Company's market value since the beginning of 2011, all overseen by the current four-member Board of Directors. 

West Face also outlined its proposal for a new strategy focused on Gran Tierra's core Colombia properties to restore value for shareholders and voiced its support for Gary Guidry, a highly regarded oil and gas executive with an outstanding track record of value creation, as the right leader to assume the position of CEO of Gran Tierra.

"West Face is committed to fixing Gran Tierra and creating value on behalf of all shareholders," said Thomas Dea, Partner of West Face. 

"We are putting forward a highly-qualified slate of independent directors, including Gary Guidry, who, in our opinion, are far better equipped than the incumbent board members to implement a new strategic direction for Gran Tierra and to take the steps we believe are urgently required for the Company to get back on track and realize its full potential value".

The six West Face nominees are:

Nominee Key Qualifications

The letter sent today by West Face to the Gran Tierra Board follows:

"April 21, 2015

The Board of Directors of

Gran Tierra Energy Inc.
300, 625-11^th Avenue S.W.
Calgary, Alberta
Canada T2R 0E1

Dear Sirs:

West Face Capital Inc. (West Face), via funds we manage or advise (West Face Funds), intends to nominate six highly qualified candidates for election to Gran Tierra Energy Inc.'s (Gran Tierra) Board of Directors at the annual meeting to be held on June 24, 2015.  The new directors will have a mandate to replace the current Interim CEO with Gary Guidry, a highly regarded oil and gas executive with an outstanding track record of value creation in his four prior leadership roles as CEO.

The West Face Funds own approximately 9.8% of Gran Tierra's outstanding common shares, making us one of your largest shareholders, if not the largest.  West Face has a mandate to take large core positions in companies in which we have conducted extensive research and where we believe we can assist in realizing long-term value for the benefit of all shareholders.    

We are taking these actions with Gran Tierra because we believe the current four-member board, with an average tenure of seven years, has failed in its three most fundamental responsibilities: adopting a strategy for value creation, overseeing the proper allocation of capital, and ensuring the Company is led by the best possible CEO.

Lack of Proper Oversight has Resulted in Significant Destruction
of the Company's Value.

Since the beginning of 2011, the current board has approved $1.7 billion in spending between acquisitions and capital expenditures.  Of this amount, approximately $860 million was spent in Peru, Argentina and Brazil, where there have been no appreciable new discoveries, reserve additions or production growth.  Over the same period, the share price has declined from $8.18 to $3.38, a 59% loss in market value per share.  This dismal result was not due to declining oil prices – the share price had already fallen to $4.30 by July 2012.

In our opinion, the Board has been gambling on high-risk exploration using shareholders' capital, repeatedly and in the face of negative results, while at the same time losing focus on its promising, core Colombian assets.  For all of the capital deployed, Gran Tierra's core Colombian assets still provide most of the Company's production.  The Executive Chairman has called these excursions outside of Colombia "elephant hunting".  We call it engaging in high-risk, high-cost ventures in far less attractive locations, while ignoring the benefits of developed infrastructure, political stability, and access to global energy markets in your existing core geographies. 

Ineffectual Governance and Lack of Accountability.

In our opinion, the Board did not have the proper expertise to oversee the prior CEO and has avoided accountability for this deficiency.  On the day of the former CEO's resignation in February, the Board hastily promoted the Chairman, Jeffrey Scott, to "Executive Chairman" and raised the COO to Interim President and CEO.  There was no announcement of a CEO search.  There has been no clear articulation of strategy then or now, other than to be – in the Executive Chairman's words – "opportunity reactive".  We find the situation unacceptable. Mr. Scott's operating experience is limited to running a small private oil and gas company in western Canada.  He also continues to hold the title of Executive Chairman for another company and sits on several boards.  The Interim CEO, who may one day expand his experience to be a suitable CEO candidate, does not, in our view, have that experience today. 

We believe that Mr. Guidry's experience, by comparison, is clearly superior, having built exceptional value as CEO at four separate international oil and gas companies he led.

No Coherent Strategy.

We are undertaking these actions at a potentially important turning point for Gran Tierra.  The Company has approximately $332 million in cash, no drawn debt, and $150 million of capacity in its reserve-based credit facility.  In short, it has $482 million of "buying power", as well as the ability to undertake a business combination for shares.  In addition, the Company has attractive assets in Colombia and an ability to grow through targeted spending on new lands, through joint ventures or business combinations.  With the right leadership, we believe that Gran Tierra could become a very valuable company.  Alternatively, in our opinion, unless the history of poor governance and sub-par management is fixed, the Company risks further squandering its under-appreciated strategic position. 

We are not impressed by the Executive Chairman's articulation of strategy.  Here are statements from the Q4 2014 investors' conference call when asked about the company's strategy and planned use for its capital (our emphasis added):

"…And the timeline for the $300 million [cash on the balance sheet], I don't think we have one other than we intend to be opportunity reactive." 

- Jeffrey Scott, Executive Chairman

"Now, when I look at this, at the world in general, and the entire world is on sale. So, while we're Colombia-specific right now, and I think you're right to say that, the moment Peru is sort of on the backburner and Brazil isn't also around. But there are other opportunities around the world when the entire world is on sale." 

