UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.              )

Filed by the Registrant x
Filed by a Party other than the Registrant ¨
Check the appropriate box:
x
Preliminary Proxy Statement
¨
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
¨
Definitive Proxy Statement
¨
Definitive Additional Materials
¨
Soliciting Material Pursuant to §240.14a-12

Gran Tierra Energy Inc. 
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
¨
No fee required.
x
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
(1)
Title of each class of securities to which transaction applies:
 
 
 Common shares of Solana Resources Limited (“Common Shares”)
 
(2)
Aggregate number of securities to which transaction applies:
 
 
126,426,792 Common Shares; 3,945,000 options to purchase Common Shares with an exercise price of less than US$3.89 per share; and 7,500,000 warrants to purchase Common Shares with an exercise price of less than US$1.89 per share (U.S. dollar amounts based on an exchange rate of CDN$1.00 = US$0.9428 (the “Exchange Rate”)).
 
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
 
Calculated solely for purposes of determining the filing fee. The maximum aggregate value of the transaction was determined by adding: (A) 126,426,792 Common Shares multiplied by US$3.87 per share (value of one Common Share, based on the high and low prices of the Common Shares on the TSX Venture Exchange on September 3, 2008, converted to U.S. dollars based on the Exchange Rate); (B) options to purchase 3,945,000 Common Shares multiplied by US$2.09 (which is the difference between US$3.87 and the weighted average exercise price of US$1.78 per share, based on the Exchange Rate); and (C) warrants to purchase 7,500,000 Common Shares multiplied by US$1.98 (which is the difference between US$3.87 and the weighted average exercise price of US$1.89 per share based on the Exchange Rate). In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filing fee was determined by multiplying 0.0000393 by the sum of the preceding sentence.
 
(4)
Proposed maximum aggregate value of transaction:
 
 
 $512,366,735.
 
(5)
Total fee paid:
 
 
 $20,136.
¨
Fee paid previously with preliminary materials.
¨
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
(1)
Amount Previously Paid:
     
 
(2)
Form, Schedule or Registration Statement No.:
     
 
(3)
Filing Party:
     
 
(4)
Date Filed:
     
   
Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.
 

 
 
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
OF GRAN TIERRA ENERGY INC.

to be held , 2008
 
and
 
Solana logo
 
NOTICE OF SPECIAL MEETING OF SECURITYHOLDERS
OF SOLANA RESOURCES LIMITED

to be held , 2008
 
and
 
NOTICE OF PETITION TO THE COURT OF QUEEN'S
BENCH OF ALBERTA
 
and
 
JOINT MANAGEMENT INFORMATION CIRCULAR AND PROXY STATEMENT
 
with respect to a
 
PLAN OF ARRANGEMENT
 
involving
 
GRAN TIERRA ENERGY INC., GRAN TIERRA EXCHANGECO INC.,
SOLANA RESOURCES LIMITED and THE SOLANA SECURITYHOLDERS
 
, 2008
 

 
TABLE OF CONTENTS
 
NOTICE OF PETITION
 
viii
     
EXCHANGE RATE OF CANADIAN AND U.S. DOLLARS
 
x
     
ABBREVIATIONS & CONVERSIONS
 
xi
     
JOINT MANAGEMENT INFORMATION CIRCULAR AND PROXY STATEMENT
 
1
     
PROXY SUMMARY INFORMATION
 
7
     
RISK FACTORS
 
23
     
CAUTIONARY STATEMENT ABOUT FORWARD LOOKING STATEMENTS
 
28
     
INFORMATION ABOUT THE MEETINGS AND VOTING
 
30
     
DESCRIPTION OF THE ARRANGEMENT
 
38
     
THE ARRANGEMENT AGREEMENT
 
73
     
CERTAIN INFORMATION ABOUT THE COMBINED COMPANY
 
83
     
CERTAIN INFORMATION ABOUT GRAN TIERRA
 
96
     
CERTAIN INFORMATION ABOUT SOLANA
 
121
     
COMPARISON OF STOCKHOLDER RIGHTS
 
141
     
INFORMATION ABOUT TAX CONSIDERATIONS
 
151
     
BUSINESS OF THE GRAN TIERRA SPECIAL MEETING
 
165
     
OTHER MATTERS
 
176
     
SOLANA GENERAL PROXY MATTERS
 
177
     
CERTAIN FINANCIAL INFORMATION ABOUT THE COMBINED COMPANY
 
179
     
CERTAIN FINANCIAL INFORMATION ABOUT SOLANA
 
187
     
GRAN TIERRA DOCUMENTS INCORPORATED BY REFERENCE
  
218

ANNEX A
 
Form of Arrangement Resolution
ANNEX B
 
Arrangement Agreement
ANNEX C
 
Interim Order of the Court
ANNEX D
 
Plan of Arrangement
ANNEX E
 
Provisions Attaching to the GTE–Solana Exchangeable Shares
ANNEX F
 
Form of Support Agreement
ANNEX G
 
Form of Voting and Exchange Trust Agreement
ANNEX H
 
Opinion of Blackmont Capital Inc.
ANNEX I
 
Opinion of Tristone Capital Inc.
ANNEX J
 
Section 191 of the Alberta Business Corporations Act Respecting Dissenters’ Rights of Appraisal
 

 
ANNEX K
 
Text of amendment to Gran Tierra’s articles of incorporation, as described in Gran Tierra’s Proposal 2
ANNEX L
  
Text of amendment to Gran Tierra’s articles of incorporation, as described in Gran Tierra’s Proposal 3

UNLESS OTHERWISE INDICATED, ALL DOLLAR AMOUNTS IN THIS JOINT MANAGEMENT
INFORMATION CIRCULAR AND PROXY STATEMENT ARE EXPRESSED IN U.S. DOLLARS.
 

 
 
To Our Stockholders:

We invite you to participate in a special meeting of the stockholders of Gran Tierra Energy Inc., or “Gran Tierra”, to be held at ●, Calgary, Alberta at 9:00 a.m., Mountain Time, on ●, ●, 2008.

On July 28, 2008, Gran Tierra and Solana Resources Limited, or “Solana”, entered into an agreement providing for the business combination of the two companies. The proposed transaction requires the approval of our stockholders to approve: (1) the issuance of the shares of Gran Tierra common stock to be issued in the transaction; and (2) an amendment to our articles of incorporation to create a new special voting share to enable the exchangeable shares to be issued in the proposed transaction to vote, as well as to make several technical changes, all as more fully described in the attached Joint Management Information Circular and Proxy Statement, which we refer to as the “Joint Proxy Statement”. At the special meeting, we will ask our stockholders to approve this issuance and amendment. In addition, we are also taking the opportunity to ask our stockholders to approve (a) an amendment to our articles of incorporation to increase the number of shares of our authorized common stock and change the board voting requirement for issuance of common stock from unanimous to a simple board action, and (b) an increase in the number of shares authorized for issuance under our equity incentive plan. Neither of these latter two proposals are necessary for the completion of the combination of Gran Tierra and Solana; however, they will facilitate operating the combined company, and will only be implemented if the combination of the two companies occurs.

Under the terms of the agreement with Solana, each Solana shareholder will receive, for each Solana common share held, either: (1) 0.9527918 of a share of Gran Tierra common stock; or (2) 0.9527918 of a common share of a Canadian subsidiary of Gran Tierra, or a “GTE–Solana Exchangeable Share”. The GTE–Solana Exchangeable Shares: (a) will have the same voting rights, dividend entitlements and other attributes as Gran Tierra common stock; (b) will be exchangeable, at each stockholder's option, on a one-for-one basis into Gran Tierra common stock; and (c) subject to compliance with the listing requirements of the Toronto Stock Exchange, will be listed on the Toronto Stock Exchange. The GTE–Solana Exchangeable Shares will automatically be exchanged for Gran Tierra common stock five years from closing, and in specified other events. The transaction will also result in Solana optionholders and Solana warrantholders receiving either Solana common shares pursuant to a cashless exercise of their options or warrants or cash payments, in both cases based on the above exchange ratio. In addition, Solana options held by an employee, officer, director or consultant continuing with the combined company may be exchanged for options to purchase shares of Gran Tierra common stock; and holders of Solana warrants may elect to continue to hold their warrants, which would then be exercisable into shares of Gran Tierra common stock pursuant to the terms of the warrants. 

The transaction is structured to be completed as a statutory plan of arrangement pursuant to the Business Corporations Act (Alberta), or the “ABCA”. Upon completion of the transaction, Solana will become an indirect wholly-owned subsidiary of Gran Tierra. On a diluted basis, upon the closing of the plan of arrangement, former Solana securityholders will own approximately 49% of the combined company and the current Gran Tierra securityholders will own approximately 51% of the combined company. The proposed transaction is subject to regulatory, stock exchange, court and stockholder approvals.

The combined company will create a more substantial South American oil and gas exploration and production company with significant oil reserves, production and land positions in Colombia. Importantly, it will provide for the consolidation of a 100% working interest in the Costayaco field, a major light oil discovery made in Colombia in 2007 currently undergoing delineation and development. The increased efficiency of developing this field with a 100% working interest, with its growing reserves, production and cash flow, will drive the continued exploration and development of the combined entity’s existing assets, and position the company for growth in the near term and continued new venture activities in the future. We expect the combined company to have a 2008 production exit rate of approximately 15,000 barrels of oil per day net after royalties. Following the transaction, Gran Tierra will have a working interest in 26 exploration and production licenses (24 operated by Gran Tierra), with a vast land base encompassing 7.1 million gross acres (6.2 million net acres) in three countries: Colombia, Peru and Argentina.
 
i

 
The board of directors of Gran Tierra has received an opinion from Blackmont Capital Inc. that, subject to the factors and assumptions set forth in the opinion, the exchange ratio of 0.9527918 GTE–Solana Exchangeable Shares or shares of Gran Tierra common stock for each Solana common share is fair, from a financial point of view, to Gran Tierra.

The attached Joint Proxy Statement contains a description of this business combination, as well as information regarding Solana, Gran Tierra and Gran Tierra Exchangeco Inc. Please give this material your careful consideration and, if you require assistance, consult your financial, tax or other professional advisors.  

The board of directors of Gran Tierra unanimously recommends that stockholders vote in favor of all four proposals. Each company has scheduled a special stockholders meeting to be held on ●, 2008. We invite you to attend our meeting, details of which are included in the enclosed Notice of Special Meeting and Joint Proxy Statement. Regardless of the number of shares you own or whether you plan to attend the meeting, it is important that your shares be represented and voted. Voting instructions are included.

On behalf of your management team and board of directors, I thank you for your support and urge you to vote “For” approval of each of (1) the issuance of the shares of Gran Tierra common stock in the transaction, (2) the amendment to our articles of incorporation to create the new share of special voting stock and make several technical changes, (3) the amendment to our articles of incorporation to increase the number of shares of our authorized common stock and change the board voting requirement for the issuance of common stock, and (4) the amendment and restatement of our equity incentive plan to increase the number of shares that may be issued under the plan.

Sincerely,

/s/ Dana Coffield

Dana Coffield
President, Chief Executive Officer, and Director

Mailing Date: , 2008
 
ii

 
Solana logo
 
Dear Shareholders, Optionholders and Warrantholders:
 
You are being asked to attend a special meeting of the common shareholders, optionholders and warrantholders, collectively, the “Solana Securityholders”, of Solana Resources Limited, or “Solana”, to be held at ● on ●, 2008. At the meeting you will be asked to consider a proposed arrangement, or the “Arrangement”, involving Solana, Gran Tierra Energy Inc., or “Gran Tierra”, Gran Tierra Exchangeco Inc., a Canadian subsidiary of Gran Tierra, or “Exchangeco”, and the Solana Securityholders.
 
On July 28, 2008, Solana agreed to combine with Gran Tierra. If the transaction is completed, the Arrangement will result in the holders of Solana common shares, the “Solana Shareholders”, receiving either (i) 0.9527918 of a share of common stock of Gran Tierra or (ii) 0.9527918 of a common share of Exchangeco, a “GTE–Solana Exchangeable Share”, for each Solana common share held. The GTE–Solana Exchangeable Shares: (i) will have the same voting rights, dividend entitlements and other attributes as Gran Tierra common stock; (ii) will be exchangeable, at each shareholder's option, on a one-for-one basis, into Gran Tierra common shares; and (iii) subject to compliance with the listing requirements of the Toronto Stock Exchange, will be listed on the Toronto Stock Exchange. The GTE–Solana Exchangeable Shares will automatically be exchanged for Gran Tierra common shares five years from closing, and in specified other events. The Arrangement will also result in Solana optionholders and Solana warrantholders receiving either Solana common shares pursuant to a cashless exercise of their options or warrants or cash payments, in both cases based on the above exchange ratio. In addition, Solana options held by an employee, officer, director or consultant continuing with the combined company may be exchanged for options to purchase shares of Gran Tierra common stock; and holders of Solana warrants may elect to continue to hold their warrants, which would then be exercisable into shares of common stock of Gran Tierra pursuant to the terms of the warrants.
 
The transaction is structured to be completed as a statutory plan of arrangement pursuant to the Business Corporations Act (Alberta), or the “ABCA”. Upon completion of the transaction, Solana will become an indirect, wholly-owned subsidiary of Gran Tierra. On a diluted basis, upon the closing of the plan of arrangement, former Solana Securityholders will own approximately 49% of the combined company and the current Gran Tierra security holders will own approximately 51% of the combined company. The proposed transaction is subject to regulatory, stock exchange, court and stockholder approvals.
 
The special resolution approving the Arrangement must be approved by at least 66 2/3% percent of the votes cast by Solana Securityholders as a single class, either in person or by proxy, at the special meeting. Gran Tierra stockholders will meet on the same day to consider the approval of, among other things, the issuance of Gran Tierra common stock in connection with the transaction.
 
The combined company will create a more substantial South American oil and gas exploration and production company with significant oil reserves, production and land positions in Colombia. Importantly, it will provide for the consolidation of a 100% working interest in the Costayaco field, a major light oil discovery made in Colombia in 2007 currently undergoing delineation and development. The increased efficiency of developing this field with a 100% working interest, with its growing reserves, production and cash flow, will drive the continued exploration and development of the combined entity’s existing assets, and position the company for growth in the near term and continued new venture activities in the future. We expect the combined company to have a 2008 production exit rate of approximately 15,000 barrels of oil per day net after royalties. Following the transaction, the combined company will have a working interest in 26 exploration and production licenses (24 operated by the combined company) with a vast land base encompassing 7.1 million gross acres (6.2 million net acres) in three countries: Colombia, Peru and Argentina.
 
iii

 
Solana’s board of directors has unanimously determined that the Arrangement is in the best interests of our company as well as the Solana Securityholders and recommends that you vote in favor of the Arrangement at the special meeting. Solana’s board of directors also received an opinion from Tristone Capital Inc. as of the date thereof that the consideration to be received by holders of Solana’s common shares is fair, from a financial point of view, to such holders. Our management and directors, who own approximately 6.4% of Solana’s outstanding common shares, and approximately 13.4% of Solana’s outstanding common shares on a diluted basis, have entered into support agreements with Gran Tierra whereby they have agreed to vote in favor of the Arrangement at the special meeting.
 
