Gran Tierra signs Azerbaijan exploration agreement, moves to exit Simonette
Gran Tierra Energy Inc. signed an exploration, development, and production sharing agreement with the State Oil Company of the Republic of Azerbaijan (SOCAR) on a prospective onshore field in Azerbaijan, while also moving to exit its Simonette asset through a signed sale agreement.
Under the terms of the SOCAR agreement, Gran Tierra Energy will act as the operator of the in the Guba-Caspian region project with a 65% stake.
The contract area surrounds a 65-km-long structure that has produced more than 100 million bbl of oil and more than 200 bcf of natural gas, “underscoring the scale and quality of the petroleum system in Azerbaijan,” Gran Tierra said in a release Feb. 19.
The EDPSA includes a 5-year exploration and appraisal phase, and 25 years for development of any economic discoveries, with potential to extend development an additional 5 years.
The exploration period consists of an initial 3-year phase followed by a second 2-year phase. The initial phase includes acquisition of a gravity study, together with a commitment to drill two wells and acquire 250 sq km of 3D seismic.
Upon completion of the initial phase, the company has the option to proceed into the second phase, which carries a further commitment to drill two wells and acquire an additional 250 sq km of 3D seismic.
Gran Tierra expects begin an airborne gravity study this year, with seismic acquisition and drilling activities planned to begin in 2027.
The EDPSA remains subject to certain customary and legal conditions, including approval by the legislature of the Republic of Azerbaijan and other legal formalities and procedures.
Simonette exit
The same day, the company noted an agreement with an undisclosed buyer to sell its remaining working interest in the Simonette asset in Alberta for total cash consideration of $62.5 million (Can.). The company in late 2024 sold a 50% stake in its Simonette Montney assets to Logan Energy Corp.
The newly announced deal, expected to close in first-quarter 2026, would complete Gran Tierra’s exit from Simonette.
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Mikaila Adams has 20 years of experience as an editor, most of which has been centered on the oil and gas industry. She enjoyed 12 years focused on the business/finance side of the industry as an editor for Oil & Gas Journal's sister publication, Oil & Gas Financial Journal (OGFJ). After OGFJ ceased publication in 2017, she joined Oil & Gas Journal and was later named Managing Editor - News. Her role has expanded into content strategy. She holds a degree from Texas Tech University.