- Jeffrey Scott, Executive Chairman

"…But what I've challenged the management team is that we may take our geographic blinders off here and, if we see a really compelling opportunity elsewhere, maybe we have to look at it." 

- Jeffrey Scott, Executive Chairman

We take this to mean there is a real risk that management and this Board, unconstrained by proper oversight, will again fail to focus on Gran Tierra's core operating areas in Colombia and complete one or more ill-advised business combinations that again destroys value for Gran Tierra shareholders.

Bloated Overhead Costs.

Gran Tierra has excessive general and administrative (G&A) expense as compared to its most similar peer companies.  Gran Tierra's G&A was $5.82 per BOE of production in 2014¹.  By comparison, a subset of its peers had average G&A of $4.74 per BOE of production in 2014².

On the Q4 2014 conference call, Jeffrey Scott said Gran Tierra's high costs were the result of high oil prices.

"We're a fairly high G&A company and OpEx has been where it has been as a result of $100 oil." - Jeffrey Scott, Executive Chairman

Apart from finding this response to be a confusing approach to cost management, we believe high operating costs are symptomatic of poor management and a culture lacking in accountability, starting at the Board.

Misaligned Interests Between Shareholders and Directors.

Since 2008, secondary market purchases of Gran Tierra's common stock by current insiders have totalled 66,561 total shares.  In contrast, the Board saw fit to award the Executive Chairman 400,000 options and 100,000 restricted stock units (RSUs) upon being appointed to his current position, which also pays a base salary of $360,000 (Canadian dollars) cash per year.  In addition, the Board approved a so-called change-of-control payment equal to two times his base salary. 

The newly appointed Lead Director, Scott Price, has not purchased any Gran Tierra shares that we have been able to identify.  All of the common shares he owns appear to have been obtained by way of the Company's share exchange with Solana Resources in 2008.  In 2010, he sold over half of his shares for gross proceeds of more than $20 million prior to the acquisition of Petrolifera in early 2011.  The two other directors have very modest holdings.

By comparison, Gary Guidry and members of his team have acquired in the open market approximately 2.5 million Gran Tierra common shares worth approximately $8.6 million – even before having the ability to influence the Company's direction.  This meaningful commitment from a prospective CEO is indicative of his seriousness and confidence in his abilities to create value for Gran Tierra shareholders.

West Face Proposes a Refocused Strategy.

West Face believes Gran Tierra should re-evaluate money-losing initiatives in Peru and Brazil.  It should refocus financial and management resources on Colombia where it benefits from proven petroleum basins, well developed infrastructure, established markets, and scale.  The Company's cost structure should be brought into line and accountability should be introduced into the organization to drive consistent value creation.       

Refocus on Colombia.  Gran Tierra already has a well-established operating advantage in the Putumayo basin, with low-risk opportunities for expansion. In addition, we believe there are many opportunities for value creation in the middle and lower Magdalena basins as well as the Llanos basin. With a focus on proven basins within Colombia, we believe Gran Tierra is well positioned to create shareholder value through organic growth and smart acquisitions.  The preponderance of the Company's capital budget should be targeted to development, with a small allocation to exploration. 

Address Cost Structure.   Accountability starts at the Board and with the CEO and binds the organization together with a common purpose.  A competitive cost structure is the result of a well-run exploration, development and production company, not the end in itself.  Gran Tierra's operating and capital efficiency will be optimized by refocusing strategy on development, production, and exploration in Colombia.

Improve Capital Allocation.  Gran Tierra does not need to take "bet-the-farm" risks in frontier basins to build value.  Capital should be used primarily to appraise and develop attractive assets it already owns.  Over the last seven years, while Gran Tierra's attention was not focused on Colombia, a number of other companies have successfully undertaken lower-risk exploration in proven basins within Colombia.  We believe there is still considerable value to be built in Colombia, including in open lands and from joint venture partnerships and possible business combinations.  But if attractive projects are not identified in the future, capital should be returned to shareholders tax efficiently by way of share repurchases. 

West Face Proposes a Newly Reconstituted Board and New Management.

West Face Believes New Leadership is Required.  The Board of Directors should be renewed with highly qualified and experienced individuals.  The Board then should assume its mandate and engage Gary Guidry to lead the change as CEO.  We believe this will help unlock the Company's potential and value.

Gary Guidry is a Proven Value Creator.  The last four companies in which Mr. Guidry has been the CEO have averaged a 45% annualized return to shareholders over multiple market cycles and multiple operating jurisdictions³.  He is a professional engineer and has more than 35 years of experience developing and maximizing assets in the international oil and gas industry. He has direct experience managing large, international projects, including assets in Latin America, Africa, the Middle-East and Asia.

Most recently Mr. Guidry was the President and CEO of Caracal Energy, a London Stock Exchange listed Company with operations in Chad, Africa.  He held that position from mid-2011 until the Company was acquired by Glencore plc for $1.8 billion in mid-2014.  Shareholders received a return of 101% during this period, compared with a FTSE 350 return of 8% over the same period. 