The attached Joint Management Information Circular and Proxy Statement contains a description of the Arrangement, as well as information regarding Solana, Gran Tierra and Exchangeco. Please give this material your careful consideration and, if you require assistance, consult your financial, tax or other professional advisors. Also enclosed is a letter of transmittal to allow holders of Solana’s common shares to receive shares of Gran Tierra common stock or GTE–Solana Exchangeable Shares, as applicable. Please follow the instructions in the letter of transmittal. Letters of transmittal to allow Solana optionholders and warrantholders to make elections and receive the applicable cash payments or securities in respect of their Solana options and/or warrants will be delivered separately from the proxy materials.
 
It is important that your Solana securities be represented at the special meeting. Whether or not you are able to attend, we urge you to complete the enclosed form of proxy and return it in the envelope provided or by fax to the attention of Valiant Trust Company, Proxy Department at (403) 233-2857 not later than 48 hours (excluding Saturdays, Sundays and statutory holidays) prior to the commencement of the special meeting.
 
On behalf of the directors of Solana, I would like to express our gratitude for the support that our shareholders have demonstrated with respect to our decision to combine with Gran Tierra.
 
Yours very truly,
 
/s/ J. Scott Price
 
J. Scott Price
President and Chief Executive Officer
 
iv


GRAN TIERRA ENERGY INC.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
 
To Be Held On , 2008
 
Dear Stockholder:
 
You are cordially invited to attend a special meeting of stockholders of GRAN TIERRA ENERGY INC., a Nevada corporation. The meeting will be held on , 2008 at ● a.m., Mountain Time, at ● for the following purposes:

1. To approve the issuance of shares of Gran Tierra common stock to be issued in connection with the acquisition of the outstanding securities of Solana Resources Limited;

2. To approve an amendment to Gran Tierra’s articles of incorporation to create a new special voting share to enable the exchangeable shares to be issued in the proposed transaction with Solana Resources Limited to vote, as well as to make several technical changes;

3. To approve an amendment to Gran Tierra’s articles of incorporation to increase the total authorized number of shares of common stock from 300,000,000 to 600,000,000 and change the board voting requirement for issuance of common stock from unanimous to a simple board action;

4. To approve Gran Tierra’s 2007 Equity Incentive Plan, as amended and restated, to increase the number of shares available for issuance thereunder from 9,000,000 shares to 18,000,000 shares; and

5. To conduct any other business properly brought before the meeting.
 
These items of business are more fully described in the Joint Management Information Circular and Proxy Statement accompanying this Notice.
 
If the first proposal is not approved by Gran Tierra’s stockholders, the proposals numbered 2, 3 and 4 above will not be implemented, notwithstanding that they may have been approved by Gran Tierra’s stockholders.

The record date for the special meeting is September 15, 2008. Only stockholders of record at the close of business on that date may vote at the special meeting or any adjournment thereof.
 
By Order of the Board of Directors
 
/s/ Martin Eden
 
Martin Eden
Chief Financial Officer and Secretary
 
CALGARY, ALBERTA
, 2008
 
You are cordially invited to attend the meeting in person. Whether or not you expect to attend the meeting, please complete, date, sign and return the enclosed proxy, or vote over the Internet as instructed in these materials, as promptly as possible in order to ensure your representation at the meeting. A return envelope (which is postage prepaid if mailed in the United States) is enclosed for your convenience. Even if you have voted by proxy, you may still vote in person if you attend the meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder.
 
v

 
SOLANA RESOURCES LIMITED
NOTICE OF SPECIAL MEETING OF SOLANA SECURITYHOLDERS

To Be Held On , 2008
 
NOTICE IS HEREBY GIVEN that a special meeting (the “Solana Special Meeting”) of the holders of the common shares (“Solana Shares”), options and warrants (collectively, with the Solana Shares, the “Solana Securities”) of Solana Resources Limited (“Solana”) will be held at ●, at ● a.m. (Mountain Time) for the following purpose:
 
(a)
to consider and, if thought advisable, to pass, with or without variation, a special resolution (the “Arrangement Resolution”), the full text of which is set forth in Annex A to the accompanying Joint Management Information Circular and Proxy Statement dated , 2008 (the “Joint Proxy Statement”), to approve an arrangement (the “Arrangement”) involving Solana, Gran Tierra Energy Inc., Gran Tierra Exchangeco Inc. and the holders of the Solana Securities (“Solana Securityholders”), all as more particularly described in the Joint Proxy Statement; and
 
(b)
to transact such further and other business as may properly be brought before the Solana Special Meeting or any adjournment thereof.
 
Specific details of the matters to be put before the Solana Special Meeting are set forth in the Joint Proxy Statement.

The record date (the “Solana Record Date”) for determination of Solana Securityholders entitled to receive notice of and to vote at the Solana Special Meeting is September 25, 2008. Only Solana Securityholders whose names have been entered in the registers of the Solana Securityholders on the close of business on the Solana Record Date will be entitled to receive notice of and to vote at the Solana Special Meeting, provided that, to the extent a holder of Solana Shares transfers the ownership of any Solana Shares after the Solana Record Date and the transferee of those Solana Shares establishes ownership of such Solana Shares and demands, not later than 10 days before the Solana Special Meeting, to be included in the list of holders of Solana Shares eligible to vote at the Solana Special Meeting, such transferee will be entitled to vote those Solana Shares at the Solana Special Meeting.

A Solana Securityholder may attend the Solana Special Meeting in person or may be represented by proxy. Solana Securityholders who are unable to attend the Solana Special Meeting or any adjournment thereof in person are requested to date, sign and return the accompanying form of proxy for use at the Solana Special Meeting or any adjournment thereof. To be effective, the form of proxy for Solana Securityholders must be received by Solana c/o Valiant Trust Company, 310, 606 - 4th Street SW, Calgary, Alberta, T2P 1T1 or by fax to the attention of the Proxy Department at (403) 233-2857 no later than forty-eight (48) hours (excluding Saturdays, Sundays and statutory holidays) prior to the commencement of the Solana Special Meeting or any adjournment thereof. The time limit for the deposit of proxies may be waived by the chairman of the Solana Special Meeting in his discretion, without notice.

Registered holders of Solana Shares have the right to dissent (“Dissenting Shareholders”) with respect to the Arrangement Resolution and, if the Arrangement Resolution becomes effective, to be paid the fair value of their Solana Shares in accordance with the provisions of Section 191 of the Business Corporations Act (Alberta), (the “ABCA”), and the Interim Order (the “Interim Order”), a copy of which is attached as Annex C. A Solana Shareholder's right to dissent is more particularly described in the Joint Proxy Statement and the text of Section 191 of the ABCA as set forth in Annex J to the accompanying Joint Proxy Statement. A Dissenting Shareholder must send to Solana a written objection to the Arrangement Resolution, which written objection must be received by Solana, care of its counsel, Davis LLP, 1000, 250 - 2nd Street S.W., Calgary, Alberta, T2P 0C1, Attention: Kenneth P. Reh by 4:00 p.m. on the fifth Business Day immediately preceding the date of the Solana Special Meeting.
 
vi

 
Failure to strictly comply with the requirements set forth in Section 191 of the ABCA, may result in the loss of any right to dissent. Persons who are beneficial owners of Solana Shares registered in the name of a broker, custodian, nominee or other intermediary who wish to dissent should be aware that only the registered holders of Solana Shares are entitled to dissent. Accordingly, a beneficial owner of Solana Shares desiring to exercise the right to dissent must make arrangements for the Solana Shares beneficially owned by such holder to be registered in the holder’s name prior to the time the written objection to the Arrangement Resolution is required to be received by Solana or, alternatively, make arrangements for the registered holder of such Solana Shares to dissent on behalf of the holder.
 
Dated at the City of Calgary, in the Province of Alberta, this ●th day of ●, 2008.

BY ORDER OF THE BOARD OF DIRECTORS OF
Solana Resources Limited
 
/S/ RAY ANTONY
 
Ray Antony
Chairman
 
vii

 
IN THE COURT OF QUEEN’S BENCH OF ALBERTA
JUDICIAL DISTRICT OF CALGARY
IN THE MATTER OF Section 193 of the
Business Corporations Act, R.S.A. 2000, c. B-9, as amended
 
AND IN THE MATTER OF A PROPOSED ARRANGEMENT
INVOLVING SOLANA RESOURCES LIMITED, GRAN TIERRA
ENERGY INC., GRAN TIERRA EXCHANGECO INC., AND THE
SECURITYHOLDERS OF SOLANA RESOURCES LIMITED

NOTICE OF PETITION
 
NOTICE IS HEREBY GIVEN that a petition (the “Petition”) has been filed with the Court of Queen's Bench of Alberta, Judicial District of Calgary (the “Court”) on behalf of Solana Resources Limited (“Solana”) with respect to a proposed arrangement (the “Arrangement”) under section 193 of the ABCA, involving Solana, Gran Tierra, Gran Tierra Exchangeco Inc. (“Exchangeco”) and holders of common shares, options and warrants of Solana (“Solana Securityholders”) which Arrangement is described in greater detail in the Joint Management Information Circular and Proxy Statement of Solana and Gran Tierra dated ●, 2008, accompanying this Notice of Petition. At the hearing of the Petition, Solana intends to seek:
 
(a)
a declaration that the terms and conditions of the Arrangement are fair to the Solana Securityholders from a substantive and a procedural point of view;
 
(b)
an order approving the Arrangement pursuant to the provisions of section 193 of the ABCA;
 
(c)
a declaration that the Arrangement will, upon the filing of the Articles of Arrangement pursuant to the provisions of Section 193 of the ABCA, become effective in accordance with its terms and will be binding on and after the Effective Date as defined in the Arrangement; and
 
(d)
such other and further orders, declarations and directions as the Court may deem just.
 
AND NOTICE IS FURTHER GIVEN that the said Petition was directed to be heard before a Justice of the Court of Queen's Bench of Alberta, 601 - 5th Street S.W., Calgary, Alberta, on the ●th day of ●, 2008 at ● p.m. (Calgary time), or as soon thereafter as counsel may be heard. Any Solana Securityholder or any other interested party desiring to support or oppose the Petition, may appear at the time of hearing in person or by counsel for that purpose. Any Solana Securityholder or any other interested party desiring to appear at the hearing is required to file with the Court, and serve upon Solana on or before noon on , 2008, a notice of intention to appear, including an address for service in the Province of Alberta together with any evidence or materials which are to be presented to the Court. Service on Solana is to be effected by delivery to the solicitors for Solana, at the addresses below. If any Solana Securityholder or any other interested party does not attend, either in person or by counsel, at that time, the Court may approve the Arrangement as presented, or may approve it subject to such terms and conditions as the Court shall deem fit, without any further notice.
 
AND NOTICE IS FURTHER GIVEN that no further notice of the Petition will be given by Solana and that in the event the hearing of the Petition is adjourned only those persons who have appeared before the Court for the application at the hearing shall be served with notice of the adjourned date.
 
AND NOTICE IS FURTHER GIVEN that the Court, by order dated September ●, 2008, has given directions as to the calling of the meeting of Solana Securityholders for the purpose of such holders voting upon the resolution to approve the Arrangement.
 
viii

 
AND NOTICE IS FURTHER GIVEN that a copy of the said Petition and other documents in the proceedings will be furnished to any Solana Securityholders or other interested party requesting the same by the undermentioned solicitors for Solana upon written request delivered to such solicitors as follows:

Davis llp
1000, 250 - 2nd Street S.W.
Calgary, Alberta T2P OC1
Attention: Kenneth P. Reh

DATED at the City of Calgary, in the Province of Alberta, this ●th day of September, 2008.
 
BY ORDER OF THE BOARD OF DIRECTORS OF SOLANA RESOURCES LIMITED
 
/s/ J. Scott Price
J. Scott Price
President and Chief Executive Officer
 
ix


EXCHANGE RATE OF CANADIAN AND U.S. DOLLARS

On , 2008, the exchange rate for one Canadian dollar expressed in U.S. dollars based on the noon buying rate of the Federal Reserve Bank of New York was US$.

For each period, the following table provides the high and low exchange rates for one Canadian dollar expressed in U.S. dollars, the average of these exchange rates on the last day of each month during the period, and the exchange rate at the end of the period, in each case based upon the inverse of the noon buying rate in New York City for cable transfers in Canadian dollars, as certified for customer purposes by the Federal Reserve Bank of New York:
 
   
Six Month Period
Ended June 30,
 
Twelve Month Period Ended December 31,
 
   
2008
 
2007
 
2006
 
2005
 
2004
 
2003
 
High
 
US$
1.0291
  US$
1.0908
  US$
0.9100
  US$
0.8690
  US$
0.8493
  US$
0.7738
 
Low
   
0.9714
   
0.8437
   
0.8528
   
0.7872
   
0.7158
   
0.6384
 
Average
   
0.9950
   
0.9376
   
0.8844
   
0.8276
   
0.7702
   
0.7186
 
Period End
   
0.9818
   
1.0120
   
0.8582
   
0.8579
   
0.8310
   
0.7738
 

On , 2008, the exchange rate for one U.S. dollar expressed in Canadian dollars based on the noon spot rate of the Bank of Canada was CDN$.

For each period, the following table provides the high and low exchange rates for one U.S. dollar expressed in Canadian dollars, the average of these exchange rates on the last day of each month during such period, and the
exchange rate at the end of such period, based upon the noon spot rate of the Bank of Canada:

   
Six Month
Period Ended
June 30,
 
Twelve Month Period Ended December 31,
 
   
2008
 
2007
 
2006
 
2005
 
2004
 
2003
 
High
 
CDN$
1.0324
 
CDN$
1.1853
 
CDN$
1.1726
 
CDN$
1.2704
 
CDN$
1.3968
 
CDN$
1.5747
 
Low
   
0.9719
   
0.9170
   
1.0990
   
1.1507
   
1.1774
   
1.2924
 
Average
   
1.0054
   
1.0666
   
1.1308
   
1.2085
   
1.2980
   
1.3914
 
Period End
   
1.0186
   
0.9881
   
1.1653
   
1.1659
   
1.2036
   
1.2924
 
 
x

 
ABBREVIATIONS & CONVERSIONS
 
Abbreviations
 
Oil and Natural Gas Liquids
Natural Gas
Bbl
barrel
Mcf
thousand cubic feet
Bbls
barrels
MMcf
million cubic feet
MBbls
thousand barrels
Mcf/d
thousand cubic feet per day
MMbbls
million barrels
   
Bbls/d
barrels per day
   
BOPD
barrels of oil per day
   

Other

Boe
barrel of oil equivalent of natural gas and crude oil on the basis of 1 Boe for 6 Mcf of natural gas
Boe/d
barrel of oil equivalent per day
CDN$
Canadian dollars
Col$
Colombian pesos
MBoe
1,000 barrels of oil equivalent
WTI
West Texas Intermediate, the reference price paid in United States dollars at Cushing, Oklahoma for crude oil of standard grade
GAAP
Generally Accepted Accounting Principles
 
Conversions

To Convert From
To
Multiply By
Mcf
Cubic metres
28.174
Cubic metres
Cubic feet
35.494
Bbls
Cubic metres
0.159
Cubic metres
Bbls oil
6.290
Feet
Metres
0.305
Metres
Feet
3.281
Miles
Kilometres
1.609
Kilometres
Miles
0.621
Acres
Hectares
0.405
Hectares
Acres
2.471

Barrel of Oil Equivalency
 
The term barrels of oil equivalent may be misleading, particularly if used in isolation. A Boe conversion ratio of six thousand cubic feet per barrel (6 Mcf: 1 Bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
 
xi

 
JOINT MANAGEMENT INFORMATION CIRCULAR AND PROXY STATEMENT
 
with respect to a
 
PLAN OF ARRANGEMENT
 
involving
 
GRAN TIERRA ENERGY INC., GRAN TIERRA EXCHANGECO INC.,
SOLANA RESOURCES LIMITED and THE SOLANA SECURITYHOLDERS

QUESTIONS AND ANSWERS ABOUT THE ARRANGEMENT

Questions and Answers For Gran Tierra Stockholders And Solana Shareholders, Warrantholders And Optionholders

Why am I receiving these materials?

