GRAN TIERRA ENERGY INC.

Current report

The Sale is subject to certain completion conditions and may not be completed as anticipated, or at all

Current report

The completion of the Sale is subject to a number of conditions, certain of which are outside of control of Gran Tierra and Purchaser, including certain regulatory approvals in Colombia and Ecuador. A substantial delay in obtaining the required regulatory approvals, or the imposition of unfavorable terms or conditions in connection with any such regulatory approvals, could delay completion and may adversely affect our business, financial condition or results of operations. There is no certainty, nor can we provide any assurance, that these conditions will be satisfied or, if satisfied, when they will be satisfied.

Current report

Each of Gran Tierra and Purchaser has the right to terminate the Share Purchase Agreement in certain circumstances. Accordingly, there is no certainty, nor can we provide any assurance, that the Share Purchase Agreement will not be terminated by either us or Purchaser before the completion of the Sale. For instance, Purchaser has the right, in certain circumstances, to terminate the Share Purchase Agreement following delivery of a notice regarding the occurrence of a material adverse change. There is no assurance that a material adverse change or material adverse effect or other termination event will not occur before completion, in which case we or Purchaser could elect to terminate the Share Purchase Agreement and the Sale would not proceed.

Current report

If, for any reason, the Sale is not completed or is materially delayed, there may be ongoing or additional uncertainty regarding us and our business, operations and assets, including with respect to our business segments not subject to the Sale (the “Retained Business”) and the retention of key personnel. If the Sale is not completed, there can be no assurance that another purchaser for the Divested Business will emerge or propose a transaction on terms acceptable to us. In addition, certain costs related to the Sale, such as legal, accounting and financial advisor fees, must be paid by us even if the Sale is not completed. Any of the foregoing circumstances or events may adversely affect the market price of our Common Stock.

Current report

The Sale and the other transactions contemplated by the Share Purchase Agreement, whether or not completed, may adversely affect the Retained Business.

Current report

Transactions such as the Sale are often subject to lawsuits by stockholders. It is possible that our stockholders or other stakeholders will commence or seek to commence litigation against Gran Tierra or our board of directors. Such litigation could result in substantial costs and divert management’s attention from other business concerns, which could adversely affect the Retained Business.

Current report

The Sale is dependent upon the satisfaction of various conditions, and as a result its completion is subject to uncertainty. In response to this uncertainty, our customers, suppliers, joint venture partners and other counterparties may delay or defer decisions concerning Gran Tierra and both our current and anticipated ongoing business, and may instead, where applicable, enter into material contracts or business arrangements with our competitors who are not faced with such uncertainty. Any change, delay or deferral of those decisions by our customers, suppliers, joint venture partners and other counterparties could negatively impact the business, operations and prospects of Gran Tierra, regardless of whether the Sale is ultimately completed. In addition, our ability to execute on our business strategies for the Retained Business depends on the retention and recruitment of qualified executives and other professionals. We rely upon the services of our current executive and senior management teams. The market for qualified executives, senior managers and other employees has become very competitive. As a result of the Sale, we may experience higher employee turnover and finding qualified replacements may be more difficult. Current and prospective employees of Gran Tierra may experience uncertainty about their future roles with Gran Tierra and its affiliates until completion of the Sale, which may adversely affect our ability to attract or retain key employees during the period until the Sale is completed and thereafter. The loss of the services of members of our executive and/or senior management teams or our inability to hire and retain other talented personnel could delay or prevent us from succeeding in executing our strategies for the Retained Business, which could negatively impact the Retained Business. Further, while the completion of the Sale is pending, we may be unable to attract and retain key personnel and our management’s focus and attention and employee resources may be diverted from operational matters.

Current report

If we fail to complete the Sale, our business and financial performance may be adversely affected

Current report

If the Sale is not completed, we may have difficulty recouping the costs incurred in connection with negotiating the Sale. Our directors, executive officers and other employees will have expended extensive time and effort and will have experienced significant distractions from their work during the pendency of the Sale, and we will have incurred significant third-party transaction costs, in each case, without any commensurate benefit, which may have a material and adverse effect on our stock price and results of operations.

Current report

Furthermore, if the Sale is not completed, the announcement of the termination of the Share Purchase Agreement may adversely affect our relationships with our customers, business partners, and employees, which could have a material adverse impact on our ability to effectively operate our business and could have further adverse effects on our business and results of operations and the trading price of our Common Stock.

