Frontera Energy Corporation (TSX: FEC) (OTCQX: FECCF) reported first-quarter 2026 net income from continuing operations of $13.1 million USD and adjusted EBITDA of $28.5 million USD, as the Calgary-based company moves to close the sale of its Colombian exploration and production portfolio to Parex Resources Inc. (TSX: PXT) and reposition itself as a standalone Colombian infrastructure company anchored by its pipeline and port assets.

Total revenues from continuing operations were $26.8 million USD in the first quarter, compared with $26.9 million USD in the fourth quarter of 2025 and $25.1 million USD in the first quarter of 2025. Net loss for the period, including discontinued operations, was $15.4 million USD, reflecting a $28.5 million USD net loss from the Colombian E&P assets now classified as held for sale.

“In total, this strategy will have unlocked approximately $1.3 billion of capital for investors.” — Gabriel de Alba, Chairman of the Board, Frontera Energy Corporation

The Parex transaction

On April 30, 2026, Frontera shareholders approved a plan of arrangement under which Parex Resources, through a wholly-owned subsidiary, will acquire all of Frontera’s Colombian upstream business — including its oil and gas exploration and production assets, a reverse-osmosis water-treatment facility, and a palm-oil plantation. The transaction carries an enterprise value of $750 million USD. The cash purchase price consists of $500 million USD payable at closing, subject to customary adjustments, plus an additional $25 million USD contingent payment tied to specified development milestones to be achieved within 12 months of closing.

At the same shareholder meeting, investors approved a reduction of Frontera’s capital account of up to $647 million CAD (approximately $470 million USD) to fund a return of capital to shareholders from the net proceeds of the transaction. The Supreme Court of British Columbia issued its final order approving the arrangement on May 4, 2026. Closing remains subject to the satisfaction of remaining conditions and is expected in May 2026.

Chairman Gabriel de Alba said the company would retain roughly $50 million USD of cash to support growth opportunities at the remaining infrastructure business, including an LNG regasification project being developed in partnership with Ecopetrol (NYSE: EC) (BVC: ECOPETROL). “In total, this strategy will have unlocked approximately $1.3 billion of capital for investors,” de Alba said.

ODL pipeline drives cash flow

Frontera holds a 35 percent equity interest in the Oleoducto de los Llanos (ODL) crude oil pipeline, which connects the Rubiales, Quifa, Caño Sur, Llanos-34, and other production blocks to the Monterrey and Cusiana stations in the department of Casanare. ODL’s share of income contributed $14.2 million USD to Frontera in the first quarter, compared with $15.1 million USD a year earlier, with the year-over-year decline reflecting higher depreciation, amortization, and operating costs.

ODL transported 233,875 barrels per day in the first quarter of 2026 at an average tariff of $4.70 USD per barrel, compared with 236,387 barrels per day at $4.73 USD per barrel in the first quarter of 2025. The pipeline declared $185 million USD in total dividends, of which $64.7 million USD is net to Frontera. The company expects to receive those distributions during 2026 in installments of approximately 40 percent in the second quarter, 35 percent in the third quarter, and 25 percent in the fourth quarter.

Long-term debt at Frontera totaled $167.8 million USD at the end of the first quarter and is expected to decline to approximately $131 million USD by year-end 2026, primarily through scheduled amortizations and cash-sweep mechanisms tied to ODL cash flows. From May 2025 through December 2026, long-term debt is expected to fall by more than $100 million USD.

Puerto Bahía expands cargo mix

Puerto Bahía, the multipurpose maritime terminal located in Cartagena adjacent to the Bocachica access channel and near the Reficar refinery, generated $12.7 million USD in revenue in the first quarter of 2026, compared with $10.0 million USD in the same period a year earlier. The 150-hectare facility comprises a hydrocarbons terminal with nominal capacity of 2,672,000 barrels and a general cargo terminal. Frontera holds a 99.97 percent equity interest in the port.

General cargo growth offset weaker liquids volumes. The general cargo terminal handled 38,067 roll-on/roll-off (RORO) units in the first quarter, more than double the 18,223 units handled a year earlier, alongside 3,851 twenty-foot equivalent units (TEUs) of containerized cargo, up from 1,256 TEUs in the first quarter of 2025. Break-bulk volumes declined to 25,216 tons/m³ from 41,198 tons/m³. RORO dwell times shortened from 40 days to 31 days year over year.

