CALGARY, Alberta - Gran Tierra Energy Inc. (NYSE American:NYSE:GTE)(TSX:GTE)(LSE:GTE) has reported a seventh oil discovery in Ecuador and a strategic joint venture with Logan Energy Corp. (TSXV:LGN), aimed at developing Canadian oil assets. The company's recent success in the Arawana / Zabaleta field area in Ecuador and its partnership with Logan Energy are expected to bolster its growth strategy and value creation.
The new oil discovery at the Zabaleta-K1 well in Ecuador is the latest in a series of successes for Gran Tierra in the region, further confirming the area's potential. The well, drilled 4 kilometers from the Arawana-J1 well, produced at stabilized rates of 1,105 barrels of oil per day. President and CEO Gary Guidry emphasized that this discovery solidifies the company's development plans in South America.
In Canada, Gran Tierra has entered into a purchase and sale agreement with Logan Energy Corp., where Logan will acquire a 50% interest and operatorship of a portion of Gran Tierra's Simonette Montney assets for approximately C$52 million in cash, subject to adjustments. The transaction, which includes the sale of about 4 percent of production and 1P reserves acquired in the i3 Energy acquisition, is seen as a validation of Gran Tierra's growth-focused strategy.
The partnership with Logan Energy, a leading Montney operator with established infrastructure, is set to accelerate the development of the Simonette assets, moving drilling from the first quarter of 2026 to the fourth quarter of 2024. Gran Tierra retains a 50% working interest in the assets, which include significant reserves and are valued at C$122.3 million for Proved plus Probable reserves by GLJ Ltd.
Gran Tierra plans to use proceeds from the transaction to invest in other key assets, share buybacks, and to strengthen its balance sheet. The joint venture also provides priority access to Logan's infrastructure, which will facilitate cost savings and expedite the timeline for asset development.
The deal is expected to close by the end of 2024, with customary closing conditions. The agreement includes a cash consideration from Logan and a carried development of the first Simonette well in the Lower Montney region, valued at $3 million net to Gran Tierra.
This news article is based on a press release statement.
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