Gran Tierra Energy signs agreement to sell Brazilian business for $35m

Oil and gas company Gran Tierra Energy has entered an agreement with Maha Energy to sell its Brazilian business unit for $35m.

Under the agreement, Maha Energy will purchase the business unit by acquiring all equity interests in one of Gran Tierra's indirect subsidiaries, and certain debt owed by the corporate entities, including Gran Tierra's Brazilian business unit, to the Gran Tierra group of companies.

After the completion of this divestiture, Maha Energy will secure all Gran Tierra's assets in Brazil, including full working interest in the Tiê Field and all other interests of Gran Tierra in exploration rights and obligations held due to concession agreements granted by the Agência Nacional do Petróleo, Gás Natural e Biocombustíveis of Brazil (ANP).

The deal is subject to customary closing conditions, including Maha Energy obtaining necessary financing and the regulatory approval from the ANP.

Under the deal, Maha Energy needs to deposit $3.5m by 9 February. This initial amount is non-refundable even if Maha Energy fails to obtain full financing for this acquisition.

The transaction is expected to close on or before 1 August, when Gran Tierra will continue to operate its Brazilian business unit.

Headquartered at Calgary in Canada, Gran Tierra focuses on its assets in the South American country of Colombia.

Gran Tierra considers that this Brazilian divestiture will help it to focus on its Colombian exploration and operations.