- Sale of the Company’s Colombia and Ecuador Oil Business, Representing All of Its South American Assets, to Maurel & Prom Representing a Total Consideration of $1.33 Billion
- Continuing Company to Have an Estimated Pro-Forma PDP Net Asset Value (NPV10 BT) of Approximately $12.49 per Share (fully diluted), Representing a Premium of Approximately 83% to Gran Tierra’s 20-Day Volume Weighted Average Price
- Purchaser to Assume Substantially All of the Company’s Net Liabilities, Positioning Gran Tierra to be Debt-Free with Significant Cash at Completion
- Supports a Meaningful Return of Capital to Stockholders and Repositions Gran Tierra Around Fully Financed Growth Plans in Canada and Azerbaijan
Gran Tierra Energy has entered into a definitive share sale and purchase agreement to sell its oil business in Colombia and Ecuador (collectively, the 'Divested Business') to Établissements Maurel & Prom S.A., a Paris-listed international oil and natural gas exploration and production company majority owned by PT Pertamina Internasional Eksplorasi dan Produksi ('PIEP'), a subsidiary of Indonesia’s national energy company, Pertamina), representing a total consideration of $1.33 billion.
Highlights and Key Terms of the Transaction
The Transaction values the Divested Business at a total enterprise value of $1.33 billion. This figure includes the assumption by the Purchaser of the Company’s 9.750% Senior Secured Amortizing Notes due 2031 (the '2031 Notes') and 9.500% Senior Notes due 2029 (the '2029 Notes' and, together with the 2031 Notes, the 'Assumed Notes'), as well as the prepayment facility (the 'Prepayment Agreement'). After the assumption of substantially all liabilities, customary closing adjustments, working capital adjustments, redemption by the Company of its 7.750% Senior Notes due 2027 (the '2027 Notes'), and transaction costs, the Company is expected to have total net cash proceeds of approximately $315 million (the 'Net Cash Proceeds') of this total, the Company will have approximately $250 million in cash at closing, and the remaining $65 million will be payable 364 days thereafter pursuant to an unsecured note issued by the Divested Business. The Divested Business comprises all of the Company’s assets in Colombia and Ecuador.
The Transaction has been unanimously approved by Gran Tierra’s Board of Directors and is subject to the approval of Gran Tierra’s stockholders, the receipt of the requisite consents from certain creditors and the prepayment buyers under the Prepayment Agreement and customary regulatory approvals in Colombia and Ecuador, and the satisfaction of other closing conditions. Subject to satisfaction of these conditions, the Transaction is targeted to close on or about December 31, 2026, with an economic effective date of March 31, 2026.
The Divested Business represents approximately 29,000 barrels of oil per day of first half 2026 average working-interest production (before royalties), approximately 144 million barrels (MMbbl) of proved-plus-probable (2P) reserves (derived from the GTE McDaniel Reserves Report and before attributing reserves associated with the Tisquirama assets acquired in the first quarter of 2026), and approximately 1.4 million gross acres across Colombia and Ecuador. See 'Presentation of Oil and Gas Information'.
A portion of the Net Cash Proceeds is expected to be used to return capital to stockholders through a repurchase of the Company’s outstanding common shares (the 'Share Repurchase'), the structure, size and terms of which will be determined by the Board of Directors and announced separately, with the balance retained to fund the Company’s Canadian and Azerbaijan programs and for general corporate purposes.
'Gran Tierra’s agreement to divest of our Colombia and Ecuador business realizes the significant value we have created in these assets and marks a deliberate repositioning of the Company, which began in 2024 with the acquisition of the Canadian assets followed by the signing of an exploration, development and production sharing agreement ('EDPSA') for the onshore Guba-Khazaryani region within the Republic of Azerbaijan. The Transaction transfers our South American business and substantially all of our net liabilities to Maurel & Prom, leaving Gran Tierra debt-free with significant liquidity, including approximately $250 million in cash on close, zero debt, a $65 million note receivable due in less than a year and an undrawn $75 million (CAD) credit facility. That balance sheet strength allows us to potentially return a meaningful amount of capital to stockholders and accelerate the development of our retained assets. It simplifies our capital and cost structures, eliminating substantial interest costs, while maintaining a robust reserve and resource base with significant value upside for stockholders. We are excited about the future of our continuing business and grateful to our employees, partners, and the governments and host communities in Colombia and Ecuador. We believe Maurel & Prom is well positioned to be a strong long-term steward of the Colombia and Ecuador business,' said Gary Guidry, President and Chief Executive Officer of Gran Tierra.
See also: Gran Tierra Energy Inc. Reports Second Quarter 2026 Results
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Source: Gran Tierra Energy
