Canadian oil and gas producer i3 Energy (TSX:ITE) has reached an agreement with Colombian producer Gran Tierra Energy (TSX:GTE) for an acquisition deal at a significant premium. This acquisition highlights the undervaluation of Gran Tierra Energy, especially considering its recent profitable growth.
As of 10:59 am ET, i3 Energy’s stock has increased by 23.53% trading at C$0.21 per share while Gran Tierra Energy’s stock has decreased by 7.93% trading at C$10.68 per share as of 11:06 am ET.
The acquisition terms include one Gran Tierra share for every 207 i3 Energy shares held, along with 10.43 pence in cash per i3 Energy share, denominated in consideration of the London Stock Exchange transaction.
This acquisition represents a 49% premium to the closing price on August 16, 2024, indicating significant value accretion for Gran Tierra Energy due to multiple promising factors:
– Increased diversification into Canada through i3 Energy’s operations in the Western Canadian Sedimentary Basin.
– Growth in proved reserves from 90 million boe to 177 million boe.
– Expansion in proved and probable reserves from 147 million boe to 322 million boe.
– i3 Energy’s consistent profitability over the last three years, with substantial net income figures.
– Expected 2024 EBITDA of i3 Energy and Gran Tierra Energy complementing each other for growth acceleration.
This strategic acquisition aligns with Gran Tierra Energy’s long-term goal of diversification into lucrative oil and gas basins to create shareholder value. The company sees the Western Canadian Sedimentary Basin as a top priority for its growth strategy.
Gran Tierra Energy has demonstrated a significant return year-over-year, outperforming the TSX index. Despite this positive performance, the stock remains undervalued, reflecting the company’s upward trends in key financial metrics over the past three years.
i3 Energy is an oil and gas company with operations in Canada’s Western Canadian Sedimentary Basin and significant potential in the North Sea. The stock shows positive growth trends over the past year and since 2020.
Gran Tierra Energy focuses on oil and natural gas exploration and production in Colombia and Ecuador. The company’s stock price has decreased but continues to be of interest in the market.
Please note that the information provided in this article is for informational purposes only and should not be considered as investment advice. For full disclaimer information, please refer to the relevant sources.