The liquids terminal handled 36,937 barrels per day in the first quarter of 2026, down from 51,579 barrels per day a year earlier. Ecopetrol volumes accounted for 26,273 barrels per day, Frontera-related volumes for 7,389 barrels per day, and other third-party volumes for 3,275 barrels per day. The company attributed the decline mainly to lower third-party throughput and the absence of certain trading flows.

Operating costs at the port rose to $7.6 million USD in the first quarter from $5.0 million USD a year earlier, driven by increased infrastructure maintenance in the liquids terminal and higher cargo volumes in the general cargo facility.

LPG and LNG projects advance

Puerto Bahía’s liquefied petroleum gas (LPG) project began initial operations in March 2026, providing capacity to handle up to 10,000 tons per month. The terminal is targeted to become fully operational during the first quarter of 2028. Capital expenditures during the first quarter totaled $1.0 million USD, including $0.4 million USD for major tank maintenance and $0.3 million USD for the LPG project.

The company is also advancing an LNG regasification project at Puerto Bahía in partnership with Ecopetrol, intended to support Colombia’s domestic gas supply as domestic production declines. Frontera is also pursuing expansion of containerized cargo operations.

Discontinued operations

Following the execution of the arrangement agreement, the Colombian E&P assets are now classified as discontinued operations under IFRS 5. Colombian production averaged 36,700 barrels of oil equivalent per day in the first quarter of 2026, comprising 25,394 barrels per day of heavy crude, 8,653 barrels per day of light and medium crude combined, 5,706 thousand cubic feet per day of conventional natural gas, and 1,652 barrels of oil equivalent per day of natural gas liquids. That compares with 39,010 barrels of oil equivalent per day a year earlier.

The operating netback from the discontinued Colombian operations was $41.79 USD per barrel of oil equivalent in the first quarter of 2026, compared with $34.22 USD per barrel of oil equivalent in the first quarter of 2025, supported by a higher Brent reference price of $78.38 USD per barrel against $74.98 USD per barrel a year earlier.

Frontera retains exploration and development interests in Guyana through subsidiaries that include CGX Energy Inc. (TSXV: OYL), which is not part of the Parex transaction. The company’s go-forward portfolio will be anchored by the ODL pipeline stake and Puerto Bahía, with the infrastructure business generating approximately $77 million USD of distributable cash flow in 2025, according to the management information circular dated March 30, 2026.

Above photo courtesy Frontera Energy Corporation.

Frontera Energy Corporation (TSX: FEC) announced a net loss from continuing operations of $663 million USD for the fourth quarter of 2025. This figure includes a non-cash impairment of $603 million USD related to the divestment of the company’s Colombian exploration and production (E&P) portfolio and a $17 million USD impairment regarding its Guyana interest. The company has scheduled a special meeting of shareholders for April 30, 2026, to vote on the divestiture of these assets to Parex Resources Inc. (TSX: PXT).

The definitive agreement for the divestiture establishes a firm value of approximately $750 million USD. The transaction includes up to $525 million USD in equity consideration. Following the completion of the sale, Frontera Energy Corporation intends to distribute approximately $470 million USD to shareholders, which equates to approximately CAD $9.18 per share. This distribution includes a $25 million USD contingent payment.

The divestment marks a strategic shift for the Calgary-based company as it transitions into an infrastructure-focused business model. The new structure is anchored by interests in the Oleoducto de los Llanos Orientales S.A. (ODL) pipeline and the Sociedad Portuaria Regional Puerto Bahía S.A. maritime terminal. For the full year of 2025, the infrastructure segment reported an adjusted EBITDA of $116.6 million USD and a distributable cash flow of $76.7 million USD.

“Frontera now enters its next phase as a more focused, cash-generative infrastructure company, well positioned to deliver durable returns.” — Gabriel de Alba, Chairman of the Board of Directors, Frontera Energy Corporation

A central component of this new strategy is the development of a potential liquefied natural gas (LNG) regasification project in partnership with Ecopetrol S.A. (NYSE: EC, BVC: ECOPETROL). Puerto Bahía has secured a take-or-pay agreement with Ecopetrol S.A., subject to certain conditions, for the project. The initiative is planned in two phases, starting with an initial capacity of approximately 126 million cubic feet per day (MMcfd), with projections to reach at least 300 MMcfd by 2029.

In terms of operational metrics for 2025, Frontera reported an average production of 39,011 barrels of oil equivalent per day (boed). The company recorded an operating EBITDA of $308 million USD for the year. Production costs averaged $9.23/boe, while energy costs were $5.49/boe and transportation costs reached $12.00/boe.

