In addition, Gran Tierra has initiated the closing of an acquisition/farm-in agreement in Argentina with Golden Oil Corp. Deutsche Bank Securities Inc. and Sanders Morris Harris acted as Placement Agents for the financing.
Argosy is an active oil producer and explorer in Colombia. The acquisition of the company is expected to add production of approximately 856 barrels of oil per day and proven reserves of 2.3 million barrels of oil to Gran Tierra (both net after royalty).
Argosy holds interests as an operator in two producing projects covering six fields as well as a total of five exploration blocks. It is currently drilling the Popa-1 prospect in the Rio Magdalena block.
Total consideration for the Argosy acquisition consisted of $37.5 million cash plus 870,647 shares of Gran Tierra's common stock, in addition to certain overriding and net profit interests in the acquired assets valued at $1 million.
Gran Tierra's acquisition of a 50% interest in the El Vinalar Block in Argentina from Golden Oil is expected to add approximately 44 barrels per day of oil production (after royalty) and positions the company for a drilling program to commence later this year. Total consideration for the acquisition is $950,000 and includes a commitment to fund up to $2.7 million of the cost of a planned sidetrack well.
Gran Tierra also reported that documentation for a third acquisition of producing and prospective assets of Compania General de Combustibles S.A. (CGC) in Argentina, for a total purchase price of $37.8 million, is nearing completion. Closing for this transaction is scheduled on or before July 31 and is subject to certain authorizations, including the waiving of rights of first refusal of partners and regulatory, legal/judicial approvals within Argentina.
The private placement of securities of the Company provided total proceeds of $65,004,076 based on the issuance of 43,336,051 units consisting of one common share plus one warrant to purchase one-half share. The offering was conducted pursuant to the exemption from the registration requirements of the federal securities laws provided by the Securities Act of 1933 (as amended).
Proceeds from the financing have been used to close the Argosy and Vinalar acquisitions, and are earmarked for the pending CGC acquisitions and for drilling and work programs across all acquired properties. Gran Tierra intends to supplement its equity financing with a committed debt facility of $25 million.
"Gran Tierra is, today, entering a new chapter in its history," said Dana Coffield, Gran Tierra's president and CEO. "We have concluded two important transactions and are ready for a third. We have resources in place for an aggressive work program. We are positioned for growth in three countries. We have achieved our objectives for our first year as a company, and we are ready for the challenges and rewards that are ahead."
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