23 August 2016
Gran Tierra Energy Inc. Announces Closing of PetroLatina Energy Ltd. Acquisition
CALGARY, ALBERTA–(Marketwired – Aug. 23, 2016) –
All dollar amounts are in United States (“U.S.”) dollars unless otherwise indicated.
Gran Tierra Energy Inc. (“Gran Tierra” or the “Company”) (NYSE MKT:GTE)(TSX:GTE) is pleased to announce today that the Company has completed the previously announced acquisition of PetroLatina Energy Ltd. (“PetroLatina“) for a purchase price of approximately $525 million (the “Acquisition“), consisting of an initial payment of $500 million at closing, subject to closing adjustments, and a deferred payment of $25 million no later than December 31, 2016. PetroLatina is a private, independent exploration and production company with assets primarily in the Middle Magdalena basin of Colombia.
Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: “We are pleased that the Acquisition has closed quickly and we now look forward to developing the upside potential in our new core area in the prolific Middle Magdalena Basin. We have acquired significant proved, probable and possible reserves which we expect to enhance our long-term growth strategy and to be an excellent fit with Gran Tierra’s current reserves and resources base in the Putumayo Basin.”
The Acquisition was funded through a combination of cash on hand, borrowings under Gran Tierra’s existing credit facilities, a new term loan, and the proceeds of a private placement of subscription receipts of the Company (“Subscription Receipts“).
In connection with the Acquisition, Gran Tierra issued 57,835,134 Subscription Receipts priced at $3.00 per Subscription Receipt to certain institutional investors and certain directors and executive officers of Gran Tierra for aggregate gross proceeds of approximately $173.5 million. In accordance with their terms, each Subscription Receipt was exchanged for one share of common stock in the capital of the Company (the “Common Shares“) and the proceeds of the Subscription Receipt financing were released from escrow on August 23, 2016. Holders of the Subscription Receipts are not required to take any action in order to receive the Common Shares. The Common Shares were issued in book-entry form using the direct registration system of Computershare Trust Company, N.A., Gran Tierra’s transfer agent.
The Subscription Receipts were exchanged for Common Shares in reliance on the exemption from registration provided by Section 3(a)(9) of the U.S. Securities Act of 1933, as amended. This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities herein described, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.
In connection with the Acquisition, Gran Tierra amended its existing credit facility to add a $130 million term loan with Scotiabank, as administrative agent, and each of the lenders in Gran Tierra’s existing secured revolving credit facility, including Scotiabank, Natixis (New York Branch), Société Générale, HSBC Bank Canada, Royal Bank of Canada and Export Development Canada. This new term loan was used to fund a portion of the purchase price of the Acquisition.
About Gran Tierra Energy Inc.
Gran Tierra Energy Inc. is an international oil and gas exploration and production company, headquartered in Calgary, Canada, incorporated in the United States, trading on the NYSE MKT (GTE) and the Toronto Stock Exchange (GTE), and operating in South America. Gran Tierra holds interests in producing and prospective properties in Colombia, Peru, and Brazil. Gran Tierra has a strategy that focuses on establishing a portfolio of producing properties, plus production enhancement and exploration opportunities to provide a base for future growth. Additional information concerning Gran Tierra is available at www.grantierra.com. Investor inquiries may be directed to email@example.com or (403) 265-3221.
The information contained in this press release does not purport to be all-inclusive or contain all information that readers may require. You are encouraged to conduct your own analysis and review of Gran Tierra and of the information contained in this press release. Without limitation, you should read the entire record of publicly filed documents relating to the Company, consider the advice of your financial, legal, accounting, tax and other professional advisors and such other factors you consider appropriate in investigating and analyzing Gran Tierra. You should rely only on the information provided by Gran Tierra and are not entitled to rely on parts of that information to the exclusion of others. Gran Tierra has not authorized anyone to provide you with additional or different information, and any such information, including statements in media articles about Gran Tierra, should not be relied upon.
An investment in the securities of Gran Tierra is speculative and involves a high degree of risk. Gran Tierra’s business is subject to the risks normally encountered in the oil and gas industry and certain other risks that are associated with Gran Tierra’s current stage of development. An investment in the Company’s securities is suitable only for those purchasers who are willing to risk a loss of some or all of their investment and who can afford to lose some or all of their investment. You should carefully consider the risks described under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and in the Company’s subsequent SEC filings.
Forward-Looking Information Advisory
This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and financial outlook and forward looking information within the meaning of applicable Canadian securities laws (collectively, “forward-looking statements”). Such forward-looking statements include, but are not limited to, our ability to integrate the acquired assets with our own and realize the anticipated benefits, the scale, growth, planned synergies, the combined work program and operations going forward.
The forward-looking statements contained in this press release are based on certain assumptions made by Gran Tierra based on management’s experience and perception of historical trends, current conditions, anticipated future development and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond Gran Tierra’s control, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include the factors discussed or referenced under the heading “Part 1. Item 1A. Risk Factors” in Gran Tierra’s 2015 Annual Report on Form 10-K, under the heading “Part II. Item 1A. Risk Factors” in Gran Tierra’s Quarterly Reports on Form 10-Q and in the other reports and filings with the Securities and Exchange Commission.
All forward-looking statements speak only as of the date on which such statements are made, and Gran Tierra undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Gran Tierra’s forward-looking statements are expressly qualified in their entirety by this cautionary statement.
Investors are urged to consider closely the disclosures and risk factors in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and in the other reports and filings with the SEC, available from the Company’s offices or website. These forms can also be obtained from the SEC via the internet at www.sec.gov or by calling 1-800-SEC-0330.
For investor and media inquiries:
Gran Tierra Energy Inc.
President and Chief Executive Officer
Gran Tierra Energy Inc.
Chief Financial Officer
Gran Tierra Energy Inc.
Vice President of Investor Relations