The year-end independent reserves assessment, conducted by DeGolyer and MacNaughton Corp, placed the company’s gross reserves at 94.4 million Boe for the 1P category and 133.8 million Boe for the 2P category. All of the company’s booked reserves as of December 31, 2025, are located within Colombia.

On the environmental and social front, the company reported that 70,162 tons of CO2 equivalent were absorbed through environmental compensation areas in 2025. Additionally, 35% of operational water was reused during the same period. The company also noted a total of $95.1 million USD in purchases from local goods and services suppliers.

Upon the anticipated closing of the arrangement in the second quarter of 2026, Frontera Energy will retain its midstream assets in Colombia and certain non-Colombian interests, including those in Guyana. The company expects to allocate $25 million USD from the sale proceeds to further fund its infrastructure business and strategic growth projects.

The amendment affects shareholders who previously submitted odd lot tenders, requiring them to resubmit using updated forms.

Further details can be found in the Issuer Bid Circular. For assistance with the offer, shareholders can contact Computershare Investor Services Inc. Frontera is a Canadian oil and gas company with operations across South America, including 22 exploration and production blocks in Colombia, Ecuador, and Guyana. For more information, visit Frontera Energy.

Abuve image:LNG Floating Storage Unit from CNW Group/Pacific Rubiales Energy Corp. – predecessor entity to Frontera Energy

The company recorded $208.9 million in net sales, a slight increase from $194.5 million in Q1 2024. Total production for the quarter averaged 39,912 barrels of oil equivalent per day (boe/d), up from 38,193 boe/d in the previous quarter. Heavy crude oil production increased to 24,839 barrels per day, while light and medium crude oil production remained stable at 12,583 barrels per day.

Frontera’s $2.8 million net loss is an improvement over its $8.5 million net loss in Q1.

Operational netback per barrel of oil equivalent (boe) improved to $46.40, up from $43.97 in Q1 2024. The company’s operating EBITDA also saw an increase to $110.3 million from $97.2 million in the previous quarter.

Capital expenditures for Q2 2024 were reported at $80.2 million, up from $69.4 million in Q1 2024 but significantly lower than the $154.9 million recorded in Q2 2023. Frontera generated $149.8 million in cash from operating activities, up substantially from $65.6 million in the previous quarter.

Frontera continues to advance its exploration activities in Guyana, working with its joint venture partner and engaging in discussions with the Government of Guyana. The company is exploring strategic options for the Corentyne block with the support of investment bank Houlihan Lokey.

Frontera Energy Corporation is a Canada-based oil and gas company focused on exploration and production in Latin America. The company’s primary operations are in Colombia, Ecuador, and Guyana.

Above photo: Frontera Energy’s Quifa field in Meta, Colombia (courtesy Frontera)

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)

Specifically, the big three ratings agency is holding steady both the Calgary-based firm’s Long-Term Foreign Issuer Default Rating and Local Currency Issuer Default Rating, as well as affirming Frontera’s senior unsecured notes at B/RR4.

“Frontera’s ratings and outlook reflect its small and concentrated production profile and weak proved developed producing (PDP) reserve life of 2.6 years as of year-end 2022, below the peer average of 3.8 years,” stated Fitch Ratings. “Fitch forecasts gross leverage, defined as total debt to EBITDA, will be close to 1.0x by year-end 2023.”

In addition to this comment, Fitch included the following details in full in its ratings affirmation announcement:

Small Production Profile and Reserve Life

Frontera’s ratings are constrained by its production size. Fitch’s base case assumes Frontera’s production to be close to 42,000 boed in 2023, and remain at that level between 2024-2026. The ratings incorporate Frontera’s low PDP reserve life of 2.6 years as of YE 2022, although improved from 1.6 years in 2020 is still the lowest among peers. Production is concentrated in Quifa and represents nearly 43% of daily production, followed by Guatiquia at almost 17% and CPE-6 13%.

Fixed Cost Production Profile

The company has a fixed production profile that limits its financial flexibility. The company’s half-cycle cost, as calculated by Fitch, was $29 USD per boe in 2022, flat compared to 2021. The high production cost is mostly due to its transportation cost, that reflects the fact that Frontera delivers its production at the Colombian coast instead of delivering at wellhead as other peers do. Fitch expects the company to hedge a minimum 40% and peso-denominated costs to protect it from price volatility and offset the higher costs, respectively.