Prior to Caracal, Mr. Guidry was the President and CEO of Orion Oil and Gas (TSX listed), which operated in western Canada from mid-2009 until mid-2011 when it was sold.  During his tenure, shareholders earned a return of 127% as compared with the TSX E&P Index return of 20%.  From May 2005 until December 2008, he was the President and CEO of Tanganyika Oil Company (TSX listed) which operated in Syria and Egypt. Under his leadership, Tanganyika grew production from 6,000 bbl/d to over 20,000 bbl/d and was purchased by Sinopec International Ltd. for $2.0 billion with shareholders receiving a return of 385% as compared to the TSX E&P index return of negative 7% over the same period.  Prior to Tanganyika, Mr. Guidry was CEO of Calpine Natural Gas Trust.  Between the IPO of the company in October 2003 and November 2004, when it was sold to Viking Energy Trust, he grew 2P reserves by 39% with shareholders earning a return of 62%.

In 2014, Mr. Guidry was awarded the Oil Council Executive of the Year award for his leadership role with Caracal Energy.

As a measure of his commitment, Mr. Guidry and his team have already made a large capital commitment to Gran Tierra through the personal acquisition of approximately 2.5 million common shares now worth $8.6 million.

West Face's Board Candidates are Well Qualified to Oversee Gran Tierra's Development. 

West Face intends to nominate six directors who each possess the capacity for rigorous and independent thinking.  They have varied professional backgrounds and will provide the required fresh perspective.  The current Board, in our view, is entrenched, unaccountable, inward-looking, and not aligned with shareholders.

Conclusion: Time for Action.

We do not have confidence in the Board of Directors and senior management of Gran Tierra.  As significant shareholders, we are troubled by the value destruction that has occurred under the current Board's watch, in the form of a more than 50% decline in the stock price since the beginning of 2011.  The status quo is unacceptable.  Gran Tierra needs a refocused strategy, a proven CEO, and a fresh perspective from the Board.  We request that you work constructively with us to make the required changes in the least disruptive way possible.  It's time to fix GTE.

Yours truly,

[signature]
Thomas P. Dea                                       
Partner"

About West Face Capital Inc.

West Face Capital Inc. is one of Canada's leading alternative investment managers. West Face has a seasoned multi-disciplinary investment team, proprietary origination channels, deep sector expertise and the ability to act on investment targets in domestic and international markets.

Additional Information

West Face SPV (Cayman) I L.P. ("West Face SPV") intends to make a filing with the Securities and Exchange Commission of a proxy statement and an accompanying proxy card to be used to solicit proxies in connection with the 2015 Annual Meeting of Stockholders (including any adjournments or postponements thereof or any special meeting that may be called in lieu thereof) (the "2015 Annual Meeting") of the Company.  Information relating to the participants in such proxy solicitation has been included in materials filed on April 21, 2015 by West Face SPV with the Securities and Exchange Commission pursuant to Rule 14a-12 under the Securities Exchange Act of 1934, as amended.  Stockholders are advised to read the definitive proxy statement and other documents related to the solicitation of stockholders of the Company for use at the 2015 Annual Meeting when they become available because they will contain important information, including additional information relating to the participants in such proxy solicitation.  When completed and available, West Face SPV's definitive proxy statement and a form of proxy will be mailed to shareholders of the Company.  These materials and other materials filed by West Face SPV in connection with the solicitation of proxies will be available at no charge at the Securities and Exchange Commission's website at www.sec.gov.  The definitive proxy statement (when available) and other relevant documents filed by West Face SPV with the Securities and Exchange Commission will also be available, without charge, by directing a request to West Face SPV's proxy solicitor, Okapi Partners, at its toll-free number (877) 796-5274 or via email at [email protected].

Cautionary Statement Regarding Forward-Looking Statements

The information herein contains "forward-looking statements." Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as "may," "will," "expects," "believes," "anticipates," "plans," "estimates," "projects," "targets," "forecasts," "seeks," "could" or the negative of such terms or other variations on such terms or comparable terminology. Similarly, statements that describe our objectives, plans or goals are forward-looking. Our forward-looking statements are based on our current intent, belief, expectations, estimates and projections regarding the Company and projections regarding the industry in which it operates. These statements are not guarantees of future performance and involve risks, uncertainties, assumptions and other factors that are difficult to predict and that could cause actual results to differ materially.  Accordingly, you should not rely upon forward-looking statements as a prediction of actual results and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

^{________________________________________________________________
1}Source: Company filings.  Estimate based on working interest production and includes G&A from discontinued operations.
² Stock option expense included in G&A.  Peers consist of Parex Resources (TSX: PXT), TransGlobe Energy Corporation (TSX: TGL), and Bankers Petroleum (TSX: BNK).  Peers were filtered based on having Canadian headquarters with international operations and at least 15,000 boe/d in production.
³The 45% average annual return is measured based on stock price performance over Gary Guidry's tenure as CEO at Caracal Energy, Orion Oil and Gas, Tanganyika Oil Company, and Calpine Natural Gas Trust.

SOURCE West Face Capital Inc.