Current report

If we fail to complete the Sale, there may not be any other offer from potential acquirers that the board of directors determines to be attractive

Current report

If we fail to complete the Sale, our board of directors, in discharging its fiduciary obligations to our stockholders, may evaluate other strategic alternatives including, but not limited to, continuing to operate the Divested Business for the foreseeable future or an alternative transaction relating to the Divested Business. An alternative transaction, if available, may yield lower consideration or value than the Sale, be on less favorable terms and conditions than those contained in the Share Purchase Agreement and involve significant delay. Any future sale of substantially all of Gran Tierra’s property and assets within the meaning of Section 271 of the DGCL and related case law or other similar transaction may be subject to further stockholder approval, and there is no guarantee that Gran Tierra would be able to obtain such stockholder approval in favor of any such sale or other transaction. If the Divested Business is not sold, there can be no assurance that we will realize value at least equivalent to the proceeds of the Sale from the operation of the Divested Business over time, or any value; nor can we predict the timeline for realizing value, if any, from the Divested Business in the absence of the Sale.

Current report

The Share Purchase Agreement exposes Gran Tierra to certain contingent liabilities following completion of the Sale

Current report

Under the Share Purchase Agreement, we agreed to indemnify Purchaser and its affiliates against losses arising out of specified matters, including pre-Completion corporate income tax assessments and audits, a specified ongoing Colombian tax proceeding, and a specified environmental proceeding. We will also indemnify Purchaser and the acquired entities for taxes arising from a pre-signing internal reorganization of one of our subsidiaries into the Divested Business and losses arising from indirect-transfer tax exposure and related successor-liability claims triggered by the transaction; these tax indemnities are not subject to the general liability limitations and will survive completion of the Sale until the applicable statute of limitations plus six months.

Current report

Significant indemnification claims by Purchaser or its affiliates under these provisions could result in material cash outflows by Gran Tierra following completion of the Sale and could have a material adverse effect on our financial condition, results of operations, cash flows and ability to redeploy the proceeds of the Sale as contemplated.

Current report

Following completion of the Sale, Gran Tierra’s business will be significantly different, less diversified and more concentrated

Current report

Completion of the Sale will result in a significant reduction of Gran Tierra’s current cash-generating business and assets. Following completion of the Sale, Gran Tierra will no longer operate or have any interests in Colombia or Ecuador, which currently represent a substantial portion of Gran Tierra’s revenues, production and operations. Gran Tierra’s remaining business will consist of its interests in Canada and Azerbaijan, and Gran Tierra will be significantly more reliant on the results of the Retained Business, will be less geographically and asset-diversified than prior to the Sale, and will be exposed to different business, regulatory, operational, fiscal and commodity-mix risks than those to which Gran Tierra was exposed prior to the Sale. The risks attributable to Gran Tierra’s remaining business and operations, and the significance of those risks, will be significantly different than prior to the Sale, and the risk factors relating to the Retained Business that are set forth or incorporated by reference in this Quarterly Report and in our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, may be magnified due to the reduced size, scope and diversity of Gran Tierra’s business following the Sale.

Current report

The amount and use of net proceeds from the Sale is uncertain

Current report

The amount of net proceeds ultimately available to Gran Tierra from the Sale is uncertain and will depend on a number of factors. These include the final purchase price after the adjustments contemplated by the Share Purchase Agreement. Net proceeds will also be affected by Gran Tierra’s transaction expenses (including legal, accounting and financial advisor fees), transaction-related taxes and tax indemnity exposure retained by Gran Tierra under the Share Purchase Agreement. The nature, timing and use of the net proceeds will be determined by the board of directors in its discretion.

Current report

The market price and trading volume of our Common Stock may materially decrease or experience increased volatility

Current report

The market price and trading volume of our Common Stock may materially decrease or experience increased volatility as a result of a variety of factors relating to the Sale, whether or not it is completed, and the Retained Business, including announcements of new developments pertaining to the Sale or Gran Tierra’s ongoing business and operations, the manner in which the net proceeds from the Sale are ultimately used, fluctuations in Gran Tierra’s operating results, failure to meet analysts’ expectations, public announcements made with respect to the Sale or Gran Tierra’s business, changes in the reserves, production or financial profile of the Retained Business, changes in commodity prices or general market conditions of the worldwide economy, and any determination by the board of directors to modify or discontinue Gran Tierra’s existing capital return practices in light of the reduced size of the business. There can be no assurance that the market price of our Common Stock will not materially decrease or experience significant fluctuations in the future, whether or not the Sale is completed, including fluctuations that are unrelated to the Sale and Gran Tierra’s performance. Furthermore, our Common Stock is listed on the NYSE American, the TSX and the London Stock Exchange (“LSE”) and the trading prices of our Common Stock on these three exchanges may at times differ due to a variety of factors, including factors related to the Sale. Any decrease in the price of our Common Stock on one of these exchanges could cause a decrease in the trading price of our Common Stock on another. Investors could seek to sell or buy our Common Stock to take advantage of any price differences between the markets through a practice referred to as arbitrage. Any arbitrage activity could create unexpected volatility in the trading prices on one exchange and our Common Stock available for trading on the other exchanges.