Gran Tierra Energy enters crude oil prepayment deal with Trafigura for up to $200 million

Gran Tierra Energy Inc. (NYSE American:GTE) announced Wednesday that its wholly owned subsidiary, Gran Tierra Energy Colombia GmbH, has entered into a crude oil sale and purchase agreement with Trafigura PTE Ltd., including a prepayment addendum that provides for advances of up to $200 million.

According to a statement based on a recent SEC filing, the agreement, executed Friday, allows Gran Tierra Energy Colombia GmbH to receive an initial advance of up to $150 million and an additional advance of up to $50 million, subject to certain conditions. The funds will be repaid through deliveries of Oriente crude oil over a four-year period.

Under the prepayment addendum, Gran Tierra Energy Colombia GmbH is required to use the proceeds to repay borrowings under its existing Credit and Guaranty Agreement, finance the repurchase of all or part of its outstanding senior notes, or fund capital expenditures for assets in Ecuador.

The agreement includes financial covenants that require the subsidiary to maintain an asset coverage ratio of at least 150% and a debt service coverage ratio of at least 200%, tested semi-annually and upon certain other events. Gran Tierra Energy Inc. is serving as guarantor for its subsidiary’s obligations under the prepayment arrangement.

In connection with the new agreements, Gran Tierra Energy Inc., its subsidiary, certain indirect subsidiaries, lenders including Trafigura, and GLAS USA LLC as administrative agent, amended the existing Credit and Guaranty Agreement. The amendment reduces the borrowing base to $60 million and requires the subsidiary to prepay outstanding loans to reduce the principal to no more than $20 million by the earlier of the first disbursement under the prepayment addendum or January 23, 2026. As of Wednesday, the outstanding balance under the credit agreement was $34.5 million.

The crude oil agreements and amendments are governed by English law. The company’s common stock is listed on the NYSE American, Toronto Stock Exchange, and London Stock Exchange under the ticker GTE.

All information is based on a press release statement included in the company’s SEC filing.

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