Gran Tierra Energy Inc. Announces Closing of an Additional $150 Million Aggregate Principal Amount of its 9.500% Senior Secured Amortizing Notes due 2029

Rhea-AI Summary

Gran Tierra Energy Inc. (NYSE American:GTE)(TSX:GTE)(LSE:GTE) has successfully closed an additional $150 million offering of its 9.500% Senior Secured Amortizing Notes due 2029. This adds to the previously outstanding $587,590,000 aggregate principal amount of Original Notes. The new Notes share the same terms and provisions as the Original Notes, except for the issue date and price.

The company plans to use the net proceeds to finance the cash portion of the proposed acquisition of i3 Energy plc, a public company in England and Wales. Any remaining funds will be allocated for general corporate purposes, potentially including exploration development, debt repayment, working capital, or further acquisitions.

Positive

• Successfully raised $150 million through additional note offering
• Proceeds to be used for strategic acquisition of i3 Energy plc
• Potential for exploration development and debt repayment with remaining funds

Negative

• Increased debt burden with additional $150 million in notes
• Potential dilution of shareholder value through acquisition

Insights

Financial Analyst

Gran Tierra's successful issuance of an additional $150 million in senior secured notes demonstrates strong investor confidence in the company's financial position and growth prospects. The 9.500% interest rate is relatively high, reflecting the current market conditions and the company's risk profile. This additional capital infusion will provide Gran Tierra with increased financial flexibility to pursue its strategic objectives, including the proposed acquisition of i3 Energy plc.

The consolidation of these notes with the existing $587.59 million in outstanding notes under the same terms streamlines the company's debt structure. However, investors should monitor Gran Tierra's debt-to-equity ratio and ability to service this increased debt load, especially given the volatile nature of oil prices. The successful placement to qualified institutional buyers suggests a positive outlook from sophisticated investors, which is a good sign for retail shareholders.

Mergers and Acquisitions Specialist

The additional $150 million raised through this note offering is strategically timed to support Gran Tierra's proposed acquisition of i3 Energy plc. This move signals Gran Tierra's ambition to expand its portfolio and potentially diversify its asset base. The acquisition of a UK-based company could provide Gran Tierra with access to new markets and possibly North Sea assets, marking a significant shift from its current focus on South American operations.

Investors should pay close attention to the details of the i3 Energy acquisition as they emerge. Key factors to consider will be the valuation of i3 Energy, potential synergies between the two companies and how this acquisition fits into Gran Tierra's long-term growth strategy. The success of this deal will largely depend on Gran Tierra's ability to integrate i3 Energy's assets efficiently and realize value from the combined entity.

CALGARY, Alberta, Sept. 18, 2024 (GLOBE NEWSWIRE) --  Gran Tierra Energy Inc. (“Gran Tierra” or the “Company”) (NYSE American:GTE)(TSX:GTE)(LSE:GTE) today announced that it has completed its previously announced offering of an additional $150 million aggregate principal amount of its previously issued 9.500% Senior Secured Amortizing Notes due 2029 (the “Notes”) in a private placement to persons reasonably believed to be qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act, and pursuant to certain prospectus exemptions in Canada.

Gran Tierra previously had outstanding US$587,590,000 aggregate principal amount of 9.500% Senior Secured Amortizing Notes due 2029 (the “Original Notes”). The Notes have the same terms and provisions as the Original Notes, except for the issue date and the issue price, and form the same series as the Original Notes, including with respect to interest payments. The Notes are expected to trade under the same CUSIP number as the Original Notes, except that the Notes sold pursuant to Regulation S under the Securities Act have a different CUSIP number than the Original Notes until 40 days after the issue date of the Notes.

The Notes are guaranteed by certain subsidiaries of Gran Tierra. Gran Tierra intends to use the net proceeds from the offering to finance the cash portion of the consideration payable for the shares under the terms of the proposed acquisition of the entire issued and to be issued share capital of i3 Energy plc, a public limited company organized under the laws of England and Wales, and any remaining net proceeds from the offering for general corporate purposes, which may include additional capital to appraise and develop exploration discoveries, repayment of other indebtedness, working capital and/or acquisitions.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the Notes, nor shall there be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. The Notes will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws.

