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The Canadian Press - ONLINE EDITION

Gran Tierra selling Argentine unit for aggregate US$69M to Madalena Energy

CALGARY - Gran Tierra Energy Inc. (TSX:GTE) says it has agreed to sell its Argentina business unit to Madalena Energy Inc. (TSXV:MVN) for an aggregate US$69 million.

The purchase price includes US$49 million in cash and US$14 million in Madalena shares and expected working capital adjustments of US$6 million, Gran Tierra said in a statement issued after markets closed Thursday.

Gran Tierra Energy has received a deposit of US$12.6 million and Madalena is expected to raise the remainder of the cash in a subscription receipt offering on a bought deal basis.

"The board of directors and management team of Gran Tierra Energy are committed to continuously managing its portfolio of opportunities in South America to enhance value for our shareholders," Gran Tierra president and CEO Dana Coffield said.

"As a result of our recent significant exploration success in Peru, ongoing success in Colombia and ongoing evaluations in Brazil, we are focusing Gran Tierra Energy's human and capital resources in areas that we believe will provide the greatest return for our shareholders and drive growth in the future."

Calgary-based Gran Tierra is an international oil and gas exploration and production company focused on South America.

Madalena, also based in Calgary, is domestic and international upstream oil and gas company whose main business activities include exploration, development and production of crude oil, natural gas liquids and natural gas focused in Argentina and the Greater Paddle River area of west-central Alberta.

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