Gran Tierra to Acquire WCSB-Focused i3 Energy
Gran Tierra Energy, Inc. is acquiring i3 Energy plc for an implied value of approximately $225.4 million (GBP 174.1 million).
Gran Tierra said the acquisition will create “an independent energy company of scale in the Americas with significant production, reserves, cash flows and development optionality”.
i3 Energy is an independent oil and gas company with a diverse, full-cycle portfolio of assets in the Western Canadian Sedimentary Basin (WCSB) and UK North Sea (UKN). Its registered office is in Eastleigh, United Kingdom, and it has an office located in Calgary in Canada, where the majority of its employees are based and where its operational plans are formulated and executed.
i3 Energy’s Canadian acreage spans four key regions in some of the WCSB’s most economic play types, including Central Alberta, Simonette, Wapiti and Clearwater. The assets are 76 percent operated with production from approximately 850 net long-life, low-risk and low-decline wells, spanning approximately 600,000 net acres. These four core areas combined delivered 18,271 barrels of oil equivalent of production (boepd) in the second quarter.
i3 Energy has announced 2024 working interest production of 18,000 to 19,000 boepd from its Canadian assets with exit rate guidance of 20,250 to 21,250 boepd, while Gran Tierra has announced 2024 production guidance of 32,000 to 35,000 barrels of oil per day, according to the release.
Further, i3 Energy has over 250 net booked drilling locations (374 gross booked drilling locations) associated with 2P reserves which, coupled with Gran Tierra’s substantial booked reserves, recent exploration discoveries and significant prospective acreage across Colombia and Ecuador, provides development and exploration upside potential for shareholders, Gran Tierra noted.
Under the terms of the acquisition, each i3 Energy shareholder will be entitled to receive one new Gran Tierra Share for every 207 i3 Energy Shares held and 10.43 pence cash per i3 Energy Share. In addition, each i3 Energy Shareholder will be entitled to receive a cash dividend of 0.2565 pence per i3 Energy Share in lieu of the ordinary dividend in respect of the three-month period ending September 30, 2024.
Upon completion of the acquisition, i3 Energy shareholders will own up to 16.5 percent of Gran Tierra. Gran Tierra will transfer the entire issued share capital of i3 Energy to its wholly owned, indirect subsidiary, Gran Tierra EIH. Gran Tierra EIH is the holding entity for Gran Tierra’s Colombian assets.
Upon completion, i3 Energy shares will be cancelled from trading on the AIM market of the London Stock Exchange and delisted from the TSX, Gran Tierra said.
Over the last five years, Gran Tierra said it has “looked to diversify into specific oil and gas basins where it is confident it can create shareholder value focused on operated, high-quality assets with large resources in place and access to infrastructure,” with the WCSB being one of the basins on its priority list.
Gary Guidry, President and CEO of Gran Tierra, said, “We are thrilled to announce this acquisition, which marks a significant milestone in diversifying our portfolio while strengthening our asset base. By integrating these high-quality, operated assets, including low-decline production, large resources in place and a substantial land base, we are not only enhancing our asset base but also aligning with our long-term strategic vision. We are excited to welcome the talented Canadian team to our company, as their expertise and dedication will be invaluable in driving our continued success. This acquisition is a testament to our commitment to sustainable and profitable growth and delivering consistent value to our shareholders”.
Majid Shafiq, CEO of i3 Energy, said, “We believe that the acquisition presents an exceptional opportunity for i3 Energy’s Shareholders. The acquisition represents the culmination of a thorough process to realize the maximum value available for shareholders and offers significant upside potential; it expedites the realization of fair value, with a cash premium and incremental upside through continued ownership in the Combined Group, without necessitating additional capital investment, time, or operational risk. This business combination will significantly enhance scale, thereby improving capacity to drive growth, production, and cash flows for the benefit of all shareholders and local stakeholders”.
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