Calgary-based Gran Tierra Energy has reached an agreement to acquire i3 Energy in a deal valued at $225.4 million.

In the deal, Gran Tierra will acquire the entire issued and to be issued share capital of i3 Energy, an independent oil and gas company with assets and operations in the U.K. and Canada’s Western Canadian Sedimentary Basin, Gran Tierra said Aug. 19 in a press release.

The deal comes as Gran Tierra looks to diversify its portfolio with assets in basins the company believes can “create shareholder value focused on operated, high-quality assets with large resources in place and access to infrastructure,” Gran Tierra said.

And, Gran Tierra said the Western Canadian Sedimentary Basin is on the top of its priority list.

Gran Tierra’s deal with i3 will create an independent company with significant production, reserves, cash flows and development optionality.

For 2024, i3 Energy has guided working interest production of 18,000 boe/d to 19,000 boe/d from its Canadian assets with exit rate guidance of 20,250 boe/d to 21,250 boe/d. Gran Tierra has estimated 2024 production to average 32,000 bbl/d to  35,000 bbl/d of oil.

i3 Energy reported proven (1P) working interest reserves of 88 MMboe and proven and probable reserves (2P) working interest reserves of 175 MMboe as of July 31. As of Dec. 31, 2023, Gran Tierra said its 1P working interest reserves were 90 MMboe and 2P working interest reserves of 147 MMboe.

i3 Energy’s full-year 2024 EBITDA guidance was $50 million to $55 million after considering hedges. For its part, Gran Tierra has announced full year 2024 EBITDA guidance of $335 million–$395 million (using a $70/bbl Brent price), $400 million and $460 million (using a $80/bbl Brent price), and $480 million to $540 million at $90/bbl Brent price.

i3 Energy has more than 250 net booked drilling locations (374 gross booked drilling locations) associated with its 2P reserves. When coupled with Gran Tierra’s booked reserves, recent exploration discoveries and significant prospective acreage across Colombia and Ecuador, these locations provide development and exploration upside potential to shareholders, Gran Tierra said.