You are receiving these materials because Gran Tierra Energy Inc., or “Gran Tierra”, and Solana Resources Limited, or “Solana”, want to combine their businesses, and you are either:

·
a stockholder of Gran Tierra, and the Gran Tierra board of directors, or the “Gran Tierra Board”, is soliciting your proxy to vote at a special meeting of the stockholders of Gran Tierra, or the “Gran Tierra Special Meeting”, relating to, among other things, this transaction, or

·
a shareholder, optionholder or warrantholder of Solana, and the Solana board of directors, or the “Solana Board”, is soliciting your proxy to vote at a special meeting of the securityholders of Solana, or the “Solana Special Meeting”, relating to this transaction.

Gran Tierra intends to mail this Joint Management Information Circular and Proxy Statement, or “Joint Proxy Statement”, and its accompanying proxy card on or about ●, 2008 to all Gran Tierra stockholders of record entitled to vote at the Gran Tierra Special Meeting.

Solana intends to mail this Joint Proxy Statement and its accompanying proxy card on or about ●, 2008 to all holders of Solana common shares, or “Solana Shareholders”, optionholders and warrantholders, or collectively with the Solana Shareholders the “Solana Securityholders”, of record entitled to vote at the Solana Special Meeting.

When and where are the special meetings?

Both meetings will take place on , 2008. The Gran Tierra Special Meeting, will be held at a.m., Mountain Time, at . The Solana Special Meeting will be held at a.m., Mountain Time, at .

How will the combination of the two companies be accomplished?

If approved, the combination of the two companies will be accomplished by a statutory plan of arrangement involving Solana, Gran Tierra, Gran Tierra Exchangeco Inc., an indirect wholly-owned Canadian subsidiary of Gran Tierra, or “Exchangeco”, and Solana Securityholders, all as more particularly described in this Joint Proxy Statement, and which is referred to as the “Arrangement”.
 
1

 
Why do Gran Tierra and Solana want to combine their businesses?

Gran Tierra and Solana are both oil and gas exploration and production companies the primary asset of which is their respective ownership interests in the Costayaco field, a major oil and gas discovery located in Colombia currently under delineation and development, as well as other complementary interests and operations in Colombia. Gran Tierra and Solana believe that the proposed combination will complement each of its existing businesses. By combining the businesses of both companies, Gran Tierra and Solana expect to consolidate 100% of the working interest in the Costayaco field allowing for more efficient development of the field, and creating a stronger oil and gas exploration company with approximately 7.1 million gross acres (6.2 million net acres), production capacity of approximately 15,000 boe/d net after royaties at the end of 2008 and proved reserves of approximately 18 million barrels.

Who will manage the combined company after the combination?

If completed, under the terms of the Arrangement, Gran Tierra will acquire 100% of the outstanding common shares of Solana, or “Solana Shares”, and Solana will become a wholly-owned indirect subsidiary of Gran Tierra. The combined company, which will retain the name “Gran Tierra Energy Inc.” and be headquartered in Calgary, Alberta, Canada, will be managed by the current Gran Tierra management team, and will have a seven member board of directors which will initially include the five current members of the Gran Tierra Board. Scott Price, Solana’s current President and Chief Executive Officer, and Ray Antony, Solana’s current Chairman of the Board, will also join as members of the Gran Tierra Board.

What votes are required to complete the Arrangement?

The Arrangement requires the approval of the holders of at least two-thirds of the Solana Shares, options and warrants, referred to collectively as the “Solana Securities”, voting in person or by proxy as a single class, at the Solana Special Meeting. The issuance of the Gran Tierra common stock in connection with the consummation of the Arrangement requires the affirmative vote of a majority of the shares present in person or represented by proxy at the Gran Tierra Special Meeting and entitled to vote. The approval of the amendment to Gran Tierra’s articles of incorporation that create the special voting share to facilitate the voting of the exchangeable shares of Exchangeco, or the “GTE–Solana Exchangeable Shares”, and make technical changes to Gran Tierra’s articles of incorporation requires the vote of (a) the holders of shares of Gran Tierra common stock and the exchangeable shares of Gran Tierra Goldstrike Inc., or “GTE–Goldstrike Exchangeable Shares”, entitling them to exercise at least a majority of the combined voting power of the total number of outstanding shares of Gran Tierra common stock and GTE–Goldstrike Exchangeable Shares, and (b) the holders of shares of GTE–Goldstrike Exchangeable Shares entitling them to exercise at least a majority of the voting power of the total number of outstanding shares of GTE–Goldstrike Exchangeable Shares.

What votes are required to complete Gran Tierra’s other proposals?

The amendment to Gran Tierra’s articles of incorporation to increase the total authorized number of shares of common stock from 300,000,000 to 600,000,000 and change the board voting requirement for issuance of common stock from unanimous to a simple board action requires the affirmative vote of the holders of shares of Gran Tierra common stock and GTE–Goldstrike Exchangeable Shares entitling them to exercise at least a majority of the combined voting power of the total number of outstanding shares of Gran Tierra common stock and GTE–Goldstrike Exchangeable Shares. The amendment and restatement of Gran Tierra’s 2007 Equity Incentive Plan, as amended and restated, to increase the number of shares available for issuance thereunder from 9,000,000 shares to 18,000,000 shares, requires the affirmative vote of a majority of the shares present in person or represented by proxy at the Gran Tierra Special Meeting and entitled to vote.

What are the other material conditions to consummation of the Arrangement?

The Arrangement is subject to the receipt of required governmental and regulatory approvals, and approval of the plan of arrangement, attached to the Joint Proxy Statement as Annex D, the “Plan of Arrangement”, giving effect to the Arrangement by the Court of Queen's Bench of Alberta, or the “Court”. In addition, Gran Tierra is obligated to file a registration statement on Form S-3 which must be declared effective by the U.S. Securities and Exchange Commission, or the “SEC”, prior to completion of the Arrangement and, pursuant to the Arrangement Agreement, attached hereto as Annex B, the Arrangement must be completed on or before November 15, 2008, unless extended by the parties. The Arrangement is also subject to other customary closing conditions.
 
2

 
When do you expect the Arrangement to be completed?

We expect to complete the Arrangement on or before November 15, 2008.

Who do I call if I have more questions?

For questions about voting and proxies, Gran Tierra stockholders may call:

The Altman Group
Phone: 866-530-8636

For other information, Gran Tierra stockholders may contact:

Martin Eden
Chief Financial Officer and Secretary
Phone: (403) 265-3221
Fax: (403) 265-3242

For questions about voting and proxies, Solana Securityholders may call:

Valiant Trust Company
Phone: (403) 233-2801
Fax: (403) 233-2857

For other information, Solana Securityholders may contact:

J. Scott Price
President and Chief Executive Officer
Phone: (403) 770-1822
Fax: (403) 770-1826
E-mail: jsp@solanaresources.com

Additional Questions and Answers For Gran Tierra Stockholders

Why is Gran Tierra entering into this transaction?

Gran Tierra believes the transaction is in the best interest of Gran Tierra and its stockholders. The benefits of the transaction include:

·
Gran Tierra expects the combined company to have a larger asset base with a 100% working interest in the Costayaco field, one of the major oil discoveries in Colombia in recent years, allowing for more efficient development of the field;

·
Gran Tierra expects the combined company to have substantially increased cash flows and working capital which will allow for the pursuit of additional exploration opportunities on the combined company’s large undeveloped land base in Colombia, Argentina and Peru, and additional new venture growth opportunities;

·
Gran Tierra expects the combined company to have a larger market capitalization and better access to capital and financial markets, which would enable the combined company to raise additional capital more easily, if needed, to fund its expansion plans than either company could if not combined;

·
Gran Tierra expects the shares of the combined company to have greater public float and liquidity; and

·
Gran Tierra expects to achieve economies of scale and synergies by combining the two companies.
 
3

 
 
Why is Gran Tierra seeking to amend its articles of incorporation to provide for a new special voting share and make other technical amendments?

In order for the GTE–Solana Exchangeable Shares to have the voting power of a share of Gran Tierra common stock, there must be a share of Gran Tierra capital stock through which they are entitled to vote. The creation of the new special voting share enables this voting mechanism. In addition, Gran Tierra believes that it is prudent to clarify that the current special voting share created to facilitate the GTE–Goldstrike Exchangeable Shares will vote together with the common stock, the new special voting share and any other shares of preferred stock in the future, as this may not currently be clear in the Gran Tierra articles of incorporation.

Why is Gran Tierra seeking to increase its authorized common stock?

Gran Tierra believes that the combination of the two companies will approximately double the asset base and outstanding number of shares of its common stock, and significantly increase the number of its employees. In addition, Gran Tierra believes that it will hire additional personnel in the future. As a result, the Gran Tierra Board believes that it is therefore appropriate to also double the authorized number of shares of its common stock to enable Gran Tierra to be in a position to issue additional shares of its common stock in connection with stock options granted and to be granted, or for purposes of acquiring other companies and assets as the Gran Tierra Board deems advisable. In addition, Gran Tierra believes that Gran Tierra Board action by majority vote, rather than by unanimous vote, is typical and appropriate for the approval of issuances of authorized but unissued Gran Tierra common stock, and so has included this change as well in the amendment to its articles of incorporation.

Why is Gran Tierra seeking to increase the number of shares available to it under its 2007 Equity Incentive Plan?

Gran Tierra believes that the combination of the two companies will approximately double the asset base and outstanding shares of the company and significantly increase its work force. In addition, Gran Tierra intends to hire additional personnel following the combination of the two companies. Gran Tierra therefore believes that it is appropriate to double the number of shares available for issuance under its 2007 Equity Incentive Plan. The granting of stock awards under this plan enables Gran Tierra to attract and retain its employees and consultants, who will be critical to the success of the combined company.

Additional Questions and Answers For Solana Shareholders, Optionholders and Warrantholders

Why is Solana entering into this transaction?

Solana believes the transaction is in the best interest of Solana Securityholders. The benefits of the transaction include:

 
·
0.9527918 of a share of Gran Tierra common stock or 0.9527918 of a GTE–Solana Exchangeable Share represents a significant premium of approximately 26% over the trading price of Solana Shares immediately prior to the announcement of the combination;

 
·
Solana expects the combined company to have a larger asset base with a 100% working interest in the Costayaco field, one of the major oil discoveries in Colombia in recent years, allowing for more efficient development of the field;

 
·
Solana expects the combined company to have a larger market capitalization and better access to capital and financial markets, which would enable the combined company to raise additional capital more easily, if needed, to fund its expansion plans than either company could if not combined;

 
·
Solana expects the shares of the combined company to have greater public float and liquidity;

 
·
Solana expects the combined company to have substantially increased cash flows which will allow for the pursuit of additional exploration opportunities on the combined company’s large undeveloped land base in Colombia, Argentina and Peru, and additional new venture growth opportunities, thereby increasing the probability of additional exploration success;

4

 
 
·
the transaction is structured to provide a tax deferral opportunity for certain Canadian resident Solana Shareholders;

·
Solana expects the combined company to benefit from the strong leadership of directors from both Solana and Gran Tierra; and
 
 
·
Solana warrantholders and some Solana optionholders can elect to participate in the combined company by ultimately receiving shares of Gran Tierra common stock or GTE–Solana Exchangeable Shares, as applicable, or can elect to receive a cash payment in exchange for their securities, or a combination of the foregoing, providing alternatives for such securityholders.

What will I receive as a result of this transaction?

Canadian resident Solana Shareholders (other than Dissenting Shareholders, as defined in the section below entitled “Dissenters’ Rights” on page 14, Solana Shareholders who are partnerships that are not Canadian partnerships for the purposes of the Income Tax Act (Canada) and shareholders who are exempt from tax under Part I of the Income Tax Act (Canada)) will receive 0.9527918 of a GTE–Solana Exchangeable Share issued by Exchangeco for each Solana Share. All other Solana Shareholders (other than Dissenting Shareholders) will receive 0.9527918 of a share of Gran Tierra common stock. The Arrangement will also result in Solana optionholders and Solana warrantholders receiving either Solana Shares pursuant to a cashless exercise of their options or warrants or cash payments, in both cases based on the above exchange ratio of 0.9527918, or the “Exchange Ratio”. In addition, Solana options held by a Solana employee, officer, director or consultant continuing with the combined company may be exchanged for options to purchase shares of Gran Tierra common stock; and holders of Solana warrants may elect to continue to hold warrants, which would be exercisable into shares of common stock of Gran Tierra pursuant to the terms of the warrants. 

What are the GTE–Solana Exchangeable Shares?

Each GTE–Solana Exchangeable Share has economic and voting rights equivalent to one share of Gran Tierra common stock. Holders of GTE–Solana Exchangeable Shares will be entitled to:

 
·
exchange their shares for Gran Tierra common stock on a one-for-one basis (GTE–Solana Exchangeable Shares will automatically be exchanged for Gran Tierra common stock five years from closing of the transaction, and in specified other events);

·
vote indirectly through a voting trust arrangement at meetings of Gran Tierra stockholders; and

·
receive dividends, if any, on the same basis as Gran Tierra stockholders.

Will the GTE–Solana Exchangeable Shares be listed on a stock exchange?

Yes. An application will be made to the Toronto Stock Exchange, or the “TSX”, to conditionally approve the listing of the GTE–Solana Exchangeable Shares, subject to Exchangeco fulfilling the listing requirements of the TSX. The GTE–Solana Exchangeable Shares will not be quoted on the American Stock Exchange, on the “AMEX”. Actions will be taken to de-list the Solana Shares from the TSX Venture Exchange and the Alternative Investment Market of the London Stock Exchange plc, or the “AIM”, effective upon completion of the Arrangement.

Why would I continue to hold GTE–Solana Exchangeable Shares?

The GTE–Solana Exchangeable Share structure will be implemented to provide tax deferral opportunities for Canadian resident Solana Shareholders that are not exempt from tax under Part I of the Income Tax Act (Canada) and, in the case of partnerships, are Canadian partnerships for purposes of the Income Tax Act (Canada). As long as the GTE–Solana Exchangeable Shares remain listed on a Canadian stock exchange, they will qualify as an investment that can be held by specified investment vehicles such as RRSPs, RRIFs, RESPs and other savings and pension plans.

5

 
How do I exchange my Solana security certificates?

Enclosed with this Joint Proxy Statement is a letter of transmittal that will allow you to receive your GTE–Solana Exchangeable Shares or Gran Tierra common stock, as applicable, which are issuable to you pursuant to this transaction. Letters of transmittal to allow Solana optionholders and warrantholders to make elections and receive the applicable cash payments or securities in respect of their Solana options and/or warrants will be delivered separately from the Joint Proxy Statement.
 
6



PROXY SUMMARY INFORMATION

The following is a summary of specified information contained elsewhere in this Joint Proxy Statement. The information contained in this summary is qualified in its entirety by and should be read in conjunction with the more detailed information contained in this Joint Proxy Statement, including the annexes hereto, and the documents incorporated by reference herein.

