Good morning and good afternoon. We are delighted to be giving this presentation to you today in relation to Gran Tierra's recommended cash and share acquisition of i3 Energy. We are really excited about the acquisition and expect the addition of i3 Energy to Gran Tierra will further enhance our already strong asset base in Colombia and Ecuador. Between Colombia, Ecuador, Canada, we expect to have strong, growing production base, exploration potential, and free cash flow for years to come. We hope this presentation leaves you as excited as we are about Gran Tierra's future. Given that there will be a number of i3 Energy shareholders listening to this webcast, we will start with a couple of introductions. My name is Gary Guidry, President and CEO of Gran Tierra.
I have been in the international exploration and production industry for over 40 years, working with assets in Latin America, North America, Africa, Middle East, and Asia. I have been with Gran Tierra since 2015, and previously acted as CEO for Caracal Energy PLC, which was listed on the London Stock Exchange, with operations in Chad until the $1.8 billion sale to Glencore in 2014. As well, previously leading companies with operations in Western Canada and the Middle East, North Africa region. I will now pass it over to Ryan Ellson for a quick introduction.
Hello, everyone. My name is Ryan Ellson, and I am the CFO and Executive Vice President of Finance of Gran Tierra. I also joined Gran Tierra in 2015 , having previously acted as Head of Finance for Glencore E&P Canada, and before that, I was the Vice President of Finance at Caracal.
We believe the acquisition of i3 Energy is a compelling transaction for both companies' shareholders, creating high quality and diverse business of scale with assets across Americas, the Americas, that can deliver sustainable growth for the benefit of all shareholders and stakeholders. For the past five years, we've been looking for opportunities at, in, for inorganic expansion across the globe, with Western Canadian Sedimentary Basin being a key area of interest, given the geology, asset base, and coupled with the experience of our operating in the region and our Calgary-based headquarters. Our search for inorganic growth has always been driven by underlying asset quality in basins that we want to operate in, and we think i3 has done a fantastic job at building a great asset base and operating team.
In addition to Gran Tierra's own working interest in 2P oil reserves of 147 million barrels of oil and 2,000 production guidance of 32,000-35,000 barrels of oil per day, i3 Energy's Canadian assets have a current 2P reserve of 175 million barrels of oil equivalent, a 2024 working interest production guidance of 18,000-19,000 BOEs per day, and also include a large portfolio of high quality, low risk, short cycle development opportunities. i3 Energy's production mix is approximately 50% natural gas, 25% oil, and 25% NGLs, while Gran Tierra's, its production is 100% oil priced off of Brent. The increased oil exposure significantly benefits i3 shareholders, with natural gas trading at less than CAD 1, while Brent is trading over $70.
The depressed natural gas prices sound concerning, however, we take a long-term outlook and are in this business for the long term. The assets are diverse in terms of location and commodity mix, bringing more of a balance to the enlarged Gran Tierra portfolio platform, which will enable the company to have more optionality and capital allocation going forward, and given the added exposure in an investment-grade country, coupled with scale and diversified cash flows, it is expected to improve the credit metrics of the business. To this end, Fitch, S&P, and Moody's have all revised Gran Tierra's credit outlook to positive from stable on the back of the announced transaction.
We do want to reiterate that when screening for assets across the world, the most fundamental key box that we check is asset quality, specifically geology, reserve base, fiscal terms, access to infrastructure, and growth potential. While diversification and scale are certainly benefits of this transaction, we are not looking to grow for the sake of growth. Any assets that we acquire need to compete with our recent success we've had in Ecuador and Colombia, and that really raised the bar for assets that we were looking at. This is a testament to the quality of i3 Energy and the main reason that why we are so excited about the acquisition. The large scale and financial strength of the combined group will allow Gran Tierra to accelerate the development of i3's asset base and enable Gran Tierra to optimize capital allocation across the enlarged portfolio.
