Canadian energy company Gran Tierra Energy Inc. will acquire PetroLatina Energy Ltd. for $525 million USD. According to the company, this will add 53 million barrels of oil reserves reserves to its portfolio, the bulk of which is located in the conventional oil field of Acordionero in the Middle Magdalena Basin. PetroLatina discovered the field in 2013.
Four wells currently exist in Acordionero, per the company, and it expects to drill another 16 production wells, plus five water-injection wells, by the end of 2018. Overall, Gran Tierra is expanding its holdings by nearly 80,000 acres, and the firm says that, as part of a “developing play trend,” it is currently evaluating unconventional resources exploration in the included La Luna and Rosa Blanca formations.
“The acquisition represents a unique material opportunity in Colombia in terms of scale and upside potential, and will add a new core area for Gran Tierra in the prolific Middle Magdalena Basin,” said Gary Guidry, Gran Tierra’s president and CEO.
“The combination of Gran Tierra’s strong, positive cash-flowing asset base and PetroLatina’s attractive portfolio of development opportunities will create a premier, Colombia-focused exploration and production company.”
This is Gran Tierra’s third big purchase in Colombia this year, following the Calgary-based firm’s January acquisitions of Petroamerica Oil Corp. and PetroGrenada Ltd. The company has a market cap of $1.1 billion with onshore gas and oil properties in Colombia, Brazil, and Peru.
The news was viewed favorably by the majority of Press Telegraph analysts, with two-thirds giving the company’s stock a buy rating. The positive outlook follows good returns over the past year. “Gran Tierra Energy Inc. has risen 30.3% since November 25, 2015, and is uptrending,” according to the Press Telegraph analysis. “It has outperformed, by 29.7%, the S&P 500.”
Tribeca Asset Management held a 50.2% stake in PetroLatina and will receive a cash consideration of $264 million, according to PE Hub. The Bogotá-based private equity fund has recently exited high-profile deals, including national craft beer franchise Bogotá Beer Company and Colombian parking lot giant City Parking.
“With this exit, which occurs as we celebrate Tribeca’s 10th anniversary, we continue to consolidate our track record of realized value of more than two times for each of our funds, validating our thesis that Colombia has been an attractive place to invest in private equity Funds over the past decade,” said Luc Gerard, founder and president of Tribeca Asset Management.