SecProbe.io

CORRESP
1
filename1.htm

      Unassociated Document

             Jason H. Scott

               jscott@mcguirewoods.com

             Direct: 704.373.8862

               Direct
                Fax:
                704.353.6181

    April
      21,
      2006

    Mr.
      H.
      Roger Schwall

    Assistant
      Director

    Division
      of Corporation Finance

    Mail
      Stop
      7010

    Washington,
      D.C. 20549-7010

              Re:

              Gran
                Tierra Energy Inc. (the
                “Company”)

    Registration
      Statement on Form SB-2

    Filed
      March 10, 2006

    File
      No. 333-132352

    Form
      10-KSB for the fiscal year ended December 31, 2005

    Filed
      March 10, 2006

    File
      No. 333-111656

    Dear
      Mr.
      Schwall:

    This
      is
      in response to your comment letter of April 7, 2006 to Dana Coffield with
      respect to the above-referenced filings. The Company is simultaneously filing
      Amendment No. 1 to Registration Statement No. 333-132352 and Amendment No.
      1 to
      the Annual Report on Form 10-KSB for the period ended December 31, 2005.

    We
      have
      set forth below the comments in your letter of April 7, 2006 in italics with
      the
      Company’s responses to each.

    General

            1.

              You
                will expedite the review process if you address each portion of every
                numbered comment that appears in this letter. Provide complete responses
                and, where disclosure has changed, indicate precisely where in the
                marked
                version of the amendment you file we will find your responsive changes.
                Similarly, to minimize the likelihood that we will reissue comments,
                please make corresponding changes where applicable throughout your
                document. For example, we might comment on one section or example,
                but our
                silence on similar or related disclosure elsewhere does not relieve
                you of
                the need to make appropriate revisions elsewhere as
                appropriate.

    RESPONSE:
      We have
      addressed each of your comments in the letter below and in our filed amendments
      to our registration statement on Form SB-2/A and annual report on Form 10-KSB/A.
      We have indicated in this letter where our responsive changes appear in the
      marked versions of our SB-2/A and 10-KSB/A. All corresponding changes have
      been
      addressed throughout the documents.

    April
      21,
      2006

    Page
      2

    Cover
      Page of the Prospectus

              2.

              Please
                highlight the reference to the risk factors discussion later in the
                prospectus by prominent type or in another
                manner.

    RESPONSE:
      The
      type
      size has been increased and has been put in bold text on the cover page of
      the
      prospectus.

    Summary

    Our
      Company, page 1

              3.

              Please
                briefly describe the recent reverse takeover and provide the more
                detailed
                description in the Business section of the prospectus. The Summary
                section
                should provide a brief overview of the key aspects of the filing,
                and does
                not need to contain the detailed information set forth in the prospectus.
                Please refer to 503(a) of Regulation
                S-B.

    RESPONSE:
      We
      have
      briefly set forth certain information regarding the reverse takeover in the
      Prospectus Summary beginning on page 1 of the SB-2/A. A more extensive
      description of the transaction and the Company’s business is set forth in the
      Business section of the prospectus, beginning on pages 34, 38 and
      39.

    Goldstrike,
      page 2

              4.

              You
                state that immediately following the share exchange, Goldstrike disposed
                of its mineral claims. We also note the risk factor regarding your
                prior
                business that you have on page 8, and exhibits 10.5 and 10.11 that
                you
                have filed to the registration statement. Please provide a brief
                discussion of the terms of the split-off in the Business section
                of the
                prospectus.

    RESPONSE:
      We
      have
      included a paragraph regarding the Prior Goldstrike Business in the Business
      section of the prospectus, beginning on page 39 and on page 6 of the Form
      10-KSB/A

    Recent
      Developments, page 2

              5.

              Please
                update your disclosure regarding the loan that Goldstrike provided
                to Gran
                Tierra Canada to indicate the terms of the loan and whether it has
                been
                paid off.

