Key Takeaways:
Gran Tierra Energy is exiting South America, handing its Colombia and Ecuador operations to France's Maurel & Prom in a $1.33 billion deal that leaves the Canadian producer debt-free with about $250 million in cash.
The transaction, announced Tuesday, transfers Gran Tierra Energy CI GmbH — the vehicle holding all of the company's Colombian and Ecuadorean assets — to the Paris-listed Maurel & Prom, which is 72.65 percent owned by PT Pertamina Internasional Eksplorasi dan Produksi, the international upstream arm of Indonesia's state energy company. The deal carries an economic effective date of March 31, 2026, and is targeted to close around Dec. 31, 2026, subject to Gran Tierra shareholder approval, creditor consents and regulatory sign-offs in both countries.
"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," Gary Guidry, president and chief executive of Gran Tierra, said in a statement.
The divested portfolio produced 29,026 barrels of oil per day on a working-interest basis in the first half of 2026 — 20,653 bopd in Colombia and 8,373 bopd in Ecuador — and holds 144 million barrels of certified 2P reserves as of Dec. 31, 2025, per McDaniel & Associates. The assets span the Middle Magdalena Valley, Putumayo and Llanos basins in Colombia and the Oriente Basin in Ecuador, anchored by the Acordionero, Costayaco and Moqueta fields on the Chaza block, the Suroriente block centered on Cohembi, and recently acquired interests in Tisquirama and San Roque.
A substantial portion of the consideration is satisfied through the rollover of Gran Tierra's debt instruments, including $582 million in senior notes outstanding as of June 30, 2026, and a $350 million prepayment facility with Trafigura. A $50 million deposit is payable on signing, with an additional $65 million due 364 days after closing as a loan note. After the assumption of liabilities and the redemption of its 7.750 percent notes due 2027, Gran Tierra expects net cash proceeds of roughly $315 million, of which about $250 million will be cash at closing.
The deal marks a deliberate repositioning for Gran Tierra, which began in 2024 with the acquisition of Canadian assets and the signing of an exploration, development and production sharing agreement for the onshore Guba-Khazaryani region in Azerbaijan. Following closing, the company intends to concentrate capital on its retained Canadian operations and Azerbaijan exploration, and to return a portion of proceeds to stockholders through a share repurchase whose size and terms the board will set separately. The continuing company expects to eliminate substantially all interest costs, saving about $80 million annually.
Gran Tierra estimates a pro-forma proved-developed-producing net asset value of $12.49 per share, an 83 percent premium to its 20-day volume-weighted average price of $6.825, with the net cash proceeds alone equating to $8.21 per share. The stock jumped more than 20 percent in early European trading Wednesday.
For Maurel & Prom, the acquisition establishes a leading operated platform in Latin America and marks its entry into Ecuador, complementing its return as an operator in Colombia following the January purchase of the Sinu-9 gas license. Chief executive Olivier de Langavant said the group sees a clear pathway to lift working-interest production from the acquired portfolio to around 40,000 bopd by 2029-2030. The buyer reported a net cash position of $257 million as of June 30, with $500 million in immediately available bank liquidity, and signed a $465 million, five-year refinancing on July 10 expected to generate about $250 million of additional liquidity.
BofA Securities is acting as lead financial adviser to Gran Tierra and rendered a fairness opinion, with RBC Capital Markets also advising and Bracewell LLP as legal counsel. Herbert Smith Freehills Kramer advised Maurel & Prom.
This article is for informational purposes only and does not constitute investment advice.
