Gran Tierra Energy Inc. announced the signing of an onshore exploration, development and production sharing agreement (EDPSA) for the Guba‑Khazaryani region in the Republic of Azerbaijan, giving the company a foothold in a country with a long history of oil and gas production and a supportive regulatory framework.
The EDPSA was executed through an indirect wholly owned subsidiary and grants Gran Tierra a 65% working interest and operatorship over approximately 0.4 million gross acres. The contract provides a five‑year exploration and appraisal period, followed by a 25‑year development window with a potential five‑year extension. The first three years focus on seismic acquisition and an airborne gravity study, while a second two‑year phase is earmarked for drilling.
Gran Tierra plans to launch the gravity study in 2026, conduct seismic acquisition and drill wells in 2027, and expects production to begin in the early 2030s. The contract area surrounds a structure that has already produced over 100 million barrels of oil and more than 200 billion cubic feet of natural gas, underscoring the proven nature of the basin.
Strategically, the agreement expands Gran Tierra’s portfolio beyond its existing operations in Canada, Colombia and Ecuador into a region that supplies European markets and offers proven hydrocarbon basins. Management highlighted the partnership with SOCAR as a key risk‑mitigation lever, noting that SOCAR’s integrated operations and regulatory support reduce political and operational exposure.
While the article does not include Gran Tierra’s financials, the company has been managing high debt levels and recent non‑cash impairment charges. The new agreement aligns with Gran Tierra’s strategy of pursuing risk‑mitigated, capital‑efficient growth and generating free cash flow.
The deal positions Gran Tierra to tap into Azerbaijan’s stable export infrastructure and European energy security, potentially enhancing its long‑term resource base and providing additional production opportunities as it transitions to a cash‑generating, multi‑basin operator.
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