Overview of the Arrangement

The transaction will combine the businesses of Gran Tierra and Solana, which the companies believe complement each other, to create a more substantial South American oil and gas exploration and production company with significant oil reserves, production and land positions in Colombia. Importantly, it will provide for the consolidation of a 100% working interest in the Costayaco field, a major light oil discovery made in Colombia in 2007 currently undergoing delineation and development.

We will implement the transaction through a share exchange under a Plan of Arrangement. Upon completion of the Plan of Arrangement:

 
·
Solana will become an indirect wholly-owned subsidiary of Gran Tierra;

 
·
Solana Shareholders will cease to be shareholders of Solana and (other than Dissenting Shareholders) will receive, for each Solana Share held, either 0.9527918 of a share of Gran Tierra common stock or, if a Canadian resident that is not exempt from tax under Part I of the Income Tax Act (Canada) and, if a partnership, is a Canadian partnership for purposes of the Income Tax Act (Canada), 0.9527918 of a GTE–Solana Exchangeable Share;

 
·
each GTE–Solana Exchangeable Share will have economic and voting rights equivalent to one share of Gran Tierra common stock, will be exchangeable at the option of the holder for one share of Gran Tierra common stock, and will automatically be exchanged for Gran Tierra common stock five years from closing and in specified other events;

 
·
each Solana option will fully vest and terminate and the holder of such options will either receive Solana Shares or cash equal to the value of the Solana option or, if the holder will continue as an employee, officer, director or consultant of the combined company or a subsidiary of the combined company, the holder may convert such Solana option to an option to purchase Gran Tierra common stock, or any combination thereof; and

 
·
each holder of Solana warrants will either receive Solana Shares or cash equal to the value of the Solana warrant or, if the holder elects, such Solana warrants will become exercisable for Gran Tierra common stock under the terms of the warrants, or any combination thereof.

See “Description of the Arrangement – Transaction Mechanics and Description of GTE–Solana Exchangeable Shares” on page 59.

The Companies

Gran Tierra
(See page 96)

Gran Tierra is an independent international energy company involved in oil and natural gas exploration, development and production. Gran Tierra’s exploration, development and production operations are located in Colombia, Argentina and Peru. Gran Tierra made its initial acquisition of oil and gas producing and non-producing properties in Argentina in September 2005. During 2006, it acquired oil and gas producing and non-producing assets in Colombia, non-producing assets in Peru and additional properties in Argentina. Gran Tierra’s common stock is listed on the AMEX and the TSX, under the symbol “GTE”. Gran Tierra’s principal executive offices are located at 300, 611-10th Avenue S.W., Calgary, Alberta T2R 0B2, Canada, and its telephone number at its principal executive office is (403) 265-3221.

7



Solana
(See page 121)

Solana is a corporation incorporated and subsisting pursuant to the provisions of the Business Corporations Act (Alberta), the “ABCA”. Solana is an international resource company engaged in the acquisition, exploration, development and production of oil and natural gas. Solana is headquartered in Calgary, Alberta. Solana’s exploration and development properties are located in Colombia, South America and are held through its wholly-owned subsidiary, Solana Petroleum Exploration (Colombia) Limited incorporated in the Cayman Islands, or “Solana Colombia”. Solana currently holds various working interests in nine blocks in Colombia and Solana is the operator in respect of six of these blocks. Five of the blocks contain producing assets. Solana is a reporting issuer in the provinces of Alberta, British Columbia and Ontario and the Solana Shares are listed on the TSX Venture Exchange under the trading symbol “SOR” and on the AIM under the trading symbol “SORL”. Solana’s head office is located at Suite 100, 522 - 11 Avenue S.W., Calgary, Alberta T2R 0C8 and the registered office is located at 1000, 250 - 2 Street, S.W., Calgary, Alberta, T2P 0C1.

The Combined Company
(See page 83)

The combined company will be a more substantial independent oil and gas company with operations in South America. At December 31, 2007, Gran Tierra and Solana combined pro forma worldwide proved reserves, net of all royalties and third party interests, were approximately 14.8 million barrels of oil.

On a pro forma combined basis, assuming the consummation of the Arrangement, the combined company had:

·
2007 oil and natural gas liquids production, net of royalties, of 2,177 barrels per day;

·
first six months of 2008 oil and natural gas liquids production, net of royalties, of 5,763 barrels per day;

·
2007 year end total land holdings of 6.5 million acres;

·
2007 worldwide gas production of 994 thousand cubic feet per day; and

·
first six months of 2008 worldwide gas production of 44 thousand cubic feet per day.

In addition, in July 2008, Gran Tierra updated its proved reserves from the Costayaco field in Colombia at June 30, 2008, which were 6.67 million barrels of oil net of royalties compared to 3.27 million barrels of oil net of royalties at year end 2007, an increase of 104%.
 
Background of the Arrangement
(See page 39)

The respective boards of directors and management of Gran Tierra and Solana periodically review their strategic objectives with a view to ensuring that shareholder value is maximized. Each company frequently considers both acquisition and joint venture opportunities involving other participants in the oil and gas sector. Beginning in April of 2007, Gran Tierra and Solana engaged in preliminary discussions regarding a possible business combination of the two companies. However, in November 2007 the companies determined not to proceed, and terminated discussions regarding a potential combination of the two companies.
 
Beginning in May 2008, Gran Tierra and Solana again began discussions regarding a potential combination, which discussions resulted in the two companies engaging in extensive due diligence with respect to each other and, ultimately, the negotiation of the Arrangement Agreement, which was executed by Gran Tierra and Solana on July 28, 2008.
 
8



Reasons for the Arrangement
(see pages 43 and 45)

Gran Tierra: The Gran Tierra Board has unanimously approved the combination of Gran Tierra and Solana. In reaching this determination, the Gran Tierra Board consulted with Gran Tierra’s management, as well as its financial and legal advisors, and considered the following material factors:

· The anticipated business advantages of the combination, including:

 
·
Gran Tierra expects the combined company to have a larger asset base with a 100% working interest in the Costayaco field, one of the major oil discoveries in Colombia in recent years, allowing for more efficient development of the field;

·
Gran Tierra expects the combined company to have substantially increased cash flows and working capital which will allow for the pursuit of additional exploration opportunities on the combined company’s large undeveloped land base in Colombia, Argentina and Peru, and additional new venture growth opportunities;

 
·
Gran Tierra expects the combined company to have a larger market capitalization and better access to capital and financial markets, which would enable the combined company to raise additional capital more easily, if needed, to fund its expansion plans than either company could if not combined;

 
·
Gran Tierra expects the shares of the combined company to have greater public float and liquidity; and

 
·
Gran Tierra expects to achieve economies of scale and synergies by combining the two companies.

The Gran Tierra Board also considered the opinion of Blackmont Capital Inc., or “Blackmont”, financial advisor to Gran Tierra, delivered verbally on July 28, 2008 and subsequently confirmed in writing as of that date, to the effect that, based on and subject to the factors and assumptions set forth in the opinion, the Exchange Ratio of 0.9527918 shares of Gran Tierra common stock or GTE–Solana Exchangeable Shares, as applicable, for each Solana Share was fair, from a financial point of view, to Gran Tierra.

Solana: The Solana Board, has unanimously approved the combination of Gran Tierra and Solana. In reaching this determination, the Solana Board consulted with Solana’s management, as well as its financial and legal advisors, and considered the following material factors:

·
the consideration offered under the Arrangement represented a significant premium over the trading price of Solana Shares immediately prior to the announcement of the combination;

·
Solana believes that the combined company will have a larger asset base and greater geographical diversity of operations and markets. The combination creates a company with a 100% working interest in the Costayaco field, one of the most important oil discoveries in Colombia in recent years, allowing for more efficient development of the field;
 
·
Solana expects the combined company to have a larger market capitalization and better access to capital and financial markets, which would enable the combined company to raise additional capital more easily, if needed, to fund its expansion plans than either company could if not combined;

·
Solana expects the shares of the combined company to have greater public float and liquidity;

·
Solana expects the combined company to have substantially increased cash flows which will allow for the pursuit of additional exploration opportunities on the combined company’s large undeveloped land base in Colombia, Argentina and Peru, and additional new venture growth opportunities, thereby increasing the probability of additional exploration success;

9



·
the structure of the transaction provides a tax deferral opportunity for certain Canadian resident Solana Shareholders, but may be a taxable transaction for non-Canadian holders of Solana Shares;

·
Solana expects the combined company to benefit from the strong leadership of directors from both Solana and Gran Tierra; and

·
Solana warrantholders and some Solana optionholders can elect to participate in the combined company by ultimately receiving shares of Gran Tierra common stock or GTE–Solana Exchangeable Shares, as applicable, or can elect to receive a cash payment in exchange for their securities, or a combination of the foregoing, providing alternatives for such securityholders.

The Solana Board also considered the opinion of Tristone Capital Inc., or “Tristone”, financial advisor to Solana, delivered orally on July 28, 2008 and subsequently confirmed in writing as of that date, to the effect that, based on and subject to the factors and assumptions set forth in the opinion, the consideration to be received pursuant to the Arrangement by Solana Shareholders was fair, from a financial point of view, to Solana Shareholders.

Fairness Opinions of Financial Advisors
(see pages 45 and 53)

In deciding to approve the Arrangement, the board of directors of each of Gran Tierra and Solana considered the opinion of their respective financial advisor. Gran Tierra received an opinion from Blackmont delivered verbally on July 28, 2008 and subsequently confirmed in writing as of that date, to the effect that, based on and subject to the factors and assumptions set forth in the opinion, the Exchange Ratio was fair, from a financial point of view, to Gran Tierra. Solana received an opinion from Tristone, delivered orally on July 28, 2008 and subsequently confirmed in writing as of that date, that, based on and subject to the factors and assumptions set forth in the opinion, the consideration to be received pursuant to the Arrangement by Solana Shareholders was fair, from a financial point of view, to Solana Shareholders. These opinions are attached as Annexes H and I, respectively. We encourage you to read these opinions.

Recommendations of the Boards of Directors
(see page 45)

To Gran Tierra Stockholders:

The Gran Tierra Board believes that the Arrangement is fair to its stockholders and is in their best interest, and it unanimously recommends that its stockholders vote (1) “For” the issuance of Gran Tierra common stock pursuant to the Arrangement, (2) “For” the amendment of the Gran Tierra articles of incorporation to create a new share of special voting stock, referred to as the “Special B Voting Stock”, to represent the votes cast by the holders of GTE–Solana Exchangeable Shares, and make several technical amendments, (3) “For” the amendment of the Gran Tierra articles of incorporation to increase the number of shares of common stock authorized and change the board voting requirement for issuance of common stock, and (4) “For” the approval of the Gran Tierra 2007 Equity Incentive Plan, as amended and restated, to increase the number of shares issuable under the plan.

To Solana Securityholders:

The Solana Board, believes that the Arrangement is fair to the Solana Securityholders and in their best interest and unanimously recommends that the Solana Securityholders vote “For” the approval of the Arrangement.

What Solana Shareholders Will Receive Pursuant to the Arrangement
(see page 59)

Pursuant to the Arrangement, Solana Shareholders who are “eligible shareholders” (Canadian resident Solana Shareholders who are not exempt from Part I tax under the Income Tax Act (Canada) and, in the case of partnerships, are Canadian partnerships for purposes of the Income Tax Act (Canada)), other than Dissenting Shareholders, will receive 0.9527918 of a GTE–Solana Exchangeable Share for each Solana Share held by the shareholder immediately prior to the time at which the “Articles of Arrangement” are filed with the “Registrar”, each as defined in the Plan of Arrangement attached hereto as Annex D, on the date the Arrangement becomes effective under the ABCA, such time being referred to herein as the “Effective Time”.

10



Pursuant to the Arrangement, Solana Shareholders who are “ineligible shareholders” (Solana Shareholders that are not eligible shareholders), other than Dissenting Shareholders, will receive 0.9527918 of a Gran Tierra common share for each Solana Share held by such shareholder immediately before the Effective Time.

Each GTE–Solana Exchangeable Share (i) will have voting rights, dividend entitlements and other attributes equivalent to one share of Gran Tierra common stock; (ii) will be exchangeable, at each shareholder's option, on a one-for-one basis, into shares of Gran Tierra common stock; and (iii) subject to compliance with the listing requirements of the TSX, will be listed on the TSX. The GTE–Solana Exchangeable Shares will automatically be exchanged for shares of Gran Tierra common stock five years from the effective date of the Arrangement under the ABCA, or “Effective Date”, and in specified other events.

What Solana Optionholders Will Receive Pursuant to the Arrangement
(see page 71)

Subject to the rights of Continuing Optionholders discussed below, Solana optionholders will receive one or any combination of the following:

 
·
if the Solana optionholder elects to receive Solana Shares pursuant to the cashless exercise of its Solana options, referred to as the “Exchange Options”, each such Exchange Option will be deemed to be surrendered to Solana by cashless exercise in exchange for such number of Solana Shares as is equal to the “in-the-money value” of each Exchange Option divided by the five day weighted trading price (ending on the seventh trading day before the Effective Date) on the TSX of a share of Gran Tierra common stock multiplied by 0.9527918 and these Solana Shares will then be exchanged for shares of Gran Tierra common stock or GTE–Solana Exchangeable Shares pursuant to the Arrangement (where the “in-the-money value” of each Exchange Option is equal to the amount by which the Imputed Transaction Value exceeds the exercise price of such Exchange Option; and where “Imputed Transaction Value” is the five day weighted trading price, ending on the seventh trading day before the Effective Date, on the TSX of a share of Gran Tierra common stock multiplied by 0.9527918); or

 
·
if the Solana optionholder elects to receive a cash payment pursuant to the cashless exercise of its Solana options, each such Solana option will be deemed to be surrendered to Solana by cashless exercise in exchange for the “in-the-money value” of each Solana option (where the “in-the-money value” of each Solana option is equal to the amount by which the Imputed Transaction Value exceeds the exercise price of such Solana option).

In addition, Solana optionholders who are “Continuing Optionholders” (Solana optionholders who will be any of a director, officer, employee or consultant of Gran Tierra or a subsidiary of Gran Tierra immediately subsequent to the Effective Time) may elect to exchange some or all of their Solana options for 0.9527918 of a Gran Tierra option. The exercise price of such Gran Tierra Options will be adjusted as set forth in the Plan of Arrangement.

What Solana Warrantholders Will Receive Pursuant to the Arrangement
(see page 72)

Pursuant to the Arrangement, if Solana warrantholders elect to effect a cashless exercise of their Solana warrants, the Solana warrantholders will receive one or any combination of the following:
 
 
·
if the Solana warrantholder elects to receive Solana Shares pursuant to the cashless exercise of its Solana warrants, referred to as the “Exchange Warrants”, each such Exchange Warrant will be deemed to be surrendered to Solana by cashless exercise in exchange for such number of Solana Shares as is equal to the “in-the-money value” of each Exchange Warrant divided by the five day weighted trading price (ending on the seventh trading day before the Effective Date) on the TSX of a share of Gran Tierra common stock multiplied by 0.9527918 and these Solana Shares will then be exchanged for shares of Gran Tierra common stock or GTE–Solana Exchangeable Shares pursuant to the Arrangement (where the “in-the-money value” of each Exchange Warrant is equal to the amount by which the Imputed Transaction Value exceeds CDN$2.00); or


11



 
·
if the Solana warrantholder elects to receive a cash payment pursuant to the cashless exercise of its Solana warrants, each such Solana warrant will be deemed to be surrendered to Solana by cashless exercise in exchange for the “in-the-money value” of each Solana warrant (where the “in-the-money value” of each Solana warrant is equal to the amount by which the Imputed Transaction Value exceeds CDN$2.00).

