Gran Tierra Sells Latin American Assets, Pivots to Canada
The oil producer expects the divestiture to yield about $315 million in net cash proceeds.
Gran Tierra Energy (GTE) agreed to sell all its Colombia and Ecuador assets for $1.33 billion, recasting the oil producer around Canadian production and exploration in Azerbaijan.
The transaction marked a sharp turn from Gran Tierra’s first-quarter plan, which centered on operations across Canada, Colombia and Ecuador. Pro-forma production is expected to fall to 12,000 to 13,000 barrels of oil equivalent a day from prior 2026 guidance of 40,000 to 45,000 boepd, reflecting the sale of assets that produced about 29,000 barrels of oil a day during the first half.
Colombia had remained central to the company’s outlook as recently as May, when Gran Tierra added the Tisquirama block and projected Colombian production of 20,000 to 23,000 boepd. The transaction covers all the company’s Colombian assets.
The divested Colombia and Ecuador business generated $306.2 million of adjusted earnings before interest, taxes, depreciation and amortization in the 12 months ended June 30. That valued the transaction at about 4.3 times the business’s trailing adjusted EBITDA.
Gran Tierra expects to receive about $250 million in cash at closing and a $65 million note due 364 days later. The resulting proceeds would compare with the $125 million cash balance reported at the end of the first quarter, after the company paid down $133 million of debt.
The company expects to become debt-free at closing through the buyer’s assumption of substantially all net liabilities and the redemption of its remaining 2027 notes. Eliminating substantially all debt is expected to save about $80 million a year in interest expense, compared with the May guidance assumption of $5 to $6 a barrel of oil equivalent.
The retained business is expected to hold roughly 86 million barrels of oil equivalent in proved-plus-probable reserves and more than 500,000 net acres. Gran Tierra plans to direct capital toward a fully financed growth program in Canada and Azerbaijan, replacing its May plan for $130 million to $170 million of capital spending and $95 million to $115 million of free cash flow.
Gran Tierra also said it could use part of the proceeds to repurchase shares. The size and terms remain undetermined, and any buyback depends on the transaction closing and stockholder approval.