Gran Tierra Energy Inc. ('Gran Tierra' or the 'Company') (TSX and NYSE: GTE) and Petroamerica Oil Corp. ('Petroamerica') (TSX-V: PTA), both international oil and gas companies operating in Colombia, are pleased to announce that they have entered into an arrangement agreement dated November 12, 2015 (the 'Arrangement Agreement') whereby Gran Tierra has agreed to acquire all of the issued and outstanding common shares of Petroamerica by way of a statutory plan of arrangement under the Business Corporations Act (Alberta) (the 'Acquisition').

Under the terms of the Arrangement Agreement, Petroamerica shareholders will receive, at their election, either 0.40 of a Gran Tierra common share or C$1.33in cash for each Petroamerica share, subject to a maximum of 70 percent of the consideration payable in cash. If Petroamerica shareholders elect to accept all share consideration, Gran Tierra expects to issue 43.6 million common shares. Gran Tierra will also be assuming the net positive working capital of Petroamerica, estimated at $25 million as at October 31, 2015, after accounting for severance and transaction costs, and including previously restricted cash which Gran Tierra expects to replace with letters of credit. Based on a 5-day volume weighted average trading price of C$3.32per Gran Tierra common share on the facilities of the TSX, the transaction value including working capital and accounting for severance and transaction costs is $84 million.

Gran Tierra believes that the acquisition of Petroamerica is highly strategic and will strengthen its position as the premier operator and land holder in the Putumayo Basin. Petroamerica's undeveloped land holdings and exploration and development portfolio are highly complementary to Gran Tierra's own exploration portfolio, strong cash flow, reserves base and balance sheet strength. With expected base pro forma production of 28,000 to 30,000 boe/d in 2016, Gran Tierra believes that the combined entity will be uniquely positioned as a high growth, well-capitalized, Colombia focused oil and gas producer with a dominant position in the Putumayo basin and a growing presence in the Llanos basin. In addition, Gran Tierra has the financial capacity to pursue additional exploration and development projects within Petroamerica's asset portfolio. The successful completion of the Acquisition is expected to be accretive to Gran Tierra's net asset value per share. Gran Tierra will remain debt free with pro forma working capital of $135millionto $210 million, depending on the form of consideration elected by Petroamerica shareholders.

'This transaction is the first step of our corporate strategy to expand and diversify Gran Tierra's oil and gas growth portfolio in Colombia,' commented Gary Guidry, Gran Tierra's President and CEO, 'and we are very excited to put our cash flow and balance sheet to work on the high quality Petroamerica assets.'

Ralph Gillcrist, Petroamerica's President and CEO commented, 'This transaction ensures that the high quality assets of Petroamerica will be fully developed and the combination with Gran Tierra will create one of the best-positioned companies in the prolific Putumayo and Llanos basins of Colombia. For Petroamerica's shareholders, the resulting pro forma company will bring improved liquidity, increased diversity and scale, an outstanding near-term opportunity set and most importantly, the financial capability and balance sheet strength to maximize value of Petroamerica's portfolio.'

ACQUISITION HIGHLIGHTS

  • Acquisition of before royalty, 4.5 million barrels of Proven and 8.1 million barrels Proven + Probable working interest reserves, based on an NI 51-101 compliant report prepared by GLJ Petroleum Consultants Ltd., as at December 31, 2014;
  • Approximately 3,000 boe/d of working interest production, composed of approximately 60% Llanos basin production and 40% Putumayo basin production;
  • Approximately 2.2 million gross acres in Colombia (0.8 million net acres), including approximately 0.5 million gross acres (0.3 million net acres) adjacent to or near the Company's current acreage in the Putumayo basin, which management believes is prospective for the emerging N Sands exploration fairway;
  • Enhances near term exploration drilling inventory;
  • Significant opportunity to realize synergistic cost savings through a reduction in general & administrative expenses and tax planning opportunities;

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