If Solana warrantholders do not elect to effect a cashless exercise of all of their Solana warrants, they will continue to hold such Solana warrants, which would be exercisable into shares of Gran Tierra common stock in accordance with the terms and conditions of such Solana warrants.

Colombian Participation Agreement
(see page 97)

Gran Tierra is party to a Colombian Participation Agreement, dated June 22, 2006, between Argosy Energy International, Gran Tierra Energy Inc. and Crosby Capital, LLC, as amended, the “Colombian Participation Agreement”, entered into in connection with Gran Tierra’s original acquisition of its interests in Colombia, pursuant to which Gran Tierra is obligated to pay specified amounts based on production from the properties acquired. In July 2008, Gran Tierra negotiated an amendment to the Colombian Participation Agreement to provide that, in the event that the Arrangement is consummated, Gran Tierra will issue two million shares of Gran Tierra common stock to the holders of the rights to receive payments under that agreement, in consideration for the holders agreeing that their rights to receive payments on production from the properties Gran Tierra acquired would not apply to Solana’s interests in the properties in which Solana and Gran Tierra have joint working interests, even after the combination of the two companies. In the event that combination of Gran Tierra and Solana does not occur, then Gran Tierra would not be obligated to issue the two million shares, and the rights of the royalty holders under the Colombian Participation Agreement would not be affected.

Comparative Per Share Market Price Data
(see page 84)

Gran Tierra common stock was first cleared for quotation on the OTC Bulletin Board, or the “OTCBB”, on November 11, 2005 and traded on the OTCBB from that time until April 8, 2008, under the symbol “GTRE.OB”. On February 19, 2008, Gran Tierra common stock was listed on the TSX, and is trading under the symbol “GTE” on the TSX. On April 8, 2008, Gran Tierra common stock was listed on the AMEX, and is trading under the symbol “GTE” on the AMEX. Upon listing on the AMEX, Gran Tierra’s common stock ceased trading on the OTCBB.

Solana Shares are listed on the TSX Venture Exchange, under the symbol “SOR” and on the AIM, under the symbol “SORL”.

On July 28, 2008, the last full trading day for each of Gran Tierra and Solana before the public announcement of the Arrangement, Gran Tierra common stock closed at CDN$5.73 on the TSX and $5.57 on the AMEX and Solana Shares closed at CDN$4.35 on the TSX Venture Exchange and £2.13 on the AIM.

Listing of Gran Tierra Common Stock and GTE–Solana Exchangeable Shares
(see page 77)

It is a mutual condition to the completion of the Arrangement that (i) the TSX shall have conditionally approved the listing of the shares of Gran Tierra common stock to be issued pursuant to the Arrangement, and (ii) the AMEX shall have conditionally approved the listing of the shares of Gran Tierra common stock to be issued pursuant to the Arrangement, subject to official notice of issuance.

12



Exchangeco will apply to the TSX for conditional approval to list the GTE–Solana Exchangeable Shares, subject to Exchangeco meeting the listing requirements of the TSX.

Who Is Entitled to Vote at the Meetings

Gran Tierra Stockholders
(see page 30)

Only stockholders of record at the close of business on September 15, 2008, the “Gran Tierra Record Date”, will be entitled to vote at the Gran Tierra Special Meeting. On the Gran Tierra Record Date, there were ● shares of Gran Tierra common stock outstanding and entitled to vote, and one share of special voting stock, or “Special Voting Stock”. On the record date, the share of Special Voting Stock was entitled to ● votes, which equals the number of shares of common stock issuable upon exchange of the GTE–Goldstrike Exchangeable Shares, outstanding as of the Gran Tierra Record Date, that were issued in connection with the transaction between the former shareholders of Gran Tierra Energy Inc., a privately-held Alberta corporation, referred to as “Gran Tierra Canada”, and Gran Tierra Goldstrike, Inc.

Solana Shareholders
(see page 37)

Only Solana Securityholders of record at the close of business on September 25, 2008, the “Solana Record Date”, will be entitled to receive notice of, and attend and vote at, the Solana Special Meeting, except to the extent a holder of Solana Shares transfers any of such securities after the Solana Record Date and the transferee of those Solana Shares establishes ownership of the Solana Shares, and demands, not later than 10 days before the Solana Special Meeting, that the transferee’s name be included in the list of holders of Solana Shares entitled to vote, in which case such transferee shall be entitled to vote such Solana Shares at the Solana Special Meeting. As at the Solana Record Date, a total of ● Solana Shares, ● Solana options and 7,500,000 Solana warrants were issued and outstanding for a total of ● Solana securities being issued and outstanding. Each Solana Securityholder is entitled to one vote for each Solana security held and the Solana Securityholders will vote as one class.
 
Shareholder Votes Required

Gran Tierra Proposals
(see page 33)

Each share of Gran Tierra common stock and GTE–Goldstrike Exchangeable Share has one vote. The votes required to approve the Gran Tierra proposals are as follows:

 
·
to be approved, Proposal 1, the approval of issuance of Gran Tierra common stock pursuant to the Arrangement, must receive the affirmative vote of a majority of the shares present in person or represented by proxy at the Gran Tierra Special Meeting and entitled to vote. Broker non-votes will have no effect and abstentions will have the same effect as “Against” votes;
 
 
·
to be approved, Proposal 2, the amendment to Gran Tierra’s articles of incorporation to create a new special voting share to enable the GTE–Solana Exchangeable Shares to vote, as well as to make several technical changes, must receive a “For” vote from:
 
 
·
the holders of shares of Gran Tierra common stock and GTE–Goldstrike Exchangeable Shares entitling them to exercise at least a majority of the combined voting power of the total number of outstanding shares of Gran Tierra common stock and GTE–Goldstrike Exchangeable Shares; and
 
 
·
the holders of shares of GTE–Goldstrike Exchangeable Shares entitling them to exercise at least a majority of the voting power of the total number of outstanding shares of GTE–Goldstrike Exchangeable Shares.
 
Broker non-votes and abstentions will have the same effect as “Against” votes;
 
13


 
 
·
to be approved, Proposal 3, the increase in the number of shares of Gran Tierra common stock authorized for issuance and change the board voting requirement for issuance of common stock, must receive a “For” vote from the holders of shares of Gran Tierra common stock and GTE–Goldstrike Exchangeable Shares entitling them to exercise at least a majority of the combined voting power of the total number of outstanding shares of Gran Tierra common stock and GTE–Goldstrike Exchangeable Shares. Broker non-votes and abstentions will have the same effect as “Against” votes; and
 
 
·
to be approved, Proposal 4, the approval of Gran Tierra’s 2007 Equity Incentive Plan, as amended and restated, must receive the affirmative vote of a majority of the shares present in person or represented by proxy at the Gran Tierra Special Meeting and entitled to vote. Broker non-votes will have no effect and abstentions will have the same effect as “Against” votes.
 
References to voting power of GTE–Goldstrike Exchangeable Shares refers to the voting power exercised through the Olympia Trust Company, referred to as the “Goldstrike Trustee”, with respect to the GTE–Goldstrike Exchangeable Shares, whether by the Goldstrike Trustee or by proxy.
 
Solana Proposal
(see page 37)

The approval of the Arrangement requires approval by two-thirds of the votes cast in person or by proxy at the Solana Special Meeting.

Dissenters’ Rights
(see page 79)

Pursuant to the Interim Order of the Court under subsection 193(4) of the ABCA, or the “Interim Order”, registered holders of Solana Shares are, subject to the provisions of the Interim Order and the Arrangement Agreement, accorded the right of dissent, or “Dissent Rights”, under Section 191 of the ABCA with respect to the approval of the special resolution to approve the Arrangement under the ABCA, the “Arrangement Resolution. A Dissenting Shareholder may exercise such Dissent Rights by providing a written objection to the Arrangement Resolution to Solana c/o Davis LLP, Livingston Place 1000 - 250 2nd St SW Calgary, AB, Canada T2P 0C1, Attention: Kenneth P. Reh, by 4:00 p.m. on the fifth business day immediately preceding the date of the Solana Special Meeting; provided that the Dissenting Shareholder has not voted his or her Solana Shares at the Solana Special Meeting, either by proxy or in person, in favor of the Arrangement Resolution, the dissenting Solana Shareholder exercises the Dissent Rights in respect of all of the Solana Shares held by such Solana Shareholder, and such holder also complies with Section 191 of the ABCA, as modified by the Interim Order, such Dissenting Shareholder referred to herein as a “Dissenting Shareholder”.

The statutory provisions covering the right to dissent are technical and complex. Failure to strictly comply with the requirements set forth in Section 191 of the ABCA, as modified by the Interim Order, may result in the loss of any right to dissent. Persons who are beneficial owners of Solana Shares registered in the name of a broker, custodian, nominee or other intermediary who wish to dissent, should be aware that only the registered holder is entitled to dissent. Accordingly, a beneficial owner of Solana Shares desiring to exercise the right to dissent must make arrangements for such Solana Shares beneficially owned to be registered in such holder's name prior to the time the written objection to the Arrangement Resolution approving the Arrangement is required to be received by Solana, as the case may be, or alternatively, make arrangements for the registered holder of such Solana Shares to dissent on such holder's behalf. Pursuant to the Interim Order, a Solana Shareholder may not exercise their Dissent Rights in respect of only a portion of such holder's Solana Shares. See "Description of the Arrangement – Dissenting Shareholders' Rights".

Interests of Solana Directors and Officers
(see page 81)

When considering the recommendation of the Solana Board with respect to the Arrangement, Solana Securityholders should be aware that a number of Solana directors and officers have interests in the transaction that may differ from those of Solana Securityholders generally.

14



Accounting Treatment

The acquisition of the Solana Securities pursuant to the Plan of Arrangement will be accounted for by Gran Tierra using the purchase method under U.S. GAAP. Under the purchase method, the cost of the purchase will be based on the market value of the Gran Tierra securities issued and the direct transaction costs.  The cost of the purchase will be allocated to the Solana assets acquired and liabilities assumed, based on their estimated fair values at the acquisition date, with any excess of the cost over the amounts allocated being recognized as goodwill.  Financial statements of Gran Tierra issued after the acquisition would reflect these fair values and include Solana’s results of operations from the date of acquisition; they would not be restated retroactively to reflect to the historical financial position or results of operations of Solana.  This method may result in the carrying value of net assets, including goodwill, acquired from Solana being substantially different from the former carrying values of those net assets in Solana’s historical financial statements.

Regulatory Approvals
(see page 78)

In addition to the approval of Solana Securityholders, Gran Tierra stockholders and the Court, it is a mutual condition precedent to the implementation of the Arrangement that all requisite regulatory approvals be obtained. See "Description of the Arrangement - Regulatory Matters".

The obligations of the parties to complete the Arrangement are subject to the approval by the antitrust authority of Colombia, the Superintendency of Industry and Commerce, or the "SIC," pursuant to the Colombian merger control regime. By law, Gran Tierra and Solana shall file a notice before the SIC in order to obtain such approval. Once such notice is filed, the SIC has a period of thirty (30) business days to review the filing and issue a decision.  If within this thirty (30) business day period the SIC requests from any of the parties to the transaction additional information regarding the filing, this period will commence again from the date of the answer to such request.  If the SIC does not issue a decision within the thirty (30) business days counted as of the date the notification was filed or the date of the response to the request for additional information, the transaction shall be deemed approved.
 
On August 27, 2008 Gran Tierra and Solana filed a request to obtain the necessary authorization to complete the Arrangement before the SIC.
 
We do not expect that any of the abovementioned regulatory approvals, filings or any other required regulatory filings, will delay consummation of the Arrangement.  

Conditions to the Completion of the Arrangement
(see page 73)

The completion of the Arrangement depends upon the satisfaction of a number of conditions, including:

· the receipt of the Interim Order of the Court;

· the approval of the Arrangement by the Solana Securityholders;

· the approval of the issuance of Gran Tierra common stock by Gran Tierra stockholders;

· the absence of any action, suit, proceeding, or objection threatening, or any law or court order prohibiting the Arrangement;

· the receipt of a final order of the Court approving the Arrangement pursuant to subsection 193(9) of the ABCA, or the “Final Order”;

· the receipt of all required consents and regulatory approvals;

· the receipt of the approval to list the Gran Tierra common stock on the TSX and the AMEX;
 
15


 
· a registration statement on Form S-3 filed by Gran Tierra having been declared effective;

· the Articles of Arrangement having been filed with the registrar;

· the Arrangement becoming effective by November 15, 2008;

· if required, the approval of the Arrangement by Gran Tierra’s and Solana’s lenders;

· the furnishing of board and stockholder resolutions approving the Arrangement by both sides;

· the representations and warranties of the parties set out in the Arrangement Agreement being materially accurate as of the closing of the Arrangement;

· the absence of any material adverse change in the business, operations, assets, capitalization, financial condition or prospects of either party;

· performance by the parties of their pre-closing obligations under the Arrangement Agreement;

· Solana and Gran Tierra having no debt;

· all outstanding debt owed to Solana by any Solana director or officer being repaid in full;

· Solana’s employment related obligations not exceeding $1.5 million and Solana’s expenses related to the Arrangement not exceeding $5 million;

· receipt by Gran Tierra of resignations and releases from Solana’s directors and officers; and

· receipt by Gran Tierra of non-solicitation agreements from specified officers of Solana.

Each party has the right to waive the conditions (except for the requisite shareholder and regulatory approvals) to its obligations under the Arrangement Agreement.

Termination of the Arrangement Agreement
(see page 75)

Either Gran Tierra or Solana may terminate the Arrangement Agreement if any of the following occurs:

· there has been a material breach of the representations and warranties of the other party, by the other party;

· all closing conditions have not been satisfied or waived on or before November 15, 2008;

· the required approvals of holders of Gran Tierra common stock or Solana Securityholders are not obtained at the respective meetings; or

· a law or court order prohibits the Arrangement.

Gran Tierra can also terminate the Arrangement Agreement if the Solana Board withdraws or modifies its recommendation adversely to Gran Tierra or fails to reaffirm its recommendation upon request by Gran Tierra or after an alternative acquisition proposal meeting specified requirements is announced.

Solana can also terminate the Arrangement Agreement if any of the following occurs:

· the Gran Tierra Board withdraws or modifies adversely to Solana its recommendation; or
 
16



· the Solana Board accepts, recommends, approves or implements a proposal superior to this transaction in compliance with the terms of the Arrangement Agreement, a “Solana Superior Proposal”.

Termination Fees
(see page 76)

Solana must reimburse Gran Tierra’s transaction costs in cash up to $1.5 million if Gran Tierra terminates the Arrangement Agreement because of a material breach by Solana of its representations and warranties.

Solana must pay Gran Tierra a termination fee of $21 million in cash if:

· Gran Tierra terminates the Arrangement Agreement because the Solana Board withdraws or modifies adversely its recommendation or fails to reaffirm its recommendation when requested by Gran Tierra to do so or after an alternative acquisition proposal meeting specified requirements is announced; or

· Solana terminates the Arrangement Agreement in order to accept a superior proposal permitted under the Arrangement Agreement.

