Gran Tierra Energy Agrees To Sell Colombia, Ecuador Oil Business To Maurel & Prom For $1.3 Bln

(RTTNews) - Gran Tierra Energy Inc. (GTE), a company engaged in exploration and production of oil and gas, Wednesday announced that is has agreed to sell its oil business in Colombia and Ecuador to Maurel & Prom S.A, an oil and natural gas exploration and production company owned by PT Pertamina for $1.33 billion.

This transaction is the result of the Gran Tierra's continuous strategic portfolio review with an aim to step-change in the company's financial position and provides stockholders with a fully funded growth vehicle.

Gran Tierra is expected to use a portion of the net cash proceeds to return capital to stockholders through a share repurchase of the common shares of the company, with the balance proceeds used to fund the company's Canadian and Azerbaijan programs and for general corporate purposes.

"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.", commented Gary Guidry, Chief Executive Officer of Gran Tierra.

The continuing company is surmised to have an estimated Pro-Forma PDP Net Asset Value of around $12.49 per share, representing a premium of about 83 percent to Gran Tierra's 20-Day Volume Weighted Average Price.

On Tuesday, shares of Gran Tierra closed at $6.83, down 2.01% on the New York Stock Exchange.

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