Gran Tierra Energy has completed the acquisition of Colombian-based exploration and production company PetroLatina Energy in a previously agreed deal worth $525m.

Both companies have reached an agreement to this effect in July this year.

Under the agreed terms, Gran Tierra will initially pay $500m at the closing of the deal, while PetroLatina will receive the remaining $25m by the end of December this year.

PetroLatina has assets primarily in the Middle Magdalena basin of Colombia, which contains the Acordionero conventional oil field discovered by the company in 2013.

"We are pleased that the acquisition has closed quickly and we now look forward to developing the upside potential in our new core area in the prolific Middle Magdalena Basin."

Acordionero consists of nearly 90% of PetroLatina's total working interest (WI) 2P reserves of 53 million barrels.

As of 31 May this year, one discovery exploration well and three follow-up appraisal wells have been drilled in the field.

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Gran Tierra president and CEO Gary Guidry said: "We are pleased that the acquisition has closed quickly and we now look forward to developing the upside potential in our new core area in the prolific Middle Magdalena Basin.

“We have acquired significant proved, probable and possible reserves, which we expect to enhance our long-term growth strategy and to be an excellent fit with Gran Tierra's current reserves and resources base in the Putumayo Basin."

With this acquisition, Gran Tierra will gain complementary acreage positions in the Middle Magdalena basin, Llanos basin and Putumayo basin and also add 469,000 WI acres across the Colombian portfolio.

The deal will allow Gran Tierra to improve its land position in the Putumayo basin by increasing its WI in the PUT-4 Block from 70% to 100% WI, as well as adding the 100% WI PUT-25 block.

It was funded through a combination of cash on hand, borrowings under Gran Tierra's existing credit facilities, a new term loan, and proceeds of a private placement of the company's subscription receipts.