CALGARY, Alberta – November 14, 2008 – Gran Tierra Energy Inc. (AMEX: GTE; TSX: GTE) and Solana Resources Limited (TSX-V: SOR; AIM: SORL)today announced that they have completed the business combination of Gran Tierra and Solana.
The boards of directors and the stockholders of both companies approved the transaction, and all other regulatory and court approval requirements were satisfied. Pursuant to the terms of the arrangement agreement announced July 29, 2008, each Solana shareholder received either (i) 0.9527918 of a common share of Gran Tierra or (ii) 0.9527918 of a common share of Gran Tierra Exchangeco, Inc., a Canadian subsidiary of Gran Tierra (an "Exchangeable Share") for each common share of Solana held. The Exchangeable Shares: (i) have the same voting rights, dividend entitlements and other attributes as Gran Tierra common stock; (ii) are exchangeable, at each shareholder's option, on a one-for-one basis, into Gran Tierra common stock; and (iii) will be listed on the Toronto Stock Exchange on or about November 19, 2008 in accordance with the Toronto Stock Exchange conditional approval. The Exchangeable Shares will automatically be exchanged for Gran Tierra common stock five years from closing, and in certain other events. The business combination will be accounted for as an acquisition and the combined company has approximately 263.1 million shares outstanding (on a diluted basis).
Following closing of the business combination, Gran Tierra has become an intermediate-sized producer with the following attributes:
current production in excess of 11,600 barrels of oil equivalent per day (boe/d);
estimated 2008 exit production in excess of 15,000 boe/d;
working interest in 26 contract areas, 24 operated by Gran Tierra;
an undeveloped land base of over 1.5 million net acres in Colombia, 1.3 million net acres in Argentina and 3.4 million net acres in Peru;
an extensive inventory of both exploration and development drilling prospects for potential future growth; and,
a 100% working interest in the Costayaco Field, one of the largest light oil discoveries in recent years in Colombia.
The combined company has cash on hand in excess of US$140 million and no long-term debt. With its strong balance sheet, Gran Tierra believes that it is well positioned for ongoing exploration and development work in its core areas and for future growth.
"This is another milestone in the growth of our company," commented Dana Coffield, President and Chief Executive Officer of Gran Tierra. "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. We have assembled a world-class team of experienced international professionals with diverse skills and abilities that is focused on delivering superior financial performance and value creation for our shareholders," Coffield concluded.
Mr. J. Scott Price, President and Chief Executive Officer of Solana, added, "With a solid asset base, increasing production, strong drilling prospects and no debt, the combined company is well positioned for growth."
Pursuant to the terms of the Arrangement Agreement and as announced on October 22, 2008, Solana has applied for suspension of its common shares from trading on AIM with effect from 8:00 am (London time) on November 17, 2008, and cancellation of the admission of Solana common shares on AIM to take effect from 8:00 am (London time) on November 18, 2008. Solana has also applied to have the Solana common shares delisted from the TSX Venture Exchange effective November 17, 2008. Application will also be made to cause Solana to cease to be a reporting issuer for the purposes of Canadian securities laws.
About Gran Tierra Energy Inc.
Gran Tierra is an international oil and gas exploration and production company operating in South America, headquartered in Calgary, Canada and is incorporated in the United States. The company holds interests in producing and prospective properties in Colombia, Argentina and Peru. The company has a strategy that focuses on growing a portfolio of producing properties, plus production enhancement and exploration opportunities to provide a base for future growth. Gran Tierra trades on the American Stock Exchange under the symbol "GTE" and on the Toronto Stock Exchange under the symbol "GTE".
Additional information concerning Gran Tierra is available at www.grantierra.com , on SEDAR (www.sedar.com) and with the Securities and Exchange Commission (www.sec.gov).
About Solana Resources Limited
Solana is an international resource company engaged in the acquisition, exploration, development and production of oil and natural gas. The company's properties are located in Colombia, South America and are held through its wholly owned subsidiary, Solana Petroleum Exploration (Colombia) Limited. The Company is headquartered in Calgary, Alberta, Canada.
Additional information concerning Solana is available at www.solanaresources.com and on SEDAR (www.sedar.com)
Forward Looking Statements
The statements in this press release regarding Gran Tierra Energy's estimated 2008 exit production rate, its belief that it is well positioned for future growth and that it continues to strengthen its balance sheet, expand its drilling portfolio, and continues to grow its reserves and production, its expectations regarding the benefits of the combination with Solana, and the quality of its drilling prospects are "forward-looking statements" within the meaning of the U.S. federal and Canadian securities laws, including Canadian Securities Administrators' National Instrument 51-102 Continuous Disclosure Obligations and the U.S. Private Securities Litigation Reform Act of 1995. The press release also includes information that has not been reviewed by the independent auditors of Gran Tierra or Solana.
The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: the risk that unexpected transportation or other issues, such as guerilla activity that has occurred sporadically in Colombia, will prevent the combined company from realizing its expected 2008 year end exit production rate; the risk that the businesses will not be integrated successfully, or that the integration will be more difficult than expected, which could divert management's attention from the growth aspects of the business; the risk that the cost savings and any revenue synergies from the plan of arrangement may not be fully realized or may take longer to realize than expected; and disruption from the transaction may make it more difficult to maintain relationships with regulatory agencies, employees or suppliers, which would harm its ability to conduct the business efficiently and successfully.
Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the periodic reports filed by Gran Tierra with the Securities and Exchange Commission, including in the section entitled "Risk Factors" in its Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 6, 2008, and available at the Securities and Exchange Commission's internet site www.sec.gov and on SEDAR at www.sedar.com, as well as Solana's continuous disclosure documents filed on Solana's SEDAR profile at www.sedar.com.
All forward-looking statements in this press release are expressly qualified by information contained in each company's filings with regulatory authorities and, subject to its obligations under applicable securities laws, Gran Tierra does not undertake to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.