SecProbe.io

CORRESP
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filename1.htm

              Jason
                H. Scott

              jscott@mcguirewoods.com

              Direct:
                704.373.8862

              Direct
                Fax: 704.353.6181

    July
      18,
      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 May 10, 2006 to Dana Coffield with respect
      to the above-referenced filings. The Company is simultaneously filing Amendment
      No. 2 to the Annual Report on Form 10-KSB for the period ended December 31,
      2005, and pursuant to a conversation with the staff, will not file Amendment
      No.
      2 to Registration Statement No. 333-132352 until deemed appropriate in light
      of
      any pending acquisitions.

    We
      have
      set forth below the comments in your letter of May 10, 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 in the same document
                or
                other document as appropriate.

    July
      18,
      2006

    Page
      2

    RESPONSE:
      We have
      addressed your comments in the letter below and in the filed amendment to the
      Company’s annual report on Form 10-KSB/A. We will also address your comments to
      the registration statement when the Company files its amended registration
      statement on Form SB-2/A. We have indicated in this letter where our responsive
      changes appear in the Form 10-KSB/A.

    Registration
      Statement on Form SB-2

    Recent
      Developments, page 2

              2.

              Expand
                this section to clearly discuss the reverse takeover cited in prior
                comment 3. We note your discussion on page
                39.

    RESPONSE:
      We
      will
      modify the “Recent Developments” section in response to this comment 2 when the
      Company files its amended registration statement.

              3.

              We
                note your response to our prior comment 5. We note your updated disclosure
                in regard to the loan. Please explain what you mean when you say
                the loan
                “will be extinguished.”

    RESPONSE:
      The
      loan
      will remain outstanding as inter-company debt. We will modify the Form SB-2/A
      in
      response to this comment 3 when the Company files its amended registration
      statement.

              4.

              We
                note your response to our prior comment 6. You indicated in your
                response
                that you provided copies of the private placement memorandum and
                Canadian
                offering memorandum. However, these documents were not included in
                the
                package you sent us. Please provide these
                documents.

    RESPONSE:
      Enclosed
      herewith please find copies of the private placement memorandum and Canadian
      offering memorandum.

              5.

              Please
                separate your discussion of the first and second private placements
                to
                more clearly state the total proceeds received from each placement
                (we
                note that you discuss the first placement and the first closing on
                the
                second placement together), the amount of cash commissions paid from
                the
                proceeds, identifying the persons who received the commissions, the
                net
                proceeds to you, and the use of proceeds. Please also provide the
                same
                information for the third
                offering.

    RESPONSE:
      We
      will
      modify the Form SB-2/A in response to this comment 5 when the Company files
      its
      amended registration statement.

              6.

              You
                provide two different dates for the date of the first closing on
                the
                second private placement, September 27 and October 27. Please revise
                or
                advise.

    July
      18,
      2006

    Page
      3

    RESPONSE:
      October
      27 is the date of the first closing on the second private placement. We will
      modify Form SB-2/A to reflect this date when the Company files its amended
      registration statement.

    Selling
      Stockholders, page 17

              7.

              We
                note your response to our prior comment 11. However, there are still
                several entities for which the identity of the natural persons with
                power
                to vote or to dispose of the securities offered for resale has not
                been
                provided. Please provide this
                information.

    RESPONSE:
      We
      will
      modify the “Selling Stockholders” section in response to this comment 7 when the
      Company files its amended registration statement.

    Management’s
      Discussion and Analysis

              8.

              We
                note that you have included a discussion about your ability to continue
                as
                a going concern in response to prior comment 13 in our letter dated
                April
                7, 2006. As previously explained, you should also disclose that there
                is
                substantial doubt about your ability to continue as a going concern,
                and
                include details of your plans to overcome your financial difficulties,
                to
                comply with the guidance in FRC Section 607.02; comparable disclosure
                is
                generally required in your financial statements under this guidance.
                In
                addition, indicate what you believe the outcome will be in the event
                your
                plans are unsuccessful in addressing the going concern
                uncertainty.

    RESPONSE:
      We
      will
      modify the “Management’s Discussion and Analysis” section in response to this
      comment 8 when the Company files its amended registration statement, and we
      have
      modified the “Management’s Discussion and Analysis” section on page 14 of
      the Form 10-KSB/A.

    Plan
      of Operations, page 28

              9.

              Within
                your response to prior comment 16 in our letter dated April 7, 2006,
                you
                state the consummations of the acquisitions you announced in the
                Form 8-Ks
                are not considered probable. Given that you had deemed information
                about
                these agreements to be material to security holders in filing the
                Form
                8-K’s, coupled with the level of detail of the terms of the agreements
                you
                have provided in the press releases, it is unclear to us how you
                reached
                the conclusion that these acquisitions are not
                probable.

    The
      determination of a transaction’s probability of occurrence is based on facts and
      circumstances; however, FRC 506.02.c.ii, states that the consummation of a
      transaction is considered probable whenever the registrant’s financial
      statements alone would not provide investors adequate financial information
      with
      which to make an investment decision. Based on the information you have
      disclosed, these potential acquisitions would appear to be material to your
      current and future financial position, results of operations and cash flows,
      and
      would therefore trigger a reporting obligation under this
      guidance.