Gran Tierra must reimburse Solana’s transaction costs in cash up to $1.5 million if Solana terminates the Arrangement Agreement because of a material breach by Gran Tierra of its representations and warranties.

Gran Tierra must pay Solana a termination fee of $21 million in cash if Solana terminates the Arrangement Agreement because the Gran Tierra Board withdraws or modifies its recommendation adversely to Solana.

If either party fails to pay the above fees promptly, then it shall also pay the other party’s costs in recovering those fees in addition to interest on the unpaid amount at the prime rate of the Canadian Imperial Bank of Commerce.

No Solicitation of Competing Proposals
(see page 74)

Solana may not solicit or encourage any alternative acquisition proposals. However, if a superior, unsolicited proposal is made by a third party, the Solana Board may enter into discussions and negotiations with, and provide information to, the party making the acquisition proposal in order to satisfy its fiduciary duties. Gran Tierra has the right to match any such superior proposal made to Solana.

The Transaction Documents

We have included the Arrangement Agreement and the Plan of Arrangement as Annexes B and D, respectively, to this Joint Proxy Statement. We encourage you to read these agreements as they are the principal legal documents that govern the Arrangement.

Tax Consequences of the Arrangement

Canadian Resident Holders
(see page 151)

The transaction structure provides tax-deferral opportunities in Canada for Canadian resident Solana Shareholders that are not exempt from Part I tax under the Income Tax Act (Canada) and, in the case of partnerships, are Canadian partnerships for the purposes of the Income Tax Act (Canada), through the exchange of such Solana Shares for GTE–Solana Exchangeable Shares. This tax-deferral benefit may continue as long as such holders continue to hold the GTE–Solana Exchangeable Shares and for so long as Exchangeco has not exercised its automatic redemption right, which right cannot (subject to specified limited exceptions) be exercised by Exchangeco prior to the five year anniversary of the Arrangement.
 
17



Holders of Solana Shares who are not resident in Canada for purposes of the Income Tax Act (Canada) will generally not be taxed in Canada with respect to the exchange of such shares for shares of Gran Tierra common stock under the Arrangement, provided that Solana Shares do not constitute "taxable Canadian property" to such holders.

U.S. Resident Holders
(see page 160)

It is not clear whether a U.S. Solana Shareholder, as defined below in the section entitled Material U.S. Federal Income Tax Consequences of the Arrangement on page 160, that exchanges Solana Shares for shares of Gran Tierra common stock must recognize a gain or loss on the exchange. Provided specified conditions are satisfied, Gran Tierra intends to take the position that the Arrangement qualifies as a reorganization. Generally, if the Arrangement qualifies as a reorganization no gain or loss would be recognized by a U.S. Solana Shareholder on the exchange of Solana Shares for shares of Gran Tierra common stock. If the Arrangement does not qualify as a reorganization, gain or loss will be recognized on the exchange. The amount of the gain or loss recognized would equal the difference between the fair market value of the Gran Tierra common stock received in the exchange at the date of such exchange and the U.S. Solana Shareholder’s tax basis in the Solana Shares surrendered. The gain or loss recognized would be a capital gain or loss if the Solana Shares were held as a capital asset at the time of the exchange. Provided the Solana Shares were held for more than one year at the time of their exchange, gain recognized would qualify for taxation at preferential long-term capital gain rates. The recognition and the deduction of capital losses are subject to limitations. The tax consequences of the exchange may be significantly altered if Solana was a passive foreign investment company at anytime when the U.S. Solana Shareholder held the Solana Shares surrendered in the exchange. U.S. Solana Shareholders in special circumstances, such as those receiving GTE-Solana Exchangeable Shares for their Solana Shares, should consult their tax advisors to determine the tax consequences of the transaction to them.

For a description of the material federal income tax consequences of the Arrangement, see “Material U.S. Federal Income Tax Consequences of the Arrangement”.

Risk Factors
(see page 23)

As in any significant business combination transaction, there are a number of risk factors to consider in connection with the Arrangement that are described in the section of this Joint Proxy Statement entitled "Risk Factors" beginning on page 23, or incorporated by reference herein as described in the sections entitled “Documents Incorporated By Reference” beginning on page 139 and on page 218. Securityholders should carefully consider all such risk factors in evaluating whether to approve the Arrangement, in the case of Solana Securityholders, and whether to approve the Gran Tierra proposals as described above, in the case of Gran Tierra stockholders.

Summary Pro Forma and Historical Financial Data
(see pages 87 and 98)

Summary Unaudited Pro Forma Combined Financial Data

The following tables set forth certain selected pro forma consolidated financial information. Such information should be read in conjunction with the unaudited pro forma consolidated financial statements of Gran Tierra after giving effect to the Arrangement for the six months ended June 30, 2008 and as at and for the year ended December 31, 2007 beginning on page 179 in this Joint Proxy Statement.

The pro forma adjustments are based upon the assumptions described in the notes to the unaudited pro forma consolidated financial statements. The pro forma consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating or financial results that would have occurred had the Arrangement actually occurred at the times contemplated by the notes to the unaudited pro forma consolidated financial statements or of the results expected in future periods.

18



(dollars in thousands except per share amounts)
 
Year Ended
December 31, 2007
 
Six Months Ended
June 30, 2008
 
Statement of Operations Data
         
Revenues and other income
         
Oil and natural gas sales
 
$
50,147
 
$
101,731
 
Interest
   
1,516
   
1,172
 
               
Total revenues
   
51,663
   
102,903
 
               
Expenses
             
Operating
   
14,418
   
12,049
 
Depletion, depreciation and accretion
   
29,991
   
40,695
 
General and administrative
   
29,001
   
15,321
 
Liquidated damages
   
7,367
   
-
 
Derivative financial instruments
   
3,040
   
7,462
 
Foreign exchange loss
   
18,872
   
10,562
 
               
Total expenses
   
102,689
   
86,089
 
               
Income (loss) before income tax
   
(51,026
)
 
16,814
 
Income tax
   
5,051
   
(8,576
               
Net income (loss)
 
$
(45,975
)
$
(8,238
               
Net income (loss) per common share — basic
 
$
(0.21
)
$
0.04
 
Net income (loss) per common share — diluted
 
$
(0.21
)
$
0.03
 
               
Balance Sheet Data
             
Cash and cash equivalents
       
$
96,328
 
               
Working capital (including cash)
         
68,457
 
Oil and gas properties
         
873,595
 
Deferred tax asset - long term
         
684
 
Total assets
         
1,060,137
 
Deferred tax liability - long term
         
215,510
 
Other long-term liabilities
         
7,329
 
Shareholders’ equity
       
$
740,208
 

Summary Historical Consolidated Financial Data of Gran Tierra Under U.S. GAAP

The following table sets forth summary historical consolidated financial data for Gran Tierra as of and for each of the three years ended December 31, 2007 and as of and for the six months ended June 30, 2008 and 2007. The summary historical consolidated financial data has been presented in U.S. dollars under U.S. GAAP

The data set forth below should be read in conjunction with the consolidated financial statements and related notes incorporated by reference in this Joint Proxy Statement.
 
19



(dollars in thousands, except per share amounts)
 
 Year Ended December 31,
 
Six Months
Ended June 30,
 
 
 
2007
 
2006
 
2005
 
2008
 
2007
 
Statement of Operations Data
                     
Revenues and other income
                     
Oil and natural gas sales
 
$
31,853
 
$
11,721
 
$
1,059
 
$
53,791
 
$
7,935
 
Interest
   
425
   
352
   
   
172
   
332
 
Total revenues
   
32,278
   
12,073
   
1,059
   
53,963
   
8,267
 
                                 
Expenses
                         
Operating
   
10,474
   
4,233
   
395
   
6,253
   
4,106
 
Depletion, depreciation and accretion
   
9,415
   
4,088
   
462
   
8,464
   
4,701
 
General and administrative
   
10,232
   
6,999
   
2,482
   
8,774
   
4,619
 
Liquidated damages
   
7,367
   
1,528
   
   
   
7,367
 
Derivative financial instruments
   
3,040
   
   
   
7,462
   
677
 
Foreign exchange (gain) loss
   
(77
)
 
371
   
(31
)
 
(383
)
 
(7
)
Total expenses
   
40,451
   
17,219
   
3,308
   
30,570
   
21,463
 
                                 
Income (loss) before income tax
   
(8,173
)
 
(5,146
)
 
(2,249
)
 
23,393
   
(13,196
)
Income tax
   
(294
)
 
(678
)
 
29
   
(10,191
)
 
1,474
 
                                 
Net Income (loss)
 
$
(8,467
)
$
(5,824
)
$
(2,220
)
$
13,202
 
$
(11,722
)
Net income (loss) per common share — basic
 
$
(0.09
)
$
(0.08
)
$
(0.16
)
$
0.13
 
$
(0.12
)
Net income (loss) per common share — diluted
 
$
(0.09
)
$
(0.08
)
$
(0.16
)
$
0.11
 
$
(0.12
)
 
   
Year Ended December 31,
 
Six Months
Ended June 30,
 
Statement of Cash Flows Data
 
2007 (As
Restated) (1)
 
2006 (As
Restated)
(1)
 
2005
 
2008
 
2007
 
Operating activities
 
$
8,762
 
$
2,010
 
$
(1,877
)
$
12,422
 
$
(3,689
)
Investing activities
   
(15,393
)
 
(48,207
)
 
(9,108
)
 
(11,764
)
 
(10,569
)
Financing activities
   
719
   
68,076
   
13,206
   
16,456
   
 
                                 
(Decrease) Increase in cash
 
$
(5,912
)
$
21,879
 
$
2,221
 
$
17,114
 
$
(14,258
)
 
   
At December 31,
 
At June 30,
 
   
2007
 
2006
 
2005
 
2008
 
2007
 
Balance Sheet Data
                         
Cash and cash equivalents
 
$
18,189
 
$
24,101
 
$
2,221
 
$
35,303
 
$
9,842
 
Working capital (including cash)
   
8,058
   
14,541
   
2,765
   
31,699
   
7,154
 
Oil and gas properties
   
63,202
   
56,093
   
7,887
   
71,771
   
60,715
 
Deferred tax asset
   
2,058
   
444
   
   
1,832
   
496
 
Total assets
   
112,797
   
105,537
   
12,371
   
167,607
   
98,764
 
Deferred tax liability
   
(11,675
)
 
(9,876
)
 
   
(10,582
)
 
(11,373
)
Other long-term liabilities
   
(1,986
)
 
(634
)
 
(68
)
 
(3,932
)
 
(2,037
)
Shareholders’ equity
 
$
(76,792
)
$
(76,195
)
$
(11,039
)
$
(107,578
)
$
(72,203
)

(1)
As discussed in Note 13 to Gran Tierra’s December 31, 2007 consolidated financial statements, cashflows from operating activities and cash flows from investing activities have been restated as a result of a misclassification of accounts payable and accrued liabilities between the two categories.

20



Summary Historical Consolidated Financial Data of Solana Under Canadian GAAP

The following table sets forth summary historical consolidated financial data for Solana as of and for each of the preceding five years ended December 31, 2007 and as of and for the six months ended June 30, 2007 and 2008. The summary historical consolidated financial data have been presented in U.S. dollars and under Canadian GAAP.

The data set forth below has been derived from, and should be read in conjunction with, the associated consolidated financial statements and related notes as filed on SEDAR.

   
Year Ended December 31,
 
Period Ended June 30,
 
   
2003
 
2004
 
2005
 
2006
 
2007
 
2007
 
2008
 
Statement of Operations Data
                             
Revenues and other income
                             
Oil sales
 
$ 
 
$
 
$
6,010,571
 
$
8,561,235
 
$
17,441,340
 
$
2,383,884
 
$
47,921,945
 
Natural gas sales
   
   
350,864
   
749,930
   
919,676
   
853,049
   
417,584
   
18,403
 
Interest
   
2,468
   
132,892
   
714,397
   
1,531,032
   
1,091,321
   
470,399
   
999,774
 
                                             
Total revenues
   
2,468
   
483,756
   
7,474,898
   
11,011,943
   
19,385,710
   
3,271,867
   
48,940,122
 
                                             
Expenses
                                           
Operating
   
-
   
394,327
   
1,454,204
   
3,123,305
   
3,944,131
   
1,474,253
   
6,051,140
 
                                             
Depletion, impairment, depreciation and accretion
   
274,626
   
1,246,080
   
4,809,927
   
35,163,420
   
5,789,093
   
2,212,543
   
6,478,965
 
                                             
General and administrative
   
121,946
   
964,060
   
2,849,913
   
4,602,952
   
5,129,153
   
2,380,267
   
2,811,552
 
                                             
Stock -based compensation
   
-
   
938,946
   
1,801,780
   
3,029,830
   
13,640,012
   
2,825,074
   
3,480,991
 
Foreign exchange (gain) loss
   
39,255
   
428,204
   
(203,808
)
 
(2,145,686
)
 
77,290
   
224,888
   
(248,301
)
                                             
Total expenses
   
435,827
   
3,971,617
   
10,712,016
   
43,773,821
   
28,579,679
   
9,177,425
   
18,574,347
 
                                             
Loss before income tax
   
(433,359
)
 
(3,487,861
)
 
(3,237,118
)
 
(32,761,878
)
 
(9,193,969
)
 
(5,845,558
)
 
30,365,775
 
Income tax expense (recovery)
   
   
153,238
   
213,552
   
(5,153,272
)
 
89,257
   
89,257
   
3,119,646
 
Net loss
 
$
(433,358
)
$
(3,641,099
)
$
(3,450,670
)
$
(27,608,606
)
$
(9,283,226
)
$
(5,934,815
)
$
27,246,129
 
                                             
Net loss per common share — basic
 
$
(0.02
)
$
(0.05
)
$
(0.05
)
$
(0.34
)
$
(0.09
)
$
(0.06
)
$
0.21
 
Net loss per common share — diluted
  $ (0.02 ) (0.05 ) $ (0.05 $ (0.34 ) $ (0.09 ) $ (0.06 ) $ 0.22  
                                             
Statement of Cash Flows Data
                                           
Operating activities
 
$ 
(102,014
)
$ 
2,514,525
 
$
5,453,812
 
$
7,114,937
 
$
12,893,927
 
$
(1,484,716
)
$
23,680,156
 
Investing activities
   
(246,536
)
 
(14,855,544
)
 
(32,184,351
)
 
(29,112,940
)
 
(31,908,116
)
 
(12,595,370
)
 
(28,076,989
)
Financing activities
   
2,975,856
   
54,473,335
   
1,068,660
   
34,428,044
   
57,348,910
   
23,711
   
6,259,129
 
Foreign exchange gain (loss)
   
   
169,776
   
270,000
   
(300,000
)
 
19,676
   
58,156
   
1,644
 
                                             
(Decrease) Increase in cash
 
$
2,627,306
 
$ 
42,302,092
 
$
(25,391,879
)
$
12,130,041
 
$
38,354,397
 
$
(13,998,219
)
$
1,863,940
 
 
   
At December 31,
 
At June 30,
 
   
2003
 
2004
 
2005
 
2006
 
2007
 
2007
 
2008
 
Balance Sheet Data
                             
Cash and cash equivalents
 
$
2,209,868
 
$ 
45,780,741
 
$
20,660,693
 
$
29,909,168
 
$
71,537,827
 
$
18,158,274
 
$
73,401,767
 
                                             
Working capital (including cash)
   
2,168,827
   
48,750,038
   
24,407,788
   
37,106,929
   
70,974,442
   
18,039,837
   
88,303,377
 
Oil and gas properties
   
2,566,986
   
37,638,845
   
63,142,705
   
54,313,189
   
81,963,075
   
70,078,418
   
102,929,728
 
Deferred tax asset
   
   
   
   
   
   
   
4,000,375
 
Total assets
   
5,550,076
   
89,052,743
   
95,897,095
   
98,615,541
   
166,641,302
   
97,884,761
   
211,120,142
 
Deferred tax liability
   
   
5,067,880
   
5,231,970
   
   
   
   
 
Other long-term liabilities
   
   
351,452
   
536,547
   
1,556,823
   
1,973,938
   
7,350,731
   
2,134,858
 
Shareholders’ equity
 
$
5,489,373
 
$
81,984,051
 
$
84,180,499
 
$
93,654,111
 
$
155,359,807
 
$
90,534,030
 
$
192,346,056
 
 
21



Summary Historical Consolidated Financial Data of Solana Under U.S. GAAP

The following table sets forth summary historical consolidated financial data for Solana as of and for each of the two years ended December 31, 2007. The summary historical consolidated financial data have been presented in U.S. dollars and adjusted to U.S. GAAP.