The offering was made, and the Notes were offered and issued, only (a) in the United States to investors who are reasonably believed to be “qualified institutional buyers” (as defined in Rule 144A under the Securities Act) in reliance upon the exemption from the registration requirements of the Securities Act, (b) outside the United States to investors who are persons other than “U.S. persons” (as defined in Rule 902 under the Securities Act) in reliance upon Regulation S under the Securities Act, and (c) pursuant to certain prospectus exemptions in Canada.

Cautionary Statement Regarding Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 or “forward-looking information” within the meaning of applicable Canadian securities laws. All statements other than statements of historical facts included in this press release, and those statements preceded by, followed by or that otherwise include the words “may,” “might,” “will,” “would,” “could,” “should,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “target,” “goal,” “guidance,” “budget,” “plan,” “objective,” “potential,” “seek,” or similar expressions or variations on these expressions are forward-looking statements. Gran Tierra can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct or that, even if correct, intervening circumstances will not occur to cause actual results to be different than expected. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. There are a number of risks, uncertainties and other important factors that could cause Gran Tierra’s actual results to differ materially from the forward-looking statements, including, but not limited to, statements related to Gran Tierra’s expectations regarding the use of proceeds of the offering and those factors set out in Part I, Item 1A, “Risk Factors” in Gran Tierra’s Annual Report on Form 10-K for the year ended December 31, 2023, and in Gran Tierra’s other filings with the U.S. Securities and Exchange Commission. Although Gran Tierra believes the expectations reflected in the forward-looking statements are reasonable, Gran Tierra cannot guarantee future results, level of activity, performance or achievements. Moreover, neither Gran Tierra nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. Investors should not rely upon forward-looking statements as predictions of future events. The information included herein is given as of the date of this press release and, except as otherwise required by the securities laws, Gran Tierra disclaims any obligation or undertaking to publicly release any updates or revisions to, or to withdraw, any forward-looking statement contained in this press release to reflect any change in Gran Tierra’s expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.

ABOUT GRAN TIERRA ENERGY INC.

Gran Tierra Energy Inc. together with its subsidiaries is an independent international energy company currently focused on international oil and natural gas exploration and production with assets currently in Colombia and Ecuador. The Company is currently developing its existing portfolio of assets in Colombia and Ecuador and will continue to pursue additional growth opportunities that would further strengthen the Company’s portfolio. The Company’s common stock trades on the NYSE American, the Toronto Stock Exchange and the London Stock Exchange under the ticker symbol GTE.

For investor and media inquiries please contact:
Gary Guidry, President & Chief Executive Officer
Ryan Ellson, Executive Vice President & Chief Financial Officer
+1-403-265-3221
info@grantierra.com

SOURCE Gran Tierra Energy Inc.

FAQ

What is the purpose of Gran Tierra Energy's (GTE) $150 million note offering?

Gran Tierra Energy (GTE) is using the proceeds primarily to finance the cash portion of its proposed acquisition of i3 Energy plc, with remaining funds allocated for general corporate purposes such as exploration development, debt repayment, or further acquisitions.

What are the terms of Gran Tierra Energy's (GTE) newly issued notes?

The newly issued notes by Gran Tierra Energy (GTE) are 9.500% Senior Secured Amortizing Notes due 2029, with the same terms and provisions as the Original Notes, except for the issue date and price.

How much debt did Gran Tierra Energy (GTE) have in Senior Secured Notes before this new offering?

Prior to the new offering, Gran Tierra Energy (GTE) had $587,590,000 in aggregate principal amount of 9.500% Senior Secured Amortizing Notes due 2029 outstanding.

What company is Gran Tierra Energy (GTE) planning to acquire with the new funds?

Gran Tierra Energy (GTE) is planning to use the funds to acquire i3 Energy plc, a public company organized under the laws of England and Wales.