Gran Tierra Energy Inc. Announces Granting of Exemptive Relief Regarding its Normal Course Issuer Bid

Rhea-AI Summary

Gran Tierra Energy Inc. announces an exemption order from Canadian securities regulators allowing the purchase of up to 10% of its public float of common stock through U.S. Markets as part of normal course issuer bids.

Insights

Financial Analyst

A company's decision to repurchase its own shares is a significant financial move that can influence investor perception and the company's capital structure. Gran Tierra Energy Inc.'s announcement of an exemption order allowing it to buy back up to 10% of its public float is an aggressive expansion from the typical 5% limit. This move suggests Gran Tierra's management believes the shares are undervalued and that the buyback could enhance shareholder value. It also indicates a strong balance sheet, as share repurchases are often executed using excess cash reserves.

Investors should note that while buybacks can increase earnings per share (EPS) by reducing the number of shares outstanding, they also decrease the company's cash reserves, which could have been used for other growth opportunities or to pay down debt. Additionally, the focus on U.S. Markets for the buyback where most of Gran Tierra's trading volume occurs, aligns the buyback with the majority of its investor base. This strategy can potentially lead to a positive impact on the stock price on the NYSE American due to increased demand and reduced supply of shares.

Market Research Analyst

The exemption order obtained by Gran Tierra to extend its share buyback program on U.S. Markets can be interpreted as a strategic move to capitalize on the liquidity and trading volume in these markets. A substantial majority of Gran Tierra's Shares are traded through the U.S. Markets, which means that executing the buyback program there could lead to a more efficient and impactful process. It's important to analyze the market conditions when the buyback occurs, as the timing can significantly affect the buyback's success and the stock's performance.

Furthermore, the condition that purchases must be made at a price not higher than the market price ensures that the buyback will not artificially inflate the stock price. This aligns the buyback with shareholder interests by potentially providing a floor for the stock price, without pushing it to an unjustifiable premium. Market participants should monitor the actual execution of this buyback strategy, as it can offer insights into the company's market sentiment and its commitment to returning value to shareholders.

Legal Expert

The legal framework surrounding share buybacks is complex, involving various regulatory bodies and rules. Gran Tierra's exemption order from Canadian securities regulators and adherence to multiple sets of rules, including the TSX rules and National Instrument 23-101 - Trading Rules, demonstrates compliance with stringent regulatory requirements. This compliance is crucial for maintaining investor confidence and avoiding potential legal pitfalls.

The fact that the exemption is conditional upon purchases being made in compliance with applicable U.S. rules is also significant. It ensures that Gran Tierra's actions will be closely monitored and that the buyback will be conducted in a manner that is fair and transparent to all market participants. Stakeholders should appreciate that such legal compliance can help safeguard against market manipulation and protect the integrity of the investment process.

CALGARY, Alberta, Feb. 20, 2024 (GLOBE NEWSWIRE) -- Gran Tierra Energy Inc. (“Gran Tierra”) (NYSE American: GTE)(TSX: GTE)(LSE: GTE), today announces that it has obtained an exemption order from the Canadian securities regulators which permits Gran Tierra to purchase up to 10% of its “public float” (within the meaning of the rules of the Toronto Stock Exchange (the “TSX”)) of shares of common stock (the “Shares”) through the NYSE American (the “NYSE”) and other trading systems based in the United States (together with the NYSE, the “U.S. Markets”) as part of Gran Tierra’s normal course issuer bids announced on October 31, 2023. Absent this exemptive relief, Gran Tierra’s purchases under a normal course issuer bid on markets other than the TSX would be limited to not more than 5% of its outstanding Shares over any 12-month period. A substantial majority of the trading volume of Gran Tierra’s Shares occurs through the U.S. Markets.

The exemptive relief is applicable to purchases of Shares completed within 36 months of the February 12, 2024 date of the exemption order, and includes purchases made under Gran Tierra’s current normal course issuer bid and any other normal course issuer bid in effect within such period and is conditional upon, among other things, purchases being made in compliance with applicable U.S. rules, the TSX rules applicable to a normal course issuer bid, National Instrument 23-101 - Trading Rules, and at a price not higher than the market price at the time of purchase. The aggregate number of Shares purchased by Gran Tierra over any exchange or market over the relevant 12-month period of a particular normal course issuer bid may not exceed 10% of the public float as specified in Gran Tierra’s notice accepted by the TSX in respect of the relevant normal course issuer bid, including the current bid announced on October 31, 2023.

About Gran Tierra Energy Inc.

Gran Tierra Energy Inc. together with its subsidiaries is an independent international energy company currently focused on oil and natural gas exploration and production in Colombia and Ecuador. Gran Tierra is currently developing its existing portfolio of assets in Colombia and Ecuador and will continue to pursue additional growth opportunities that would further strengthen Gran Tierra’s portfolio. Gran Tierra’s common stock trades on the NYSE American, the Toronto Stock Exchange and the London Stock Exchange under the ticker symbol GTE. Additional information concerning Gran Tierra is available at www.grantierra.com. Information on Gran Tierra does not constitute a part of this press release. Investor inquiries may be directed to info@grantierra.com or (403) 265-3221.

Gran Tierra’s U.S. Securities and Exchange Commission (“SEC”) filings are available on the SEC website at www.sec.gov. Gran Tierra’s Canadian securities regulatory filings are available on SEDAR at www.sedar.com and UK regulatory filings are available on the National Storage Mechanism (the “NSM”) website at https://data.fca.org.uk/#/nsm/nationalstoragemechanism. Gran Tierra’s filings on the SEC, SEDAR and NSM websites are not incorporated by reference into this press release.

Contact Information:

For investor and media inquiries please contact:

Gary Guidry
President & Chief Executive Officer

Ryan Ellson
Executive Vice President & Chief Financial Officer

Rodger Trimble
Vice President, Investor Relations

+1-403-265-3221
info@grantierra.com

FAQ

What exemption order did Gran Tierra Energy Inc. obtain?

Gran Tierra Energy Inc. obtained an exemption order from Canadian securities regulators.

What percentage of its public float is Gran Tierra Energy Inc. permitted to purchase?

Gran Tierra Energy Inc. is permitted to purchase up to 10% of its public float.

Through which markets can Gran Tierra Energy Inc. make the purchases?

Gran Tierra Energy Inc. can make purchases through the U.S. Markets.

What is the time limit for completing the purchases under the exemption order?

The purchases must be completed within 36 months of the February 12, 2024 date of the exemption order.

What conditions must be met for the purchases to be made?

The purchases must comply with applicable U.S. rules, TSX rules, and National Instrument 23-101 - Trading Rules, and be at a price not higher than the market price at the time of purchase.