(Press Release) Colombian private equity fund manager Tribeca Asset Management announced it has reached an agreement for the sale of its 50.2% stake in Petrolatina Energy, PELE, to Canadian E&P company Gran Tierra Energy, GTE, for a total cash consideration of US$264m, subject to closing adjustments.
The Canadian Company Gran Tierra Energy has agreed to buy 100% of the shares of Petrolatina for a cash consideration of US$525m.
Founded in 2004, PELE is a private, independent oil and gas exploration, development and production company with a long-term focus on, and commitment to, Latin America. With operations in Colombia, PELE has certified 2P (proven and probable) reserves of over 64 million barrels of oil, with a daily gross production of close to 7,000 barrels.
Shortly after investing in PELE in 2008, Tribeca started the execution of its “Tribeca Way”, an eight-step value creation methodology that in only 6 years led to a more than 10-fold increase in both the top line and the level of 2P reserves, and a more than 20-fold increase in daily net production. In addition to this, Tribeca’s involvement, through additional investments in operations and the introduction of best practices, also resulted in efficiencies that have allowed the company to maintain production costs below those of comparable companies in the Middle Mag Valley. In 2015, the company’s relatively low lifting cost of around US$4.2 per barrel, allowed it to maintain a profitable operation in an environment of rapidly declining oil prices.
Meanwhile, Gran Tierra Energy is an independent international energy company engaged in oil and gas acquisition, exploration, development and production, currently listed on the NYSE, and the Toronto Stock Exchange. With 2P reserves of around 76 million barrels of oil and a daily gross production of over 25,000 barrels, GTE has investments in energy companies in Colombia, Brazil and Peru and is currently expanding its operations in Colombia after the recent acquisitions of Petroamerica, Petrogranada, and now PELE.
At closing, Tribeca’s exit from PELE is expected to result in a multiple of invested capital, MOIC, of approximately 6.2x. The exit will also allow Tribeca to reach a MOIC for its Tribeca Fund I, where PELE is a portfolio company, of close to 2x, with still 3 more assets left in the fund. This transaction adds up to Tribeca’s successful exits in 2015 (OTCA, Bogotá Beer Company, TPL) and 2016 (City Parking).
“With this exit, which occurs as we celebrate Tribeca’s 10th anniversary, we continue to consolidate our track record of realized value of more than 2 times for each of our funds, validating our thesis that Colombia has been an attractive place to invest in Private Equity.
Funds over the past decade and that our value creation methodology has paid out. As we continue to build our pipeline for the next investments round we intend to leverage on our learnings”, concludes Luc Gerard, Founder and President of Tribeca Asset Management.