CALGARY - Gran Tierra Energy Inc. (TSX:GTE), a Calgary junior which focuses on oil and gas exploration and production in South America, says it has finalized a deal to acquire oil and gas interests in Brazil.
The company said Monday it will pay Alvorada Petroleo S.A. US$22.6 million and commit to drilling two wells in 2011 to acquire a 70 per cent working interest in several properties in the on-shore Reconcavo Basin in Brazil.
The transaction is subject to Gran Tierra obtaining regulatory approvals from the Brazilian government.
"This farm-in opportunity presents Gran Tierra Energy with a solid entry-point into Brazil, with new light oil reserves, production and exploration upside, including near-term drilling opportunities," Dana Coffield, president and CEO, said in a release before stock markets opened.
"Gran Tierra Energy continues to evaluate additional exploration and production opportunities in Brazil, with the intention of expanding our presence in Brazil's growing oil and gas sector."
Under terms of the agreement, Gran Tierra will become the operator of Blocks REC-T-129, -142, -155 and -224 and has committed to pay 100 per cent of the costs of drilling an exploration well on each of Blocks REC-T-129 and -142.
The exploration properties are located 70 kilometres northeast of Salvador, Brazil in the prolific Reconcavo Basin. This basin covers an 10,000 square kilometres and contains 129 oil and gas fields, and has produced over 1.5 billion barrels of oil to date.
Gran Tierra holds interests in producing and prospective properties in Argentina, Colombia, Peru, and Brazil.
