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Gran Tierra Energy offloads Argentina operations to Madalena Energy

30th May 2014

Gran Tierra Energy has announced that Madalena Energy has agreed to buy Gran Tierra Energy’s Argentina business unit for an aggregate consideration of approximately USD 69m

Gran Tierra Energy offloads Argentina operations to Madalena Energy
'We are focusing Gran Tierra Energy’s human and capital resources in areas that we believe will provide the greatest return,' Coffield, Gran Tierra Energy CEO

Gran Tierra Energy has received a deposit of USD 12.6m and Madalena is expected to raise the remainder of the cash required to complete the transaction pursuant to a subscription receipt offering on a bought deal basis.

“The board of directors and management team of Gran Tierra Energy are committed to continuously managing its portfolio of opportunities in South America to enhance value for our shareholders,” said Dana Coffield, Gran Tierra Energy president and chief executive officer. “As a result of our recent significant exploration success in Peru, ongoing success in Colombia and ongoing evaluations in Brazil, we are focusing Gran Tierra Energy’s human and capital resources in areas that we believe will provide the greatest return for our shareholders and drive growth in the future.”

In 2013, the Argentina business unit contributed average annual production of 3,028 barrels of oil equivalent per day, net after royalty and spent USD 6.5m of its 2014 planned Argentina capital programme of USD 48m in the first quarter of 2014.

Gran Tierra Energy holds interests in 12 properties and is operator of 10 of these properties in the Noroeste and Neuquén Basins of Argentina. These holdings include both producing and prospective lands. Oil prices in Argentina are effectively regulated by a tax on exports, which provides a reference for prices within the country, but prices have been consistently rising over the last year.

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