Gran Tierra Energy Inc. (GTE) recently experienced a notable increase in its share value, climbing by 21.1% within a week. This upward movement was primarily fueled by two strategic developments: a significant new exploration agreement in Azerbaijan and the divestment of a non-core asset. These actions underscore the company's commitment to expanding its international presence while optimizing its operational portfolio for future growth.
The critical factor in Gran Tierra Energy's recent stock performance was the announcement of a landmark agreement with Azerbaijan's state oil company, SOCAR. This partnership focuses on the exploration and development of oil and natural gas reserves within Azerbaijan's resource-rich Guba-Khazaryani region. Under the terms of this deal, Gran Tierra Energy will hold a 65% working interest and assume operatorship of the contract area, which encompasses approximately 0.4 million gross acres. This expansion represents a substantial increase in GTE's acreage, more than doubling its current holdings in Ecuador, and signals a strategic entry into a new, established hydrocarbon province.
Company President and CEO, Gary Guidry, expressed considerable enthusiasm for this venture, highlighting Azerbaijan's supportive regulatory environment and well-developed infrastructure. He emphasized the region's long history of oil and gas production and its vital role in European energy security, aligning perfectly with Gran Tierra's strategy for capital-efficient and risk-mitigated growth. The company plans to initiate an airborne gravity study this year, with subsequent seismic acquisition and drilling activities projected to commence in 2027.
In addition to the Azerbaijan agreement, Gran Tierra Energy announced the sale of its remaining working interest in the Simonette asset, located in Alberta, to an undisclosed buyer for C$62.6 million. This transaction is anticipated to conclude in the first quarter of 2026, marking Gran Tierra's complete exit from the Simonette operations. This divestiture further refines the company's asset base, allowing for a more concentrated focus on its newly expanded international endeavors and other core projects.
These combined strategic maneuvers reflect Gran Tierra Energy's proactive approach to enhancing shareholder value and securing its position in the global energy market. The entry into Azerbaijan offers significant long-term growth potential in a stable and resource-rich jurisdiction, while the Simonette asset sale ensures efficient capital allocation and portfolio optimization.