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May 29, 2014
16:40 EDTGTEGran Tierra to sell Argentina business to Madalena Energy for $69M
Gran Tierra Energy announced it has entered into agreements whereby Madalena Energy has agreed to acquire Gran Tierra Energy's Argentina business unit for an aggregate consideration of approximately US$69M, comprised of US$49M in cash, US$14M in Madalena shares, and expected working capital adjustments of approximately US$6M. Gran Tierra Energy has received a deposit of US$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. In 2013, the Argentina business unit contributed average annual production of 3,028 barrels of oil equivalent per day, net after royalty and spent US$6.5M of its 2014 planned Argentina capital program of US$48M in the first quarter. "With the April 30, 2014 effective date of the transaction, Gran Tierra Energy plans to reduce its 2014 corporate capital spending program by an amount comparable to the planned Argentina capital program of US$48M, less the amount spent up to the closing date of the transaction. This reduction in corporate capital spending, in addition to the approximate US$69M aggregate consideration, will further strengthen the balance sheet for future capital spending requirements and allow us to dedicate our resources to where they will have maximum impact and to focus on our more profitable operations," concluded CEO Coffield. The Madalena board of directors has unanimously approved the Agreements. The closing date is expected to be on or before June 30 and it is subject to TSX Venture Exchange approval
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