Gran Tierra Energy to acquire PetroLatina Energy for $525M in cash
Friday, July 01, 2016 08:07:47 AM (GMT)
- PetroLatina is a private, independent exploration and production company with assets primarily in the Middle Magdalena basin of Colombia.
- The consideration will consist of an initial payment of $500M at closing, subject to closing adjustments, and a deferred payment of $25M prior to 31-Dec-16.
- The Acquisition is expected to be funded through a combination of:
- Gran Tierra's current cash balance,
- available borrowings under Gran Tierra's existing credit facilities,
- a new $130M debt facility,
- and a private placement of up to $173.5M of subscription receipts priced at $3.00 per Subscription Receipt entitling each holder thereof to one share of common stock in the capital of the Corporation .
- Transaction highlights:
- Expected PetroLatina H2/2016 WI before royalties 2P average daily production of 5,400 bopd
- 2017: 8,600 bopd
- 2018: 14,800 bopd
- Long term free cash flow generation and attractive pro forma operating netbacks of approximately $30/bbl
- Accretive on a per share basis to Gran Tierra's production, reserves and net asset value
- Expected cost savings from operational synergies and efficiencies
- Combined company work program is expected to be self-funding for at least the next five years
- PetroLatina estimated WI 2P reserves: 53 MMbbl
- The Acquisition has been unanimously approved by the board of Gran Tierra. The Acquisition agreement was entered into among an indirect subsidiary of the company, PetroLatina and three key shareholders of PetroLatina that hold more than 80% of the shares of PetroLatina. The Acquisition is also subject to customary closing conditions, including, among other things, any required regulatory approval, and is expected to close prior to 31-Oct-16.
- Scotia Waterous acted as lead financial advisor and RBC Capital Markets also served as a financial advisor to Gran Tierra in connection with the Acquisition.