    RESPONSE:
      We
      have
      updated our disclosure on page 2 of the prospectus regarding the loan that
      Goldstrike provided to Gran Tierra Canada to indicate that upon the
      consolidation of the companies, the loan became intercompany debt and will
      be
      extinguished.

      April
        21,
        2006

      Page
        3

              6.

              Please
                provide us with copies of all of the documents relating to the private
                placements that closed on September 1, 2005, October 7, 2005, October
                27,
                2005, and February 2, 2006.

    RESPONSE:
      Enclosed
      herewith please find copies of private placement memorandum, Canadian offering
      memorandum, a form of investor questionnaire, forms of registration rights
      agreements and forms of subscription agreements relating to such private
      placement.

    Risk
      Factors

    General

              7.

              We
                note
                that you have a going concern risk. Please add a separate risk factor
                that
                addresses your
                ability to continue to operate as a going
                concern.

    RESPONSE:
      We
      have
      included a going concern risk factor on page 8 of the prospectus.

    Penalties
      We May Incur..., page 11

              8.

              This
                risk factor is very general and could apply to any company in your
                industry, Please revise this risk factor to clarify how it impacts
                your
                business and operations
                specifically.

    RESPONSE:
      We
      have
      modified the risk factor relating to penalties we may incur on page 11 of the
      prospectus.

    Our
      Business Will Suffer if We Cannot Obtain…., page 13

              9.

              This
                risk factor is very general and could apply to any company in your
                industry. Please revise to make it specific to your business. For
                example,
                you state that your operations will require licenses and permits,
                and in
                some cases renewals, from governmental authorities. Please discuss
                the
                requirements for these licenses and permits, whether you have obtained
                any
                permits or licenses or the status of your pending
                applications.

    RESPONSE:
      We have
      modified the risk factor relating to licenses and permits required to conduct
      business on page 13 of the prospectus.

    Foreign
      Currency Exchange Rate Fluctuations..., page 13

              10.

              You
                state that there may be restrictions on expatriating proceeds and/or
                adverse tax consequences associated with holding local operations.
                Please
                provide more information on the impact that these events could have
                on
                your operations. Please also indicate whether there are, at this
                time, any
                such restrictions or tax
                consequences.

    RESPONSE:
      We
      have
      modified the risk factor relating to foreign currency exchange rate fluctuations
      and have separated that risk factor into two risk factors beginning on page
      13
      of the prospectus.

      April
        21,
        2006

      Page
        4

    Selling
      Stockholders, page 17

              11.

              In
                the footnotes to this table, please identify the natural persons
                with
                power to vote or to dispose of the securities offered for resale
                by all of
                the entities listed as selling shareholders. See Interpretation No.
                4S of
                the Regulation S-K section of the Division of Corporation Finance’s March
                1999 Supplement to the Manual of Publicly Available Telephone
                Interpretations.

    RESPONSE:
      In
      the
      footnotes to the Selling Stockholder table, we have identified the natural
      persons with the power to vote and dispose of the shares being
      registered.

    Market
      for Common Equity and Related Stockholder Matters

    Equity
      Compensation Plan, page 27

              12.

              Explain
                to us why the warrants issued to investors in the private placements
                in
                September, October and December, 2005 are listed on the table under
                “Equity compensation plans not approved by security
                holders.”

    RESPONSE:
      Under
      Item 201(d) of Regulation S-B, the table on page 27 of the prospectus should
      not
      have included the warrants issued to investors in the private placements in
      September, October and December, 2005. These warrants were not issued pursuant
      to a "compensation plan," as such term is used in Item 201(d) or the
      Instructions thereto. We have amended page 27 of the prospectus to delete the
      references to these warrants. The corresponding change has been made on pages
      13
      and 64 of the Form 10-KSB/A.

    Management’s
      Discussion and Analysis

    Overview,
      page 28

              13.