CFO Supports Capex

Frontera is expected to be FCF negative in 2023 as the company deploys its ambitious capex program, estimated at $32 per boe, of which $24 USD per boe correspond to capex at Wei-1 in Guyana. Going forward, Fitch assumes Frontera will finance its capex with internally generated cash flows, averaging $15 USD per boe and FCF will be mostly neutral, absent of dividends distributions, were CFO is forecasted to average $255 million USD per year between 2024-2026. Regarding Guyana discovery, Frontera is evaluating strategic options with an investment bank, including a potential farm-down.

Leverage Profile

Fitch estimates gross leverage will be 1.1x by YE 2023, strong for its rating category, assuming an EBITDA, including dividends from affiliates, of $481 million USD and total debt of $508 million USD. Fitch expects total debt to PDP to be $13.0 USD per boe by YE 2023, which is high for its rating category, and total debt/1P to be $4.6 USD in 2022. Fitch estimates EBITDA to interest paid to be above 5.0x over the rated horizon.

(Photo credit: Frontera Energy Corporation)

Photo: Frontera Energy’s oil operations in Quifa, Colombia. (Credit: Frontera Energy)

This brings the total net pay discovered in this block to 342 feet, results that “further demonstrate the potential for a standalone shallow oil resource development across the Corentyne block,” according to Frontera Energy.

The Corentyne block is located around 125 miles offshore from from the capital of Georgetown and is a major source of optimism for what Frontera board chair Gabriel de Alba called the company’s “potentially transformational investments in Guyana.”

“With the joint venture’s two-well drilling program now complete, and as a result of inbound expressions of interest from various global third parties, the joint venture is working with Houlihan Lokey to support a review of strategic options for the Corentyne block, including a potential farm down,” added De Alba.

The news came on the same day that Frontera announced third quarter results of $32.6 million in net income. This figure is down from $80.2 million last quarter but a major turnaround from the net loss of $26.9 million in the third quarter of 2022.

In terms of production, the Calgary-based company averaged 40,802 barrels of oil equivalent per day (boe/d) in the third quarter, a slight drop from the 42,049 boe/d reported in the second quarter of 2023 and the 41,033 boe/d averaged in the third quarter last year.

“The decrease in production quarter-over-quarter was mainly the result of lower light and medium crude oil production in Colombia, driven in part by the relinquishment of the Neiva and Orito blocks (which produced approximately 587 boe/d net to Frontera) to Ecopetrol following the completion of the block’s production contract at the end of the second quarter of 2023,” said Frontera in its earnings statement.

“The decrease,” it continued, “was partially offset by higher heavy oil crude production driven by another record quarterly CPE-6 production of 5,803 bbl/d due to positive development drilling and the reactivation of the Sabanero block on July 1, 2022, and the successful Jandaya-1 well stimulation in Ecuador.”

Specifically, in Colombia, the company noted that it drilled 19 development wells at its Quifa, CPE-6, and Cubiro blocks (including five wells at CPE-6 site) along with 12 production wells (including seven wells at Quifa and five wells at its Cajua location) and general “expansion and improvement” at CPE-6.

“During the quarter,” stated the company, “Frontera invested in the expansion and improvement of the development facilities in the CPE-6 block, which will double water-handling capacity to 240,000 bbls/day by the end of 2023 and support additional growth for the field.”

The Canadian company also provided details about exploratory assessments in Ecuador at the Perico and Espejo block, where it holds a 50% non-operator stake and is currently preparing environmental impact assessments as well as more testing in order to be able to acquire a production environmental license from the government. 

“At the Espejo block, preliminary logging information indicated the presence of hydrocarbons in both the Pashuri-1 and Caracara-1 exploration wells and further analysis is underway. In addition, jointly with the operator, new 3D seismic survey data is being interpreted to define the location of the two remaining commitment exploration wells.”

This all comes alongside its the bigger news of the company’s recent discovery of 210 feet of hydrocarbon-bearing sands during its offshore exploration off the coast of Georgetown, Guyana, a discovery that is currently being investigated further to determine its potential as the firm works on its agreement with partner CGX regarding the building of the exploratory well and the discovery.

In Colombia, where much of the company’s current output comes from, Frontera is continuing its expansion in the country with its exploration of the Lower Magdalena Valley and Llanos Basins, as well as further investments in midstream assets and infrastructure within the country.

“In its standalone and growing Colombia midstream business, the company generated quarterly adjusted midstream EBITDA of $30.4 million USD, an increase of 8% over the prior quarter,” said Gabriel de Alba, chairman of the board of directors of Frontera Energy.

