Frontera Energy Completes Reorganization of Colombian Operations and Projects Higher Production Figures
Canadian oil company Frontera Energy (TSE: FEC) has been working to stabilize and improve its operations in recent years, and this week it completed the reorganization of its Colombian business units.
All of the Toronto-based firm’s Colombian operations are now held by the Colombian branch of Meta Petroleum Corporation, a wholly owned subsidiary of Frontera Energy. The reorganization was intended to streamline operations and “eliminate legal entity redundancies,” according to Frontera Energy.
Given the expectations of adding more output, Frontera Energy says that it projects production of up to 75,000 barrels of oil equivalent per day.
In addition to the structural changes, the company announced that other operational developments and expected production gains will push its overall output to around 75,000 barrels per day, according to an internal projection.
The company noted that it is seeing gains from the horizontal drilling it completed at its Quifa field in Colombia, where new wells are now delivering “close to 300 barrels per day of heavy oil, nearly double the rate of legacy horizontal locations on the field.”
Frontera Energy is currently testing the results of Alligator-1X, a recently completed exploration well that discovered oil in three reservoir zones.
The company also announced the following developments within Colombia: “The anticipated startup of a waterflood pressure maintenance project on the Copa field, drilling currently underway related to the implementation of a waterflood pressure maintenance project on the Guatiquia block, and continued success on the vertical well drilling program at Quifa and Cajua where new vertical wells are delivering approximately 130 barrels per day of heavy oil, and adding either new 2P reserve locations or drilling outside the existing 2P boundary of the field.”
READ MORE: Frontera Energy Adds Richard Herbert to Board and Promotes Three New VPs
In a larger operational update, Frontera Energy announced that it has been working to improve its situation in Peru, where the company has been “working with local indigenous groups and PetroPeru to establish framework agreements” to restart full production on its “Block 192” holding where a blockade by the community was lifted on October 31.
Those efforts, say the company, allowed production to recommence in early December. Current oil production on the block has reached more than 5,000 barrels per day “with the goal of increasing oil production to between 6,000 barrels per day and 8,000 barrels per day, net to the company after royalties and internal consumption, before the end of the year.”
In all, the company has raised its production, “after royalties and internal consumption,” to more than 66,500 barrels of oil equivalent per day. Given the expectations of adding more production in the company’s Quifa field and Ardilla field holdings in Colombia, as well as increased output in Peru, Frontera Energy says that it projects production of up to 75,000 barrels of oil equivalent per day.
On the financial front, Fontera Energy said in a statement that it “has already exceeded the high end of Operating EBITDA guidance of $300 million USD to $350 million USD, with over $360 million USD of operating EBITDA in the 11-month period ending November 30.” It added that the firm expects to finish “towards the low end” of its capital expenditure projection of $250 million USD to $300 million USD.