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UPDATE 1-Gran Tierra signs farm-in deal with Brazil's Alvorada
August 30, 2010 / 10:56 AM / 7 years ago

UPDATE 1-Gran Tierra signs farm-in deal with Brazil's Alvorada

* Says to pay Alvorada Petrolea $22.6 mln

* Says to get 70 pct working interest in Reconcavo Basin

* Says continues to explore to expand presence in Brazil

Aug 30 (Reuters) - Canada’s Gran Tierra Energy (GTE.TO), which is focused on oil and gas exploration in South America, said it will pay $22.6 million to Brazil’s Alvorada Petroleo, to get a majority working interest in the on-shore Reconcavo Basin.

Under the farm-in deal, Gran Tierra said it will also drill two wells in 2011, to become the operator of Belo Horizonte-based Alvorada’s four blocks, and will finance all the costs to drill an exploration well on two of these blocks.

These blocks are located near Salvador in Brazil in the Reconcavo Basin, which contains 129 oil and gas fields, and has produced over 1.5 billion barrels of oil to date, Gran Tierra said in a statement. Gran Tierra expects to drill additional wells, and said this discovery currently has unaudited estimated recoverable resources of 6 million barrels of oil.

The Calgary-based firm said it continues to evaluate additional exploration and production opportunities to expand its presence in Brazil’s growing oil and gas sector.

Shares of the company, which have gained about 14 percent in the past three months, closed at C$6.45 Friday on the Toronto Stock Exchange. (Reporting by Gowri Jayakumar in Bangalore; Editing by Jarshad Kakkrakandy)

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