Frontera Energy Reports Full Year Earnings Up 117%

Frontera Energy Corporation (TSX:FEC) yesterday announced its fourth quarter and year end 2021 results, showing net income of $628.1 million USD after impairment reversals, a full year EBITDA of $373.2 Million, up 117% compared to 2020, and an average petroleum production of 37,818 BoeD.

In Colombia, Frontera’s daily production on March 1, 2022 was approximately 42,000 boe/d and the company’s year-to-date average to March 1, 2022 was approximately 40,500 boe/d.

Currently, Frontera has five drilling rigs and five workover rigs active at its Quifa, Coralillo, Corcel, Copa and Guaduas operations in Colombia and at the Perico block in Ecuador. In the fourth quarter of 2021, the company drilled 14 development wells including 12 at Quifa, and 2 at Guatiquia and completed 56 workovers and well services at Quifa, Guatiquia, Canaguaro, Abanico, Corcel, Cajua, Cravoviejo, Cubiro and Casimena. In 2021, the company drilled 42 producer wells, 3 injector wells and completed 148 workovers and well services.

“Frontera continues to deliver on its strategic, operational and financial objectives. In 2021, Frontera generated operating EBITDA of $373.2 million, an increase of 117% compared to 2020 and within the company’s tightened and increased full-year operating EBITDA guidance range. Frontera also averaged 37,818 boe/d, in-line with 2021 guidance. Frontera’s production costs averaged $11.46/boe and its transportation costs averaged $10.43/boe, both within 2021 guidance ranges. The company reported a year end cash position of $320.8 million and released approximately $105.6 million of restricted cash. Frontera increased its uncollateralized credit lines to $89.6 million at year-end and repurchased approximately 3.86 million common shares, or 7.4% of the public float, for cancellation for approximately $21.5 million under its current NCIB as of December 31, 2021,” said Chairman of the Board of Directors Gabriel de Alba.

Frontera Energy was once known as Pacific Rubiales

In 2021, Frontera implemented its “Building a Sustainable Future” ESG strategy and achieved 98% of its ESG goals for the year. The company neutralized 41% of its emissions through carbon credits and preserved and restored 765 new hectares of key connectivity corridors in Casanare and Meta Departments, Colombia. It was awarded the Equipares Gold Seal for the company’s commitment and efforts to close gender gaps in the workplace and in the communities where it operates, increased the purchase of local goods and services to $40 million, and recorded a total reportable incident rate of 1.70.

“Frontera delivered strong fourth quarter results. Production averaged 38,605 boe/d, up 6% compared to the previous quarter and the Company’s year-end production exit rate was 40,457 boe/d excluding Petrosud. Frontera’s daily production on March 1, 2022 was approximately 42,000 boe/d and the Company’s year-to-date average to March 1, 2022 is approximately 40,500 boe/d. Compared to the previous quarter, cash provided by operating activities in the fourth quarter increased by 43%, the Company’s operating netback increased 26%, the Company’s net sales realized price increased 17% and the Company’s transportation costs decreased 12%,” said Frontera CEO Orlando Cabrales.

He continued: “During the fourth quarter, Frontera began early production of ~2,400 boe/d (gross) at the La Belleza discovery on VIM-1, completed the Conciliation Agreement with Cenit and Bicentenario which eliminated more than $1 billion in contingent liabilities, acquired 100% of the issued and outstanding shares in Petroleos Sud Americanos S.A. which added ~1,300 boe/d production and signed an agreement to acquire the remaining 35% interest in el Dificil block held by PCR Investments S.A., adding an additional ~500 boe/d of production when the deal closes in the second half of 2022. Subsequent to year end, we discovered hydrocarbon bearing reservoirs in multiple formations at the Jandaya-1 exploration well in Ecuador and we were awarded Block VIM-46 in the 2021 Colombia Bid Round. Importantly, we discovered approximately 200 feet of net pay within multiple horizons at the company’s potentially transformational Kawa-1 exploration well, offshore Guyana.”

More details can be found in investor filings on Frontera’s website by clicking here.

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