              We
                note your auditor’s report includes an explanatory paragraph indicating
                there is substantial doubt about your ability to continue as a going
                concern. Please disclose specifically within MD&A that there is
                substantial doubt about your ability to continue as a going concern.
                Discuss the pertinent conditions and events that give rise to this
                assessment, the possible effects of such conditions and events and
                management’s plans to circumvent such conditions and events. Please refer
                to Section 607.02 of the Financial Reporting Codification for additional
                guidance.

    RESPONSE:
      We
      have
      added specific disclosure relating to the Company’s ability to continue as a
      going concern in the MD&A section of the prospectus on page 28 and in the
      MD&A section of the Form 10-KSB/A on page 14.

      April
        21,
        2006

      Page
        5

              14.

              You
                state that your gross revenues were negatively impacted by extraordinary
                weather conditions in North Argentina, which reduced deliveries in
                November and December. Please add a risk factor that discusses the
                impact
                that severe weather may have on your
                operations.

    RESPONSE:
      We have
      added the risk factor “Drilling oil and gas wells could be hindered by
      hurricanes, earthquakes and other weather-related operating risks” on page 10 of
      the prospectus.

              15.

              Please
                provide a discussion of your plan of operations for the next twelve
                months. For example, we note that on page 42 you state that you will
                be
                assessing the production potential of the Nacatimbay field, including
                opportunities to extend
                production.

    RESPONSE:
      We
      have
      added a Plan of Operations section in the MD&A section of the prospectus on
      page 28 and in the MD&A section of the Form 10-KSB/A on page
      14.

              16.

              We
                note you filed Form 8-Ks on February 22, 2006 and March 2, 2006 to
                announce that you entered into agreements to acquire interests in
                certain
                properties. Please discuss the announced acquisitions of (a) a 50%
                interest in the El
                Vinalar Block in the Noroeste Basin of Argentina and (b) participation
                interests in eight properties owned by Compania General de Combustibles
                S.A. in northern Argentina. Specifically, please discuss the terms
                of
                these agreements, how you intend to fund the acquisitions, and how
                you
                anticipate these interests will impact your future results of operations
                and cash flows. Finally, tell us the reasons you decided against
                disclosing these agreements to acquire property interests as subsequent
                events within your financial statements. If required by Item 601(10)(C)
                of
                Regulation S-B, please also file the acquisition agreements as
                exhibits.

    RESPONSE:
      The
      Company’s acquisition of participation interests in eight properties owned by
      CGC, announced on February 22, 2006 is not considered probable at this time.
      The
      Company has entered into an agreement with CGC that is dependent on several
      conditions, including the waiving of rights of first refusal among partners
      of
      CGC for the principal properties, and the successful conclusion of financing
      for
      the transaction. CGC and the Company have not provided notice to the partners
      of
      CGC that they have a right of first refusal in connection with the Company’s
      contemplated acquisition. Negotiations are occurring to extend the closing
      of
      the transaction, beyond April 30, 2006.

    If
      completed the CGC property acquisition would increase production by
      approximately 670 bbl per day of oil production (net after royalties of 12%)
      and
      approximately 7.5 million cubic feet of gas per day (net after royalty of 12%).

    The
      Company’s acquisition and farm-in agreement to acquire a 50% interest in the El
      Vinalar block involves a cash payment of $950,000 plus a commitment to spend
      up
      to $2.7 million of the costs of a planned well. Closing of this acquisition
      is
      subject to several conditions, including the successful conclusion of financing.
      Negotiations are occurring to extend the closing of the transaction beyond
      April
      30 2006. The Company does not believe this transaction is probable at this
      time.

    For
      these
      reasons, the Company has not disclosed these matters as subsequent events in
      its
      financial statements.

      April
        21,
        2006

      Page
        6

    Operating
      Expenses, page 29

              17.

              Please
                spell out the acronym
                DD&A.

    RESPONSE:
      We have
      spelled out the acronym