| Gran Tierra Energy (GTE-T) plans to sell its Argentine operations for $63-million (U.S.) in cash and shares to Madalena Energy (MVN-V). For Gran Tierra, the sale allows it to focus on its highly productive assets in Colombia and its high-potential assets in Peru and Brazil. For Madalena, the acquisition triples its production to 4,900 barrels of oil equivalent a day from 1,600. Most of its current production comes from its Ostracod oil assets in the Paddle River area of Alberta, but it is producing a few hundred barrels a day from Argentina, mainly from the CAN.xr-2(h) well on the Coiron Amargo block in the Neuquen basin. The block is divided into two parts: Coiron Amargo Norte, where Madelana drills for conventional Sierras Blancas oil, and Coiron Amargo Sur, where it looks for Vaca Muerta shale. CAN.xr-2(h) is in the northern part. Gran Tierra's assets, which are not prospective for Vaca Muerta shale, are in the Neuquen basin and the Noroeste basin to the north. The market seems more excited about the latter basin, specifically the Proa-3 well, which hit about 20 metres of net pay earlier this year but has yet to be tested. It is a follow-up to the Proa-2 well, which hit 31 metres of net pay in 2012 before testing at 6,300 barrels of oil a day. |
