Table of Contents
- Gran Tierra’s acquisition of I3 Energy is part of efforts to diversify its operations
- I3 Energy has a significant presence in the Western Canadian Sedimentary Basin
Canadian oil producer Gran Tierra Energy has agreed to buy London-listed I3 Energy in a £174m deal.
Under the terms of the transaction, I3 Energy shareholders will receive around 10.4 pence for each share they hold, along with a dividend of 0.26 pence per share for the three months ending in September.
They will also be allowed to exchange 207 I3 Energy shares they own in exchange for one new Gran Tierra share.
Acquisition: Canadian oil producer Gran Tierra Energy has agreed to buy London-listed I3 Energy
Upon completion of the acquisition, I3 Energy investors will own up to 16.5 per cent of the Calgary-based business.
Gran Tierra’s acquisition of I3 Energy is part of its efforts to diversify its operations and create an “independent energy company of scale” in the Americas with “significant production, reserves, cash flows and development options.”
I3 Energy has a significant presence in the Western Canadian Sedimentary Basin, a major oil and gas producing region where the majority of Gran Tierra’s personnel have worked.
These assets are projected to produce between 18,000 and 19,000 barrels of oil equivalent per day this year.
Gary Guidry, president and CEO of Gran Tierra, said the deal “marks a significant milestone in diversifying our portfolio while strengthening our asset base.”
He added: “By integrating these high-quality operated assets, which include low-decline production, large resources in place and a substantial land base, we are not only enhancing our asset base, but also aligning with our long-term strategic vision.”
Gran Tierra considers its offer to be “fair and reasonable” and has no plans to increase it unless another party submits a more generous proposal.
The planned purchase of I3 Energy comes a week after the company reported its half-year results, which showed its revenue fell 20 per cent to £60.3m in the six months ending in June, while its profits fell 24 per cent to £8.4m.
Majid Shafiq, CEO of I3 Energy, said: “The acquisition represents the culmination of an exhaustive process to achieve the maximum value available to shareholders.”
He added: “This business combination will significantly improve scale, thereby enhancing the ability to drive growth, production and cash flows for the benefit of all shareholders and local stakeholders.”
I3 Energy shares rose 26.2 per cent to 12.2 pence by midday Tuesday, making them one of the biggest gainers on the FTSE All-Share index.
In recent years, foreign companies, taking advantage of low valuations, have acquired several large companies listed on the London Stock Exchange.
Among those who have submitted multi-billion-pound takeover bids this year are online trading platform Hargreaves Lansdown, cybersecurity specialist Darktrace and Robinsons squash owner Britvic.
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