Gran Tierra Energy Inc. has announced that the company entered into an agreement with PetroGranada Ltd to acquire all of the issued and outstanding shares of PetroGranada Colombia Ltd (PGC). Subject to approval by the Agencía Nacíonal de Hidrocarburos of Colombia (ANH), PGC holds a full 50% undivided working interest in the exploration and production contract for the Putumayo-7 block (PUT-7 Block), in the Putumayo Basin of Colombia. Consideration for the Acquisition is US$19 million, subject to customary adjustments, to be paid on the closing of the Acquisition. In addition, the Company has agreed to pay an additional US$4 million to PGC if the cumulative production from the PUT-7 Block plus gross Proved plus Probable reserves under the PUT-7 Block meet or exceed 8 million bbls. As a result of its previous acquisition of Petroamerica Oil Corp., the Company already holds the rights to the other 50% undivided working interest of the PUT-7 Block, which is subject to ANH approval. Upon receiving ANH approval with respect to both interests, the Company will hold a 100% undivided working interest and be the operator of the PUT-7 Block.
The Acquisition will be funded with cash-on-hand, and the Company will remain debt free with an undrawn US$200 million credit facility.
The PUT-7 Block is highly prospective in the Company's view. Based on an NI 51-101 independent report prepared by GLJ Petroleum Consultants Ltd., as of 31 December 2014, there were 1.9 million bbls of Proved plus Probable reserves with respect to the 50% undivided working interest of Petroamerica Oil Corp. In addition, the Company believes there are multiple seismically identified drill ready exploration prospects on the PUT-7 Block, including the emerging N Sands play.
"This acquisition is strategic to the Company in consolidating reserves and high potential exploration opportunities in the Putumayo Basin, and throughout the hydrocarbon producing basins in Colombia. This operated block will provide a focal point for potential new infrastructure in the southern Putumayo as we begin the exciting exploration and development programmes in this region," commented Gary Guidry, President and Chief Executive Officer of Gran Tierra.
Edited from press release by Angharad Lock
Read the article online at: https://www.oilfieldtechnology.com/exploration/15012016/gran-tierra-to-acquire-consolidating-interests-in-the-putumayo-7-block-1912/