Shares of Calgary-based Gran Tierra Energy (TSX: T.GTE, Stock Forum) climbed more than 19% to $3.25 Monday after the company and Solana Resources (TSX: V.SOR, Stock Forum) announced after Friday’s market close that they have completed their business combination.
Gran Tierra says that both the boards of directors and the stockholders of both companies approved the transaction, and all other regulatory and court approval requirements were satisfied.
According to the agreement, which was originally announced on July 29, each Solana shareholder received either 0.9527918 of a common share of Gran Tierra or 0.9527918 of a common share of the company’s subsidiary Gran Tierra Exchange co for each Solana share. Solana has applied to have its common shares delisted from the TSX Venture Exchange effective November 17.
Following the closing of the business combination, Gran Tierra says it has become an intermediate-sized producer with current production in excess of 11,600 barrels of oil equivalent per day and estimated 2008 exit production in excess of 15,000 boe/d. The combined company has cash on hand in excess of $140 million and no long-term debt.
"In today's economic environment, the combination of Gran Tierra Energy and Solana Resources makes tremendous sense as we continue to strengthen our balance sheet, expand our drilling portfolio, and continue to grow our reserves and production, transforming Gran Tierra Energy into a premier intermediate oil and gas exploration and production company,” said Dana Coffield, president and chief executive officer of Gran Tierra.