The data set forth below has been derived from, and should be read in conjunction with, the consolidated financial statements and related notes thereto after applying the appropriate adjustments to US GAAP, as included in Note 20 to the consolidated financial statements included at page 201 of this Joint Proxy Statement.

   
Year Ended December 31,
 
   
2006
 
2007
 
Statement of Operations Data
         
Revenues and other income
         
Oil sales
 
$
8,561,235
 
$
17,441,340
 
Natural gas sales
   
919,676
   
853,049
 
Interest
   
1,531,032
   
1,091,321
 
               
Total revenues
   
11,011,943
   
19,385,710
 
               
Expenses
             
Operating
   
3,123,305
   
3,944,131
 
Depletion, impairment, depreciation and accretion
   
43,078,099
   
4,593,556
 
General and administrative
   
4,602,952
   
5,129,153
 
Stock -based compensation
   
3,029,830
   
13,640,012
 
Foreign exchange (gain) loss
   
(2,145,686
)
 
77,290
 
Total expenses
   
51,688,500
   
27,384,142
 
               
Loss before income tax
   
(40,676,557
)
 
(7,998,432
)
Income tax expense (recovery)
   
(5,153,272
)
 
89,257
 
               
Net loss
 
$
(35,523,285
)
$
(8,087,689
)
               
Net loss per common share — basic and diluted
 
$
(0.43
)
$
(0.08
)
               
Statement of Cash Flows Data
             
Operating activities
 
$
(799,742
)
$
14,089,464
 
Investing activities
   
(21,198,261
)
 
(33,103,653
)
Financing activities
   
34,428,044
   
57,348,910
 
Foreign exchange gain (loss)
   
(300,000
)
 
19,676
 
               
Increase in cash
 
$
12,130,041
 
$
38,354,397
 
 
   
At December 31,
 
   
2006
 
2007
 
Balance Sheet Data
         
Cash and cash equivalents
 
$
29,909,168
 
$
71,537,827
 
               
Working capital (including cash)
   
37,106,929
   
70,974,442
 
Oil and gas properties
   
43,679,601
   
72,525,024
 
Total assets
   
87,981,954
   
157,203,251
 
Other long-term liabilities
   
1,556,823
   
1,973,938
 
Shareholders’ equity
 
$
83,020,523
 
$
145,921,756
 
 
22


RISK FACTORS

In deciding how to vote on the Arrangement and related matters described in this Joint Proxy Statement, you should consider the following risk factors in addition to (i) the risk factors set forth in Gran Tierra’s most recent Quarterly Report on Form 10-Q, as filed with the SEC, and (ii) the risk factors set forth in Solana’s most recent Annual Information Form, as filed on SEDAR.

Risks Relating to the Arrangement

The Combined Company May Not Be As Successful As Expected.

In evaluating the terms of the transaction, Gran Tierra and Solana each analyzed their respective businesses and made numerous assumptions concerning their respective future operations. A key assumption was that the transaction would result in a combined entity with operating results that would be substantially better than those recently experienced by either of the constituent companies. These operating results may not be achieved.

There is a Risk That the Arrangement May Be a Taxable Event for U.S. Solana Shareholders.

U.S. Solana Shareholders who participate in the Arrangement will receive shares of Gran Tierra common stock in exchange for their Solana Shares. A U.S. Solana Shareholder generally will recognize gain or loss on this exchange for U.S. federal income tax purposes unless the Arrangement qualifies as a reorganization. Notwithstanding that the Arrangement qualifies as a reorganization it may be necessary to recognize gain on the exchange if Solana is or has been a passive foreign investment company at any point in time when the U.S. Solana Shareholder held the Solana Shares. The Arrangement may qualify as a reorganization only if, among other requirements, the GTE–Solana Exchangeable Shares (along with certain voting and related rights) are treated as shares of Gran Tierra common stock for U.S. federal tax purposes. The status of Solana as a passive foreign investment company is determined separately for each U.S. Solana Shareholder and is based on the nature of Solana’s income and assets for each taxable year in which the U.S. Solana Shareholder held the Solana Shares. No ruling from the Internal Revenue Service nor any legal opinion from U.S. counsel will be sought with respect to the issues of whether the Arrangement qualifies as a reorganization for U.S. federal tax purposes or whether Solana is or has been a passive foreign investment company, and there is the possibility of U.S. federal taxation of a U.S. Solana Shareholder’s gain in the Solana shares upon the exchange pursuant to the Arrangement. If the Arrangement is a taxable exchange the recognition and the deductibility of losses may be subject to limitations.

A U.S. Solana Shareholder who exercises Dissent Rights in the Arrangement will have a taxable transaction for U.S. federal tax purposes.

For a description of the material federal income tax consequences of the Arrangement, see “Material U.S. Federal Income Tax Consequences of the Arrangement”.

The Issuance of Shares of Gran Tierra Common Stock to Securityholders of Solana in Connection with the Arrangement Will Be Dilutive to Existing Gran Tierra Stockholders.

The proposed issuance of Gran Tierra common stock to Solana Securityholders in connection with the Arrangement will increase the total number of shares of Gran Tierra common stock outstanding. On a diluted basis, upon the consummation of the Arrangement, former Solana Securityholders will own approximately 49% of the combined company and the current Gran Tierra securityholders will own approximately 51% of the combined company. Increasing the number of shares of Gran Tierra common stock outstanding would have dilutive effects on the voting power of the current holders of Gran Tierra common stock. Other than the effects incidental to increasing the number of shares of Gran Tierra common stock outstanding, the proposed issuance of shares of common stock to Solana Securityholders would not affect the rights of the holders of Gran Tierra’s currently outstanding common stock.
 
23

 
The Issuance of Shares of Gran Tierra Common Stock to Securityholders of Solana in Connection with the Arrangement Will Deplete Gran Tierra’s Authorized Shares of Common Stock, and if Gran Tierra’s Proposal 3 is Not Passed, Gran Tierra May Not Have Sufficient Shares to Acquire Other Businesses or Assets.

Following this transaction, and assuming Proposal 3 does not pass, the number of shares of Gran Tierra common stock outstanding or reserved for issuance under Gran Tierra’s outstanding GTE–Goldstrike Exchangeable Shares, warrants and options will be approximately 270 million shares, leaving only approximately 30 million shares available to use for the purpose of acquiring additional businesses or assets. If Proposal 3 does not pass Gran Tierra may not have sufficient shares of its common stock authorized and available for issuance to acquire additional businesses without a vote of its stockholders, which could delay or prevent the consummation of additional transactions.

Potential Future Sale of Shares of Gran Tierra Common Stock Could Affect its Market Price.

Some of the current Solana Securityholders may want to liquidate their investment in the combined company following the combination. The sale of a significant number of shares of Gran Tierra common stock by these Solana Securityholders could have a negative impact upon the stock price of the Gran Tierra common stock, particularly in the short term.

The Combined Company’s Future Operating Results May Fluctuate, Which Could Result in a Lower Price for its Common Stock.

The market price of the Gran Tierra common stock may, following the consummation of the Arrangement, decline below the levels currently prevailing. The market price of Gran Tierra’s common stock may be adversely affected by numerous factors, including:

· actual or anticipated fluctuations in its operating results;

· changes in financial estimates by securities analysts; and

· general market conditions and other factors.

Gran Tierra’s future operating results may fluctuate significantly depending upon a number of factors, including the level of oil and gas drilling activity and general industry conditions. See “Risks Relating to the Operations of the Combined Company” and “Risks Relating to The Combined Company’s Industry” below.

The Rights and Privileges of Gran Tierra Common Stock are Different from the Rights and Privileges of Solana Shares.

Pursuant to the Arrangement, Solana Securityholders may receive shares in the common stock of Gran Tierra. Solana is a corporation governed by the laws of Alberta and Gran Tierra is a corporation governed by the laws of Nevada. While the rights and privileges of shareholders of an Alberta corporation are, in many instances, comparable to those of stockholders of a Nevada corporation, there are numerous differences that a Solana Securityholder may find disadvantageous. See “Comparison of Stockholder Rights” on page 141.

Integration of the Combined Company’s Personnel and Financial Controls May be More Difficult Than Expected, Which Could Strain the Combined Company’s Operations.
 
The combined company will need to integrate its personnel, accounting and other systems, and operations. This can be difficult to do and will require significant management and other resources. For example, the combined company will be subject to the requirements of the United States Sarbanes-Oxley Act of 2002, or the “Sarbanes-Oxley Act”, to which Solana has not been subject. If there are difficulties in integrating Solana’s systems into the Gran Tierra systems so that the combined company cannot meet all of its requirements under the Sarbanes-Oxley Act, this could cause a significant diversion of management’s attention from running the business, may cause the combined company to report one or more material weaknesses in its internal control over financial reporting, may cause other failures to comply with the Sarbanes-Oxley Act, or may be expensive in legal, financial or other costs to cause the combined company to become compliant, any of which could be time-consuming or costly and may also place undue strain on the personnel, systems and resources of the combined company and cause the stock price of the combined company to decline.
 
24

 
Risks Relating to the Operations of the Combined Company

The Combined Company’s Operations Will Be Highly Concentrated in Colombia.
 
Gran Tierra’s current business focuses on the oil and gas industry in a limited number of properties in Colombia, Argentina and Peru, with the majority of the focus in Colombia. Solana’s current business consists exclusively of the exploration and development of oil and gas properties in Colombia. As a result, the combined company’s operations will be highly concentrated in Colombia. The combined company intends to expand into other countries, but initially 90% of the combined company’s proved oil and gas reserves and 95% of its production is expected to be in Colombia. There are risks specific to the Colombia operations, as well as general risks associated with the South American oil and gas industry, which are described in more detail below in “Risks Related to The Combined Company’s Industry.” Larger companies have the ability to manage these types of risks through diversification. However, the combined company will lack diversification, both in terms of the nature and geographic scope of its business. As a result, factors affecting the oil and gas industry or the regions in which it operates will likely impact it more acutely than if the combined company’s business was more diversified.

Unanticipated Problems in the Combined Company’s Operations May Harm Its Business and Its Viability. 
 
If the combined company’s operations in South America are disrupted and/or the economic integrity of these projects is threatened for unexpected reasons, its business may be harmed. These unexpected events may be due to technical difficulties, operational difficulties which impact the production, transport or sale of the combined company’s products, security risks related to guerrilla activities, geographic and weather conditions, political changes, business reasons or otherwise. Prolonged problems may threaten the commercial viability of its operations.

 The Combined Company’s Oil Sales Will Depend on a Relatively Small Group of Customers, Which Could Adversely Affect Its Financial Results. 

The bulk of oil sales in Colombia are made to Ecopetrol, a government agency, with the remainder sold to Meta Petroleum, a subsidiary of Pacific Rubiales, a Canadian public company. While oil prices in Colombia are related to international market prices, lack of competition for sales of oil may diminish prices and depress the financial results of the combined company.

The entire Argentine domestic refining market is small and export opportunities are limited by available infrastructure. As a result, the combined company’s oil sales in Argentina will depend on a relatively small group of customers, and currently, on two customers in country. During 2007, Gran Tierra sold all of its production in Argentina to Refiner S.A. The lack of competition in this market could result in unfavorable sales terms which, in turn, could adversely affect the combined company’s financial results. Currently, all operators in Argentina are operating without sales contracts. The combined company will not have any certainty as to when the situation will be resolved or what the final outcome will be.

Risks Related to The Combined Company’s Industry
 
The Combined Company’s Exploration for Oil and Natural Gas Is Risky and May Not Be Commercially Successful, Impairing Its Ability to Generate Revenues from Its Operations. 
 
Oil and natural gas exploration involves a high degree of risk. These risks are more acute in the early stages of exploration. The combined company’s exploration expenditures may not result in new discoveries of oil or natural gas in commercially viable quantities. It is difficult to project the costs of implementing an exploratory drilling program due to the inherent uncertainties of drilling in unknown formations, the costs associated with encountering various drilling conditions, such as over-pressured zones and tools lost in the hole, and changes in drilling plans and locations as a result of prior exploratory wells or additional seismic data and interpretations thereof. If exploration costs exceed the combined company’s estimates, or if its exploration efforts do not produce results which meet its expectations, its exploration efforts may not be commercially successful, which could adversely impact its ability to generate revenue from its operations.
 
25

 
The Combined Company May Not Be Able to Develop Oil and Gas Reserves on an Economically Viable Basis, and Its Reserves and Production May Decline as a Result. 
 
To the extent that the combined company succeeds in discovering oil and/or natural gas, reserves may not be capable of production levels it projects or in sufficient quantities to be commercially viable. On a long-term basis, the combined company’s viability will depend on its ability to find or acquire, develop and commercially produce additional oil and gas reserves. Without the addition of reserves through exploration, acquisition or development activities, its reserves and production will decline over time as reserves are produced. The combined company’s future reserves will depend not only on its ability to develop then-existing properties, but also on its ability to identify and acquire additional suitable producing properties or prospects, to find markets for the oil and natural gas it develops and to effectively distribute its production into its markets.
 
Future oil and gas exploration may involve unprofitable efforts, not only from dry wells, but from wells that are productive but do not produce sufficient net revenues to return a profit after drilling, operating and other costs. Completion of a well does not assure a profit on the investment or recovery of drilling, completion and operating costs. In addition, drilling hazards or environmental damage could greatly increase the cost of operations, and various field operating conditions may adversely affect the production from successful wells. These conditions include delays in obtaining governmental approvals or consents, shut-downs of connected wells resulting from extreme weather conditions, problems in storage and distribution and adverse geological and mechanical conditions. The combined company may not be able to optimally manage these conditions, and it will not be able to eliminate them completely in any case. Therefore, these conditions could diminish revenue and cash flow levels of the combined company and result in the impairment of its oil and natural gas interests.

Estimates of Oil and Natural Gas Reserves May Be Inaccurate and The Combined Company’s Actual Revenues May Be Lower than Its Financial Projections. 
 
