Gran Tierra Energy has signed, through an indirect wholly owned subsidiary, an exploration, development and production sharing agreement ('EDPSA') for the onshore Guba- Khazaryani region within the Republic of Azerbaijan with the State Oil Company of the Republic of Azerbaijan ('SOCAR').
'We are extremely excited about the opportunity to enter Azerbaijan, which we view as a compelling addition to Gran Tierra’s portfolio, and we are honored to be welcomed by the Republic of Azerbaijan and to partner with SOCAR, a highly professional, world-class integrated energy company,' said Gary Guidry, President and Chief Executive Officer of Gran Tierra. 'We believe this represents an early, scaled entry through SOCAR’s bid round into a jurisdiction that is clearly supportive of the continued development of its hydrocarbon resources, under a stable and transparent framework, as demonstrated by several recently announced production sharing agreements. Gran Tierra’s nimble operating model and proven track record of exploration and development in complex geologies position us well to advance exploration and development activities in Azerbaijan. Azerbaijan is a deeply established hydrocarbon province with major discoveries and a world-class, export-ready infrastructure system, supported by more than a century of oil and gas production history, including some of the world’s earliest and most prolific commercial oil developments. This aligns well with our strategy of pursuing risk-mitigated, capital-efficient growth in regions with demonstrated upside. Importantly, Azerbaijan plays a critical role in European energy security, supplying both oil and gas to key European markets, and we are excited about the opportunity to participate in that value chain over the long term.'
The effectiveness of the EDPSA remains subject to certain customary and legal conditions, including approval by the legislature of the Republic of Azerbaijan and various other requisite legal formalities and procedures.
Key Highlights
- EDPSA provides significant access rights in a proven region, with access to established infrastructure and exposure to a contiguous basin trend supported by shared geology, legacy well control, and seismic data, providing clear exploration, appraisal, and development upside.
- Azerbaijan is a world-class petroleum region anchored by some of the largest conventional oil and gas fields globally. The Contract Area surrounds an approximately 65-kilometer-long structure that has produced more than 100 million barrels of oil and more than 200 billion cubic feet of natural gas, underscoring the scale and quality of the petroleum system in Azerbaijan.
- Allows Gran Tierra to leverage its proven expertise in exploration, appraisal, development, and optimization, pairing the Company’s core technical and operational capabilities with strategic access to European markets, and clear, capital-efficient development horizons.
- Gran Tierra has secured a 65% working interest (“WI”) and operatorship of the Contract Area, which equals approximately 0.4 million gross acres, more than two times our current acreage in Ecuador.
- Gran Tierra’s EDPSA has five years for exploration and appraisal, and 25 years for development of any economic discoveries, with potential to extend development an additional five years.
- The exploration period consists of an initial three-year phase followed by a second two-year phase. The initial phase includes the acquisition of a gravity study, together with a commitment to drill two wells and acquire 250 km² of 3D seismic. The second phase carries a further commitment to drill two wells and acquire an additional 250 km² of 3D seismic. Upon completion of the initial phase, the Company has the option to proceed into the second phase.
- Gran Tierra expects to commence an airborne gravity study in 2026, with seismic acquisition and drilling activities planned to begin in 2027. These activities are expected to be funded by the Company’s forecasted net cash provided by operating activities.
Source: Gran Tierra Energy
