SecProbe.io

CORRESP
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    VIA
EDGAR

    January
19, 2010

    Mr. Karl
Hiller

    Branch
Chief

    Securities
and Exchange Commission

    100 F
Street, N.E.

    Washington,
D.C. 20549-3628

              Re:

              Gran Tierra Energy
      Inc.

                Form
      10-K for the Fiscal Year Ended December 31, 2008

                Filed
      February 27, 2009

                File
      No. 001-34018

    Dear Mr.
Hiller:

    On behalf
of Gran Tierra Energy Inc. (“Gran
Tierra” or the “Company”)
we are responding to the information request received from the staff (the “Staff”) of
the Securities and Exchange Commission (the “Commission”)
by telephone on January 14, 2010, with respect to Gran Tierra’s Form 10-K for
the Fiscal Year Ended December 31, 2008.

    As
discussed during the telephone call with the Staff, Gran Tierra included a
letter of explanation to the parties to the Registration Rights Agreements
(which Gran Tierra was seeking an amendment) providing the
following:

    We
reviewed a variety of options to resolve the liquidated damages issue and view
this solution as the optimum one to benefit both shareholders and Gran Tierra
for a number of reasons.  Payment of liquidated damages in cash would
severely impact Gran Tierra’s ability to carry out its drilling
program.  The alternative, to pay the liquidated damages in shares, is
equally problematic.  It would require Gran Tierra to enter into
additional registration rights agreements with the investors, the filing of yet
another resale registration statement, and the initiation of the entire SEC
filing and approval process again. This process would cause the company to incur
additional legal and accounting fees to get another registration statement
effective, in addition to incurring an additional and significant amount of
management time as well as the associated lost-opportunity cost.

    The
letter continues:

    In
exchange, for the waiver of liquidated damages, Gran Tierra will decrease the
exercise price of the warrants held by each investor in the group and extend the
term of the warrant for one year.  Currently each warrant has an
exercise price of $1.75 per share.  So, if we obtain the waiver for
your group, thereby relieving the company of its obligation to pay you in cash,
your warrant will automatically become exercisable at an exercise price of $1.05
per share.  In addition, the expiry date of the warrant is being
extended one year from the original expiry date.  This increased value
in the warrants is equivalent to the $0.155 liquidated damages accrued per
unit.

      300,
611-10 th Avenue
SW , Calgary , Alberta , Canada   (403) 265-3221 Fax (403)
265-3242   www.grantierra.com

    As we
previously explained in our letters to the Staff, in 2007, Gran Tierra incurred
the liquidated damages under the Registration Rights Agreements as a result of
the associated resale registration statement, required to be declared effective
by November 14, 2006, not being declared effective until May 14,
2007.  As a result of this breach of the Registration Rights
Agreements, Gran Tierra accrued $8.6 million of liquidated damages as of May 14,
2007 which the Company was obligated to pay in cash or issue (at the option of
the parties to the Registration Rights Agreements) additional share capital to
settle this obligation.  Ultimately, the breaches of the Registration
Rights Agreements were waived and the terms of the warrants were modified to
decrease the exercise price from $1.75 to $1.05 and to extend the term by an
additional year in lieu of a cash payment or issuance of additional share
capital to settle the liquidated damages.

    If Gran
Tierra had completed its own independent valuation of the modification of the
warrants using a Black Scholes model, the fair value of this modification would
have been equivalent to $4.3 million.  The difference between such
calculated fair value and the amount of the liquidated damages would be recorded
as an equity transaction as we believe that the transaction represented the
extinguishment of debt with a related party.  Footnote 1 to Accounting
Principles Board Opinion No. 26, Early Extinguishment of Debt,
(APB 26) states (emphasis added):

    If
upon extinguishment of debt, the parties also exchange unstated (or stated)
rights or privileges, the portion of the consideration exchanged allocable to
such unstated (or stated) rights or privileges should be given appropriate
accounting recognition.  Moreover, extinguishment transactions
between related entities may be in essence capital
transactions.

    As the
holdings of the parties to the Registration Rights Agreements comprised over 50%
of the outstanding shareholdings of Gran Tierra and the Registration Rights
Agreements provided that decisions would be made by a majority of the then
outstanding registrable shares, we believe the settlement was negotiated with a
related party (as defined in Statement of Financial Accounting Standards No. 57,
Related Party
Disclosures.).

    APB 26,
Footnote 1 is not prescriptive as to where in equity this difference should be
recorded and since the amounts were settled via a modification of the warrants,
Gran Tierra recorded this difference to shareholders’ equity as part of
“Warrants”.

    In
conclusion, Gran Tierra believes that the accounting for the transaction should
remain unchanged.  Gran Tierra, however, will provide additional
explanatory disclosure relating to the transaction and the accounting therefor
in future filings.

    * * *
*

    In
addition, Gran Tierra Energy Inc. acknowledges:

          -2-

              ·

              Gran
      Tierra is responsible for the adequacy and accuracy of the disclosure in
      the filing;

              ·

              Staff
      comments or changes to disclosure in response to Staff comments do not
      foreclose the Commission from taking any action with respect to the
      filing; and

              ·

              Gran
      Tierra may not assert Staff comments as a defense in any proceeding
      initiated by the Commission or any person under the federal securities
      laws of the United States.

    Please do
not hesitate to call me at (403) 265-3221, ext. 230, if you have any questions
or would like any additional information regarding this matter.

    Sincerely,

    Gran
Tierra Energy Inc.

    By:          /s/
Martin Eden

    Martin Eden

    Chief Financial Officer

              cc:

              Dana
      Coffield – Chief Executive Officer and President

                Nancy
      H. Wojtas, Esq.

          -3-