Frontera Reports $97.2 Million USD in Earnings in the First Quarter

Frontera Energy Corporation (TSX: FEC) reported $97.2 million USD in quarterly earnings (operating EBITDA) earlier this month, an releasing the following comments from its key executives regarding the Candian oil company’s performance and upcoming outlook

Gabriel de Alba, chairman of the board of directors of Frontera Energy:

“Frontera’s focus remains centered on delivering on its strategic objectives and generating value for its stakeholders. Operationally, the company generated $97.2 million in quarterly Operating EBITDA, produced $25.7 million of Adjusted Infrastructure EBITDA, and maintained a robust balance sheet, finishing the quarter with a total cash balance of $182 million.

During the quarter, ODL declared a $157 million dividend ($54.9 million, net to Frontera), highlighting the strong cash generation capacity of this strategic infrastructure investment. The company also achieved an agreement in principle with Ecopetrol for the use of the company’s reverse osmosis water treatment facility (“SAARA”) under a two-year contract, a significant ESG and strategic milestone, for driving greater water disposal and crude oil production capacity at the Quifa block.

So far this year, the company has returned nearly $13 million of capital to our stakeholders, including $7.8 million in declared dividends, $4.1 million of common share repurchases and $1.5 million in buybacks of its 2028 unsecured notes. Moreover, the company, with support from Goldman Sachs, has launched a strategic alternatives process for its standalone and growing Colombian Infrastructure business, which may include a spin-off, a total or partial sale or other business combination.

The company will continue to consider future shareholder initiatives in 2024 and beyond, including potential additional dividends, distributions, or bond buybacks, based on the overall results of our businesses and the company’s strategic goals.”

Orlando Cabrales, chief executive officer of Frontera Energy:

“Frontera’s first quarter results were in-line with our expectations despite some unforeseen challenges. First quarter production declined approximately 3% on a quarter over quarter basis, impacted primarily by natural declines and well failures in our light and medium, and natural gas assets, temporary community blockades and delays related to strategic water disposal initiatives in the heavy oil assets partially offset by positive performance from our heavy oil assets.

Supported by another average daily production record at the CPE-6 block, we grew our heavy crude oil production during the quarter to approximately 23,400 bbls/d, a 2% increase over the prior quarter. Our heavy asset growth was driven primarily by higher field activity and investment as well as increasing oil production and water disposal capacity at both our Quifa and CPE-6 blocks and it could have been higher if community blockades and delays related to our strategic water disposal initiatives, including SAARA, had not taken place.

On the exploration side, we are excited about the spudding of our high impact Hydra-1 prospect on the VIM-1 block scheduled for June 2024.

We reiterate our production and capital guidance for 2024. Our 2024 drilling campaign started strong and continues to meet expectations. We expect improved production and profitability throughout the rest of the year as we advance our development portfolio in Colombia and Ecuador and increase water-handling infrastructure and facilities in CPE-6, as well as in Quifa after the agreement reached with Ecopetrol on SAARA.”

(Photo credit: Frontera Energy)