We believe that the increased size of the group, including Gran Tierra's strong free cash flow profile, can accelerate the development of i3's asset base. The offer involved Gran Tierra acquiring 100% of i3 Energy for GBP 0.1043 per i3 share, plus one share of Gran Tierra for every 227 i3 shares, plus an acquisition dividend of GBP 0.002565 per share. This results in a pro forma ownership of Gran Tierra of up to 16.5% for i3 shareholders. As of the date of the Rule 2.7 announcement, the offer valued i3's equity at GBP 174 million, or $225 million, which represents a premium of 49% to the previous closing price.
I must be clear that we have made a binding, no increase statement as part of the firm offer, and as such, this offer represents our final terms. We are not capable of increasing our terms, subject to certain exceptions, as set out in the scheme document. We are pleased to have received an irrevocable support in favor of our offer from i3's largest shareholder, covering their entire shareholding with the best efforts commitment in relation to their derivative position, as well as a unanimous and irrevocable support of the directors of i3 Energy. The result is irrevocable support for the transaction of approximately 32.3% of i3's share register.
Additionally, we are delighted that both ISS and Glass Lewis, both leading proxy advisors, have announced their recommendations in the past few days in support of the transaction, which we think demonstrates the strength of our offer and the transaction rationale. The enlarged group will continue to trade on the New York Stock Exchange, the London Stock Exchange, and the Toronto Stock Exchange under the GTE ticker, and we believe the combination should provide increased liquidity for all shareholders across international markets. We believe that i3's Canadian team are great operators, and we intend to retain the team and will focus on the development of the Canadian asset base. We also look forward to gaining potential benefit from the both Gran Tierra and i3's in-depth knowledge of the industry experience being shared across a wide asset base following the integration of the two companies.
On timing, the scheme of arrangement document was published on the 29th of August, 2024 , with i3 shareholder and court meetings to be held on October the 7th. Subject to shareholder approval and receipt of the required regulatory Canada and U.K., we anticipate the scheme becoming effective in the fourth quarter of 2024 . I will then now hand over to Ryan to run through the summary of Gran Tierra following the acquisition, and importantly, provide some color on the assets of both companies.
As you can see, the post-acquisition Gran Tierra will be significantly larger and more diversified operating business. Based on Q2, 2024 production figures for both companies, Gran Tierra's geographic production split would be approximately 36% Canada, with the majority of the balance currently coming from Colombia, and a commodity mix that remains liquids weighted, but more balanced given the addition of i3's gas weighted production. Which provides both risk diversification benefits and growing optionality going forward. The combined business will have combined 2024 production guidance of more than 50,000 BOE per day, supported by a large base of reserves that underpin reserve valuations and offer significant upside potential from the large inventory of growth options across the group.
On the left-hand side is Gran Tierra's existing assets, with 100% operated conventional assets spanning 25 blocks across 1.4 million net acres in Colombia and Ecuador. A key advantage for Gran Tierra is that we are a 100% operator of all of our existing assets, which gives us flexibility in terms of capital allocation and allows us to rapidly respond to changes. Additionally, our conventional assets are all under waterflood, with the bulk of the capital expenditures already incurred, resulting in significant free cash flow to invest in development, appraisal, and exploration. The production from our existing assets is 100% oil, with attractive fiscal regimes consisting of a tax royalty structure, and with proceeds from oil sales received directly by the company in U.S. dollars.
In Colombia, the Acordionero is where a large percentage of our current reserves and production are, and the asset is a key cash generator, allowing us to reinvest proceeds from oil sales into the wider portfolio of growth opportunities. Ecuador is a key growth area for us, with five consecutive oil discoveries in the region, all of which are already on production, and there are significant opportunities across our wider South American portfolio to further develop assets and implement secondary recovery methods to maximize returns. i3's assets span four key areas in Alberta, in Central Alberta, Simonette, Wapiti, and Clearwater. The assets are 76% operated and provide base production cash flows with significant development optionality.
There are currently over two hundred and fifty net book drilling locations within the acreage, and a much larger inventory of unbooked locations, providing a large opportunity set of short cycle developments, which Gran Tierra will target with its increased scale and financial capacity. These development options have significant optionality and can be scaled up and down depending on commodity prices. In Colombia, near term, we will be continuing infill drilling across the Acordionero and Costayaco fields and commence development of the Suroriente field. In Ecuador, we'll continue the exploration and development of Charapa and Chanangue blocks, and in Canada, we'll focus on developing oil production in the Montney Simonette area, given the current commodity price environment. While we are relatively limited in what we can say prior to completion, we'll be finalizing our amended five-year development plan post-completion, and look forward to update the market on this accordingly.
