Gran Tierra Continues to Build Asset Base in Argentina
Gran Tierra Energy is continuing to build its asset base in Argentina with the announcement of an agreement with Golden Oil Corporation to acquire a 50% interest in the El Vinalar Block in the Noroeste Basin of Argentina. This acquisition is expected to add a significant new land position and approximately 50 barrels of oil production net before royalties to Gran Tierra. Gran Tierra's share of production in Argentina for 2005 averaged 330 barrels per day (net before royalty).
El Vinalar encompasses 1,005 gross square kilometers (248,341 acres) and contains a portfolio of exploration leads and oil field enhancement opportunities. Total consideration for the acquisition is US$ 0.95 million plus the funding of up to US$2.70 million in a planned drilling program. The transaction is subject to standard closing conditions including the execution of mutually acceptable agreements on or before April 30, 2006.
This acquisition adds further to Gran Tierra's production and land position in the Noroeste basin, where the company has been selectively acquiring assets since September 2005. The Vinalar agreement augments the announcement of a $37.8 million acquisition agreement with Compania General de Combustibles S.A. (CGC) on February 22 (also subject to standard closing conditions including the execution of mutually acceptable agreements, in addition to preferential acquisition rights of partners in certain properties). The successful closing of the CGC and Golden Oil acquisitions will increase Gran Tierra's production to over 1,600 barrels of oil equivalent per day (on a price basis, net before royalties) and expand the company's opportunity inventory via a participation in 6,100 gross square kilometers (1.55 million acres) of land for future drilling.
Dana Coffield, Gran Tierra's President and CEO, stated, "Growth in the petroleum industry is fundamentally driven by drilling success, which requires access to prospective land. We continue to pursue niche opportunities, like El Vinalar, and strategic opportunities, like our acquisition of the CGC properties, to provide cashflow and a portfolio of drilling opportunities for our company. It's a building block approach to value creation, and it's an approach that we intend to continue."
Gran Tierra Energy, Inc. is an international oil and gas exploration and
production company, headquartered in Calgary, Canada, incorporated and traded
in the United States and operating in South America. The Company currently
holds interests in producing and non-producing properties in Argentina and is
pursuing a growth strategy that focuses on establishing a portfolio of
producing properties, and development and exploration opportunities, by
selective acquisitions, to provide a base for future growth.
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