CALGARY, Alberta - Gran Tierra Energy Inc. (NYSE American:NYSE:GTE) (TSX:GTE) (LSE:GTE), an international oil and gas exploration and production company, announced today that its acquisition of i3 Energy plc has been approved by i3 Energy’s shareholders. This development marks a significant milestone in the completion of the acquisition process, which is still subject to further regulatory approvals.
The approval by i3 Energy’s shareholders satisfies one of the necessary conditions for the acquisition’s finalization. However, Gran Tierra Energy awaits additional regulatory closing conditions that need to be met. The anticipated completion date for the acquisition is on or about October 31, 2024.
Gran Tierra Energy, with a portfolio of assets in Colombia and Ecuador, is looking to expand its international presence through strategic acquisitions such as this. The acquisition of i3 Energy, a company organized under the laws of England and Wales, is expected to further strengthen Gran Tierra’s asset portfolio.
The press release issued by Gran Tierra contains forward-looking statements, which are based on current management expectations and are subject to change. These statements include projections and assumptions about the acquisition and its completion. It is noted that these forward-looking statements involve known and unknown risks and uncertainties, and actual results may differ materially from those projected.
Investors and stakeholders in both companies are cautioned to consider the risks and uncertainties associated with such forward-looking statements. No assurance can be given that the projected outcomes will materialize as expected, and undue reliance should not be placed on these statements.
Gran Tierra Energy has not provided any additional details on the financial terms of the acquisition or the specific benefits it expects to derive from the transaction. The company's common stock is traded on the NYSE American, the Toronto Stock Exchange, and the London Stock Exchange.
This news article is based on a press release statement from Gran Tierra Energy Inc. and aims to provide a factual report on the current status of the acquisition process without speculation or endorsement of the claims made.
In other recent news, Gran Tierra Energy Inc. reported strong second quarter results for 2024, with a net income of $36 million, or $1.16 per share. The company's operating net back stood at $113 million, supported by oil sales of $166 million. Capital expenditures for the quarter were $61 million, leaving the company with a cash balance of $115 million and net debt of $521 million.
The company also announced plans to offer additional senior secured notes in a private placement to fund the acquisition of i3 Energy plc. The new issuance will be on the same terms as the existing ones, except for the issue date and price. They are expected to trade under the same CUSIP number post-settlement.
In addition, Gran Tierra reported a new oil discovery at the Bocachico Norte-J1 well in Ecuador, marking the company's fourth consecutive find in the region. The company has also reported stabilized production rates of 1,353 barrels of oil per day at the T-Sand oil zone. These recent developments are expected to contribute to production growth, reserve additions, and free cash flow for Gran Tierra in the coming years.
InvestingPro Insights
Gran Tierra Energy's acquisition of i3 Energy plc comes at a time when the company's financial metrics present a mixed picture. According to InvestingPro data, Gran Tierra has shown resilience with a 3.94% revenue growth in the last twelve months as of Q2 2024, reaching $658.05 million. This growth is complemented by a strong gross profit margin of 68.0%, indicating efficient cost management in its core operations.
However, investors should note that Gran Tierra's stock has experienced significant volatility. InvestingPro data reveals a 32.33% price decline over the past three months, which aligns with one of the InvestingPro Tips highlighting that the price has fallen significantly over this period. This recent downturn contrasts with the company's year-to-date performance, which shows a 19.15% price total return.
The acquisition strategy appears to be part of Gran Tierra's efforts to strengthen its position, potentially addressing some of the challenges indicated by InvestingPro Tips. For instance, one tip suggests that the company's short-term obligations exceed its liquid assets, which could be a motivating factor for expanding its asset base through acquisitions like i3 Energy.
Another relevant InvestingPro Tip indicates that analysts predict the company will be profitable this year, which may provide some confidence in Gran Tierra's financial outlook as it pursues this acquisition. This positive projection is supported by the company's profitability over the last twelve months.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights that could be valuable in assessing Gran Tierra's future prospects in light of this acquisition. There are 5 more InvestingPro Tips available for GTE, providing a deeper understanding of the company's financial health and market position.
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