Canadian-based, South America-focused oil and gas E&P company, Gran Tierra, said Thursday it has entered into an agreement to sell its Peruvian business to the U.S.’s PetroTal and Canada’s Sterling Resources, Kallanish Energy reports.
The sale and purchase agreement (SPA) announced is subject to a number of conditions and regulatory approvals. Among others, it includes a reverse take-over completion of Sterling by PetroTal. The two firms will be merged and the management and board of directors of Sterling will be reconstituted.
The potential transaction involves Gran Tierra Energy International Peru Holdings (GTEIPH) and would enable Gran Tierra (GTEIH) to focus primarily and mostly on its Colombian exploration and production operations. PetroTal would also need to complete a minimum $25 million equity financing.
Additionally, GTEIH could enter into a carried interest and option agreement with Sterling and a Peruvian subsidiary, pursuant to which GTEIH will be granted a 20% carried working interest in Block 107, located in the Ucayali basin in Peru.
Such interest could, at the option of GTEIH, either be converted to a non-carried working interest or be forfeited following the drilling of an exploration well in Block 107, Gran Tierra said.