The combined company will make estimates of oil and natural gas reserves, upon which it will base its financial projections. It will make these reserve estimates using various assumptions, including assumptions as to oil and natural gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds. Some of these assumptions are inherently subjective, and the accuracy of its reserve estimates rely in part on the ability of its management team, engineers and other advisors to make accurate assumptions. Economic factors beyond its control, such as interest and exchange rates, will also impact the value of its reserves. The process of estimating oil and gas reserves is complex, and will require the combined company to use significant decisions and assumptions in the evaluation of available geological, geophysical, engineering and economic data for each property. As a result, the combined company’s reserve estimates will be inherently imprecise. Actual future production, oil and natural gas prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable oil and gas reserves may vary substantially from those it estimates. If actual production results vary substantially from the combined company’s reserve estimates, this could materially reduce its revenues and result in the impairment of its oil and natural gas interests.

If Oil and Natural Gas Prices Decrease, The Combined Company May be Required to Take Write-Downs of the Carrying Value of Its Oil and Natural Gas Properties.
 
The combined company will follow the full cost method of accounting for its oil and gas properties. A separate cost center is maintained for expenditures applicable to each country in which it will conduct exploration and/or production activities. Under this method, the net book value of properties on a country-by-country basis, less related deferred income taxes, may not exceed a calculated “ceiling.” The ceiling is the estimated after tax future net revenues from proved oil and gas properties, discounted at 10% per year. In calculating discounted future net revenues, oil and natural gas prices in effect at the time of the calculation are held constant, except for changes which are fixed and determinable by existing contracts. The net book value is compared to the ceiling on a quarterly basis. The excess, if any, of the net book value above the ceiling is required to be written off as an expense. Under SEC full cost accounting rules, any write-off recorded may not be reversed even if higher oil and natural gas prices increase the ceiling applicable to future periods. Future price decreases could result in reductions in the carrying value of such assets and an equivalent charge to earnings.
 
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Drilling New Wells Could Result in New Liabilities, Which Could Endanger The Combined Company’s Interests in Its Properties and Assets. 
 
There are risks associated with the drilling of oil and natural gas wells, including encountering unexpected formations or pressures, premature declines of reservoirs, blow-outs, craterings, sour gas releases, fires and spills. The occurrence of any of these events could significantly reduce the combined company’s revenue or cause substantial losses, impairing its future operating results. It may become subject to liability for pollution, blow-outs or other hazards. It will obtain insurance with respect to these hazards, but such insurance has limitations on liability that may not be sufficient to cover the full extent of such liabilities. The payment of such liabilities could reduce the funds available to the combined company or could, in an extreme case, result in a total loss of its properties and assets. Moreover, the combined company may not be able to maintain adequate insurance in the future at rates that are considered reasonable. Oil and natural gas production operations are also subject to all the risks typically associated with such operations, including premature decline of reservoirs and the invasion of water into producing formations.
 
Guerrilla Activity in Colombia Could Disrupt or Delay The Combined Company’s Operations and Jeopardize Its Operations and Personnel in Colombia. 
 
A 40-year armed conflict between government forces and anti-government insurgent groups and illegal paramilitary groups - both funded by the drug trade - continues in Colombia. Insurgents continue to attack civilians and violent guerrilla activity continues in many parts of the country.
 
Gran Tierra, through its acquisition of Argosy Energy International, has interests in two regions of Colombia - in the Middle Magdalena and the Putumayo regions. The Putumayo region has been prone to guerrilla activity in the past. In 1989, Argosy’s facilities in one field were attacked by guerrillas and operations were briefly disrupted. Pipelines have also been targets, including the Trans-Andean export pipeline which transports oil from the Putumayo region.  In March and April of 2008, sections of one of the Ecopetrol pipelines were blown up by guerrillas, which temporarily reduced Gran Tierra’s deliveries to Ecopetrol in the first quarter of 2008. Ecopetrol was able to restore deliveries within one to two weeks of these attacks and currently there are no interruptions to Gran Tierra’s deliveries.

Solana has interests in four regions of Colombia: the Llanos, lower Magdalena, Putumayo and Catatumbo basins. Solana’s large Catguas block is located in the Catatumbo basin. This basin borders Venezuela and has historically been an area of high security risk where there continues to be guerrilla activity.

Continuing attempts to reduce or prevent guerrilla activity may not be successful and guerrilla activity may disrupt the combined company’s operations in the future. The combined company may not be able to maintain the safety of its operations and personnel in Colombia and this violence may affect its operations in the future. Continued or heightened security concerns in Colombia could also result in a significant loss to the combined company.
 
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CAUTIONARY STATEMENT ABOUT FORWARD LOOKING STATEMENTS

Cautionary Statement About Forward Looking Statements by Gran Tierra

This Joint Proxy Statement, including the documents incorporated by reference from filings made by Gran Tierra with the SEC, contains forward-looking statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, or the “Securities Act”, and Section 21E of the United States Securities Exchange Act of 1934, as amended, or the “Exchange Act”, regarding Gran Tierra. Statements regarding Gran Tierra’s plans, goals, strategies, intent, beliefs or current expectations are forward-looking statements regarding Gran Tierra. These statements are expressed by Gran Tierra in good faith and based upon a reasonable basis when made, but there can be no assurance that these expectations will be achieved or accomplished. These forward looking statements can be identified by the use of terms and phrases such as “believe”, “plan”, “intend”, “anticipate”, “target”, “estimate”, “expect”, and the like, and/or future-tense or conditional constructions “may”, “could”, “should”, etc. Items contemplating or making assumptions about, actual or potential future sales, discoveries, developments, market size, collaborations, and trends or operating results also constitute such forward-looking statements.
 
Although forward-looking statements made by Gran Tierra in this Joint Proxy Statement reflect the good faith judgment of Gran Tierra’s management, forward-looking statements are inherently subject to known and unknown risks, business, economic and other risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Joint Proxy Statement. Gran Tierra assumes no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this proxy statement, other than as may be required by applicable law or regulation. Readers are urged to carefully review and consider the various disclosures made by Gran Tierra in its reports filed with the SEC which attempt to advise interested parties of the risks and factors that may affect Gran Tierra’s business, financial condition, results of operations and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, Gran Tierra’s actual results may vary materially from those expected or projected.

Cautionary Statement About Forward Looking Statements for Solana

Certain statements contained in this Joint Proxy Statement, including the documents incorporated by reference, may constitute forward-looking statements for Solana. These statements relate to future events or Solana’s future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Solana believes that the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this Joint Proxy Statement should not be unduly relied upon by investors. These statements speak only as of the date of this Joint Proxy Statement and are expressly qualified, in their entirety, by this cautionary statement.
 
In particular, this Joint Proxy Statement, and the documents incorporated by reference, contain forward-looking statements, pertaining to the following:
 
·
projections of market prices and costs;
 
·
supply and demand for oil and natural gas;
 
·
the quantity of reserves;
 
·
oil and natural gas production levels;
 
·
capital expenditure programs;
 
·
treatment under governmental regulatory and taxation regimes; and
 
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·
expectations regarding Solana’s ability to raise capital and to continually add to reserves through acquisitions and development.
 
With respect to forward-looking statements contained in this Joint Proxy Statement, and the documents incorporated by reference, Solana has made assumptions regarding, among other things:
 
·
the Colombian legislative and regulatory environment;
 
·
the impact of increasing competition; and
 
·
Solana’s ability to obtain additional financing on satisfactory terms.
 
Solana’s actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth below and elsewhere in this Joint Proxy Statement:
 
·
volatility in the market prices for oil and natural gas;
 
·
uncertainties associated with estimating reserves;
 
·
geological, technical, drilling and processing problems;
 
·
liabilities and risks, including environmental liabilities and risks, inherent in oil and natural gas operations;
 
·
incorrect assessments of the value of acquisitions;
 
·
competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; and
 
·
the other factors referred to under "Risk Factors".
 
The forward-looking statements or information contained in this Joint Proxy Statement are made as of the date hereof and Solana undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable securities laws.
 
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INFORMATION ABOUT THE MEETINGS AND VOTING

The Gran Tierra Special Meeting – Information for Gran Tierra Stockholders

Why am I receiving these materials?

We have sent you this Joint Proxy Statement and the enclosed proxy card because the Gran Tierra Board is soliciting your proxy to vote at the Gran Tierra Special Meeting. You are invited to attend the Gran Tierra Special Meeting to vote on the proposals described in this Joint Proxy Statement. However, you do not need to attend the meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card, or follow the instructions below to submit your proxy over the Internet.
 
We intend to mail this Joint Proxy Statement and accompanying proxy card on or about ●, 2008 to all stockholders of record entitled to vote at the Gran Tierra Special Meeting.

The Gran Tierra Special Meeting is to be held on ●, 2008 at 9:00 a.m., Mountain Time, at ●.

Who can vote at the Gran Tierra Special Meeting?

Only stockholders of record at the close of business on September 15, 2008 will be entitled to vote at the Gran Tierra Special Meeting. On this record date, there were ● shares of common stock outstanding and entitled to vote, and one share of Special Voting Stock outstanding. On the record date, the share of Special Voting Stock was entitled to ● votes, which equals the number of shares of common stock issuable upon exchange of the GTE–Goldstrike Exchangeable Shares that were issued in connection with the transaction between the former shareholders of Gran Tierra Energy Canada and Goldstrike, Inc., a Nevada corporation, which came to be known as the current Gran Tierra Energy Inc. as a result of that transaction.
 
Stockholder of Record: Shares Registered in Your Name
 
If on September 15, 2008 your shares of Gran Tierra common stock were registered directly in your name with Gran Tierra’s transfer agent, Computershare Trust Company, N.A., then you are a stockholder of record. As a stockholder of record, you may vote in person at the meeting or vote by proxy. Whether or not you plan to attend the meeting, we urge you to fill out and return the enclosed proxy card or vote by proxy over the Internet as instructed below to ensure your vote is counted.
 
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
 
If on September 15, 2008 your shares of Gran Tierra common stock were held, not in your name, but rather in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Gran Tierra Special Meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your account. You are also invited to attend the Gran Tierra Special Meeting. However, since you are not the stockholder of record, you may not vote your shares in person at the meeting unless you request and obtain a valid proxy from your broker or other agent.

Stockholders Holding GTE–Goldstrike Exchangeable Shares
 
Holders of GTE–Goldstrike Exchangeable Shares are entitled to instruct the Goldstrike Trustee as to how to vote their GTE–Goldstrike Exchangeable Shares. The Goldstrike Trustee holds the one currently outstanding share of Special Voting Stock, which is entitled to as many votes as there are outstanding GTE–Goldstrike Exchangeable Shares on the record date, and may only vote the share of Special Voting Stock as directed by the holders of GTE–Goldstrike Exchangeable Shares. Holders of GTE–Goldstrike Exchangeable Shares who do not hold their GTE–Goldstrike Exchangeable Shares in their own name are not entitled to instruct the Goldstrike Trustee as to how to exercise voting rights at the Gran Tierra Special Meeting. Only holders of GTE–Goldstrike Exchangeable Shares whose names appear on the records of Gran Tierra as the registered holders of GTE–Goldstrike Exchangeable Shares are entitled to instruct the Goldstrike Trustee as to how to exercise voting rights in respect of their GTE–Goldstrike Exchangeable Shares at the Gran Tierra Special Meeting. Holders of GTE–Goldstrike Exchangeable Shares may also obtain a proxy from the Goldstrike Trustee to vote their GTE–Goldstrike Exchangeable Shares at the Gran Tierra Special Meeting. Holders of GTE–Goldstrike Exchangeable Shares should follow the instructions sent to them by the Goldstrike Trustee in order to exercise their voting rights.
 
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What am I voting on?

There are four matters scheduled for a vote:

·
to approve the issuance of shares of Gran Tierra common stock to be issued in connection with the acquisition of the outstanding securities of Solana;
 
·
to approve an amendment to Gran Tierra’s articles of incorporation to create a new special voting share to enable the GTE–Solana Exchangeable Shares to be issued in the transaction to vote, as well as to make several technical changes;
 
·
to approve an amendment to Gran Tierra’s articles of incorporation to increase the total number of shares of common stock authorized by 300,000,000 and change the board voting requirement for issuance of common stock; and
 
·
to approve Gran Tierra’s 2007 Equity Incentive Plan, as amended and restated, to increase the number of shares available for issuance thereunder from 9,000,000 shares to 18,000,000 shares.
 
How do I vote?

For each of the matters to be voted on, you may vote “For” or “Against” or abstain from voting. The procedures for voting are as follows:
 
Stockholder of Record: Shares Registered in Your Name
 
Whether or not you plan to attend the Gran Tierra Special Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the Gran Tierra Special Meeting and vote in person even if you have already voted by proxy. If you are a stockholder of record, you may vote in person at the Gran Tierra Special Meeting, vote by proxy using the enclosed proxy card or vote by proxy on the Internet, as follows: 

 
·
to vote in person, come to the meeting and we will give you a ballot when you arrive;
 
 
·
to vote using the proxy card, simply complete, sign and date the enclosed proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us by 11:59 p.m., Mountain Time, on ●, 2008, we will vote your shares as you direct; and
 
 
·
to vote on the Internet, go to http://www.proxyvote.com to complete an electronic proxy card. You will be asked to provide the company number and control number from the enclosed proxy card. Your vote must be received by 11:59 p.m., Mountain Time, on ●, 2008 to be counted. 
 
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
 
If you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than from Gran Tierra. Simply complete and mail the proxy card to ensure that your vote is counted. Alternatively, you may vote over the Internet as instructed by your broker or bank. To vote in person at the Gran Tierra Special Meeting, you must obtain a valid proxy from your broker, bank, or other agent. Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a proxy form.
 
Beneficial Owner: GTE–Goldstrike Exchangeable Shares
 
If you are a holder of GTE–Goldstrike Exchangeable Shares, you should have received voting instructions with these proxy materials from the Goldstrike Trustee, which is the holder of the share of Special Voting Stock. Follow the instructions from the Goldstrike Trustee, or contact the Goldstrike Trustee for further information. Instruments of proxy must be received by Olympia Trust Company, 2300, 125 - 9th Avenue S.E., Calgary, Alberta, T2G OP6, by ● p.m., Mountain Time, on ●, 2008, or not less than 48 hours before the time for the holding of any adjournment of the meeting.
 
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Gran Tierra provides Internet proxy voting to holders of Gran Tierra common stock to allow you to vote your shares on-line, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers.

How many votes do I have?
 
On each matter to be voted upon, you have one vote for each share of Gran Tierra common stock you own as of September 15, 2008, and one vote for each GTE–Goldstrike Exchangeable Share held as of September 15, 2008, with the votes of all outstanding GTE–Goldstrike Exchangeable Shares being represented by the one share of Special Voting Stock of Gran Tierra. Holders of GTE–Goldstrike Exchangeable Shares should follow the instructions sent to them by the Goldstrike Trustee in order to exercise their voting rights.

What if I return a proxy card but do not make specific choices?

If you return a signed and dated proxy card without marking any voting selections, your shares will be voted “For” the issuance of the shares of Gran Tierra common stock contemplated to consummate the Arrangement, “For” the amendment to Gran Tierra’s articles of incorporation to create a new special voting share to enable the GTE–Solana Exchangeable Shares to vote as well as to make several technical changes, “For” the amendment of Gran Tierra’s articles of incorporation to increase the number of shares of common stock authorized and change the board voting requirement for issuance of common stock from unanimous to a simple board action, and “For” the approval of Gran Tierra’s 2007 Equity Incentive Plan, as amended and restated, to increase the number of shares available for issuance under the plan. If any other matter is properly presented at the meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.