I won't dwell on the next few slides, as these run through many of the same points previously discussed. However, slide 10 shows the increased diversity of what Gran Tierra will look like post-acquisition in terms of geographical footprint and volume mix, providing development optionality while maintaining a strong oil weighting. Slide 11 sets out Gran Tierra's post-acquisition production, which based on 2024 guidance from both companies, expected to be more than 50,000 BOE per day on a working interest basis, with the potential to substantially increase this as we look to accelerate development across the portfolio. Slide 12 sets out Gran Tierra's standalone EBITDA and free cash flow guidance for 2024.
As you can see, on a standalone basis, enhanced by the acquisition, post-acquisition, Gran Tierra will produce material cash flows that can be invested in development opportunities to expand production and grow shareholder returns across the enlarged portfolio. And finally, slide thirteen sets out the growth in reserves as a result of the combination, and importantly, the significant independently assessed NPV and valuation of Gran Tierra's combined assets on an after-tax basis. In summary, we see the acquisition of i3 Energy as an important step change in our growth. Adding diversity and scale in a high-quality oil and gas producing region with a strong asset base will result in Gran Tierra becoming a material oil well producer, with increased relevance to investors and significant upside potential, owing to the large inventory of development options, which can be funded through enhanced scale and balance sheet strength.
While synergies are never not the key driver of this acquisition, there will, of course, be some synergies through the reduction of duplicate listing and costs owing to consolidation of contracts following completion. More importantly for us, we see significant operational synergies in the form of the collaboration and sharing of significant expertise, both south and north bound, as we integrate the team into our wider operations. The offer values i3 Energy's equity at $225 million, of which $173 million will be paid in cash to shareholders of i3 Energy. The cash payment to shareholders will utilize $4 million of i3's cash balance sheet cash to fund the acquisition dividend, $70 million of cash from Gran Tierra's balance sheet, and the balance will be funded through new debt facilities.
Given the certain funds requirement in the U.K., we originally announced a transaction with support of a new financing facility with Trafigura. However, on the eighteenth of September, Gran Tierra announced the successful closing of an additional $150 million aggregate principal amount of its 9.5% senior secured amortizing notes with a 2029 maturity. The principal use of the funds from this bond tap will be used to fund the acquisition in replacement of the Trafigura facility. On the timetable, as previously mentioned, the shareholder meeting and initial court meeting is scheduled to occur on October seventh, and assuming approval, we expect the scheme of arrangement would become effective, delisting of i3 Energy shares and payment of the consideration in Q4 2024.
In summary, we are really excited about the opportunity that this transaction presents to both Gran Tierra and i3 Energy shareholders. We believe that post-acquisition, both entities will be stronger together and offer all shareholders fantastic prospects in a larger entity, with significant financial strength that can accelerate development across the enlarged portfolio. We believe that the transaction terms provide a cash premium for i3 Energy shareholders to the original share price on the 16th of August, 2024 , the day before the announcement, while providing significant upside potential through the ownership of a stronger combined entity. We, of course, are aware that commodity prices have softened since the transaction was first announced. Oil, the key driver for the standalone Gran Tierra business and relevant i3 liquids production, has reduced as a result of the softening demand outlook and supply factors.
In addition, Canadian gas prices, the key driver for a standalone i3 Energy business, have had significant reductions in expected forward pricing. We believe that this volatility only adds to the merits of the transaction for shareholders of both companies. By creating a larger business with a more diversified asset base and more access to capital, the combined group expects to generate material cash flow to support the long-term development and investment in the asset base throughout the commodity price cycle. The additional diversity will reduce the exposure to short-term commodity prices, price movements, and enable long-term investment through the cycles. With that, we will bring this presentation to a close. I would like to thank everyone for listening to this webcast, and hope it has been helpful to provide background on the transaction and to our business.
We look forward to moving forward together towards the completion of this transaction as soon as possible. Thank you.