    July
      18,
      2006

    Page
      4

    Please
      provide further detail to support the conclusions you have reached regarding
      the
      probability of these acquisitions as well as the potential acquisition of Argosy
      Energy International, announced in the Form 8-K that you filed on April 7,
      2006.
      It should be clear how you have evaluated each aspect of each transaction,
      including the likelihood of satisfying each of the contingencies
      mentioned.

    If
      you continue to regard these transactions as being not probable, you should
      submit the draft disclosure revisions that you would file in amendments to
      each
      of the Form 8-K’s to advise readers of your skepticism and uncertainty
      surrounding the prospect of completing these acquisitions, including details
      sufficient to understand the basis for your earlier disclosures, and the reasons
      that you believe financial information about the targets is no longer relevant.
      Under these circumstances, disclosure in your registration statement would
      also
      be essential to correct any misperceptions over the likelihood of
      occurrence.

    To
      the extent these business combinations are considered probable, you will be
      required to include financial statements of these businesses along with related
      pro forma financial information to comply with item 310(c) and (d) of Regulation
      SB. Please note we presume these acquisitions would be considered significant
      at
      the greater than 50% level; therefore, the acquiree financial statements would
      need to be included within the registration statement.

    In
      addition, please discuss the terms of each of these agreements (including the
      amount of any break-up fees), how you intend to fund the acquisitions, your
      increase in your capital expenditures, and how you anticipate these interests
      will impact your future results of operations and cash flows. If required by
      Item 601(10)(C) of Regulation S-B, please also file the acquisition agreements
      as exhibits.

    RESPONSE:
      Pursuant
      to our conversation with the Staff, the Company will not file an amended Form
      SB-2 until deemed appropriate in light of any pending acquisitions. If required,
      the Company will file financial statements of acquired businesses along with
      related pro forma financial information to comply with Item 310(c) and (d)
      of
      Regulation S-B.

              10.

              You
                state that no drilling is planned for 2006 and that your current
                cash and
                expected cash flow will fund operations through 2006. Please add
                a
                discussion of how your 2006 business plan will change if you close
                on any
                of your three planned acquisitions. We note that in the press release
                filed as an exhibit to the Form 8-K filed April 7, 2006, you state
                that
                “[a] total of nine (gross) wells have been planned for 2006/early
                2007….”
                You also state that the corresponding capital budget is approximately
                $25
                million.

    RESPONSE:
      Pursuant
      to our conversation with the Staff, the Company will not file an amended Form
      SB-2 until deemed appropriate in light of pending acquisitions. The Company
      will
      add a discussion of any changes to the 2006 business plan, if
      applicable.

    July
      18,
      2006

    Page
      5

    Liquidity
      and Capital Resources

    Liquidity,
      page 20

              11.

              We
                note your response to our prior comment 20. You state that after
                escrow is
                terminated, you will still be subject to additional cash calls. Please
                discuss the reasons for any additional cash calls, their amount and
                their
                anticipated timing.

    RESPONSE:
      We
      will
      modify the “Liquidity” section in response to comment 11 when the Company files
      its amended registration statement, and we have modified the “Liquidity” section
      on page 16 of the Form 10-KSB/A.

    Business

    The
      Argentina Acquisitions, page 38

              12.

              We
                note your response to our prior comment 22. We re-issue this comment
                in
                light of your need to discuss the CGC acquisition in the registration
                statement. Please state whether your pending acquisition of interests
                of
                CGC include any of the properties listed in this section. If so,
                please
                discuss how the acquisition would affect your
                operations.

    RESPONSE:
      Pursuant
      to our conversation with the Staff, the Company will not file an amended Form
      SB-2 until deemed appropriate in light of any pending acquisitions. The Company
      will discuss the acquisition of CGC assets as required at that
      time.

    Directors,
      Executive Officers, Promoters and Control Persons

    Board
      Committees, page 47

              13.

              We
                note your statement that you audit committee charter will be available
                on
                your website as soon as practicable. We also note that you filed
                your
                audit committee charter as an exhibit to your Form 10-KSB filed on
                March
                10, 2006. Please advise as to when your audit committee charter will
                be
                posted to your website.

    RESPONSE:
      The
      Company’s audit committee charter has been posted to its website.

    2005
      Equity Incentive Plan

    Duration,
      Amendment and Termination, page 52

              14.

              You
                state that the plan terminates on November 10, 2005. The incentive
                plan
                filed as an exhibit states that the plan will expire on November
                10, 2015.
                Please revise or advise.

    RESPONSE:
      The plan
      terminates on November 10, 2015. We will modify the “Duration, Amendment and
      Termination” section to reflect the November 10, 2015 expiration date when the
      Company files its amended registration statement, and we have modified the
      Form
      10-KSB/A on page 61.

    July
      18,
      2006

    Page
      6

    Description
      of Securities

    Exc