Gran Tierra Vitality Inc. has reported a seventh oil discovery in Ecuador, which it mentioned confirmed the “vital potential” of the Arawana/Zabaleta subject space.
The Calgary, Alberta-based firm mentioned that its Zabaleta-K1 nicely is the fourth exploration nicely drilled within the Chanangue Block, based on a latest information launch.
The profitable Zabaleta take a look at “additional validates the confirmed Basal Tena geological mannequin 4 kilometers [2.5 miles] away from Arawana-J1 and helps the numerous potential of the Arawana/Zabaleta productive pattern,” it added.
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Gran Tierra mentioned it has run manufacturing casing, cemented and perforated the Basal Tena oil zone and has begun manufacturing testing. The rig was moved to drill the Zabaleta Oeste exploration nicely which was spud on November 21, marking the achievement of the ultimate exploration dedication within the Chanangue block.
Gran Tierra President and CEO Gary Guidry mentioned, “The success of this nicely solidifies Gran Tierra’s understanding of the sector space and will likely be a key pillar of improvement development plans in South America for years to return”.
Additional, Gran Tierra is divesting 50 % and operatorship of a portion of its Simonette Montney property for about $37.11 million (CAD 52 million) in money, to Logan Vitality Corp., topic to customary changes.
After the closing of the transaction, Gran Tierra will retain 50 % working curiosity within the property, which embody roughly 25 web sections of Simonette Montney lands with 0.8 million barrels of oil equal (mmboe) of Proved Developed Producing (PDP) reserves, 3.9 mmboe of Proved (1P) reserves and 13.8 mmboe of (2P) reserves, in every case, as of July 31, 2024.
The transaction supplies a growth-focused platform to advance Gran Tierra’s Montney improvement and is aligned with the corporate’s company technique of long-term worth creation, it mentioned. The closing of the transaction is anticipated to happen by the tip of 2024, topic to the satisfaction of customary closing circumstances.
The overall consideration from Logan contains carried improvement of the primary Simonette nicely drilled within the Decrease Montney area for estimated non-cash proceeds of CAD 3 million web to Gran Tierra. On account of the transaction, Gran Tierra mentioned it expects to speed up 2 wells on the 1-24 pad within the Simonette Montney space into the fourth quarter, which have been initially anticipated to be drilled within the first quarter of 2026.
“We’re additionally thrilled to announce the sale of a portion of our curiosity within the Simonette Montney play whereas conserving a cloth stake in its future development. This strategic partnership with a top-tier operator, who already has established infrastructure within the space, will considerably speed up improvement and generate near-term money stream. We intend to make use of a portion of the proceeds to ship worth to our shareholders by means of improvement of different key property within the portfolio and share buybacks, whereas additionally strengthening our steadiness sheet by decreasing web debt. We’re additionally happy to monetize by diluting half of our curiosity in one of many property just lately acquired within the i3 Vitality acquisition by promoting roughly 4 % of manufacturing, and 1P reserves we acquired for about 19 % of whole consideration whereas nonetheless sustaining materials curiosity and worth within the property. This transaction validates Gran Tierra’s place as a top-tier development targeted mid-cap E&P firm,” Guidry mentioned.
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