Overall, the company reported earnings (EBITDA) of $116.5 million USD this quarter — up 27% from the previous quarter — and net earnings of $80.2 million USD compared to a net loss of $11.3 million USD in the first quarter of 2023.

Crude oil production reached 39,239 barrels per day within the quarter, outpacing both the last quarter’s figures and the output reported in the second quarter last year. The firm’s total oil inventory reached 1,434,508 barrels this quarter due to the strong production of its oil fields.

Frontera’s CEO Orlando Cabrales expressed optimism over the second quarter results and cost control efforts while noting that the Canadian company was able to return much of its oil production back to operation after the road blockades that affected production in the first quarter.

“Our total cash position including restricted cash as of the second quarter increased to $214 million USD while we deployed approximately $155 million USD in capital spending, primarily to drill 19 development wells at Quifa, CPE-6 and Cubiro, improve flowlines, build a storage tank and other facilities to double water handing capacity at CPE-6, drill two exploration wells in Colombia and complete Wei-1 exploration drilling activities,” said Cabrales.

“We continue to proactively manage our inventories in Colombia, selling approximately 20% of total inventories under an improved differentials environment,” he added. “Lastly, the company remains vigilant on costs, with a stronger Colombian peso year-to-date affecting our domestic costs, we have hedged 40% of our Colombian-peso denominated cost-base to help protect our bottom line.”

Photo: Frontera Energy’s oil operations in Quifa, Colombia. (Credit: Frontera Energy)

If the block, which it charactered as having “significant potential,” meets the necessary parameters, the Calgary-based company will consider advancing its exploration license to the development phase for its Wei-1 well. This plan, as outlined by Reuters, was supported by comments from a company representative during its recent second quarter investors call.

Photo: Frontera Energy’s Quifa field in Meta, Colombia. (Credit: Frontera Energy)

“We are analyzing the significant amount of data we got from the well, which will take a couple of months,” said the executive. “That will tell us the potential of the block. Any move we make in relation with the license will depend on that analysis.”

Frontera, which reported net income of $80.2 million USD in the second quarter, spent $154.9 million USD in capital expenditures in the quarter, and nearly half ($72.8 million USD) of those expenditures were related to its Guyana Wei-1 exploration well, according to the second quarter results report the company released last week.

In its reporting, Frontera provided additional details about the Wei-1 well, which is roughly 200 meters offshore from Georgetown in the Corentyne block. “The Joint Venture [with CGX Energy] discovered 210 feet of hydrocarbon-bearing sands in the Santonian horizon confirmed by wireline logs and extensive core samples,” according to the filing. “The rock and fluid properties of the Santonian are currently being analyzed by an independent third-party laboratory to define net pay and a basis for the evaluation of this interval.”

In line with an existing agreement between the two companies, Frontera is expected to increase its participating interest in the Corentyne block t0 72.7% while CGX Energy will retain a 27.3% participating interest.

In addition toe the Wei-1 well, Frontera also recorded a significant discovery in Guyana, named Kawa-1, in 2022.

Fitch noted in its report that GeoPark’s fossil fuel reserves have fallen below seven years, something the firm would be unable to “dramatically reverse” within the next 12 months. Specifically, the big three credit rating agency stated that the company only has a “1P reserve life of 5.4 years” when based on 2022 production standards. And despite the company employing new capital from Ecuador and Colombia to build up its reserves, Fitch believes that GeoPark’s reserve life would likely decrease to 4.6 years by the end of 2023.

In comparison to other independent oil producers in the area, its reserve life is now lower than that of SierraCol (8.0 years), Frontera Energy (8.7 years), and Gran Tierra (7.5 years) while coming in around the same level as CGC Energy (5.4 years).

GeoPark is also noted to have decreased its diversification of resources after the sale of Argentine and Brazilian oil fields, with the company being reliant on the continued steady oil production in Colombia. 

Despite the lack of optimism on that front, however, Fitch believes that GeoPark can increase output to per day to 40,000 barrels of oil equivalent per day by 2024 based on the existing strength of their oil fields in Colombia. This comes even with 2022’s production remaining in comparison to 2021.

A recent report from the company itself showed that its second quarter consolidated average oil and gas production is at 36,581 barrels of equivalent per day, largely due to the stalling of some of its operations in Colombia and Chile. 

In another optimistic turn, Fitch also believes that GeoPark’s gross leverage, or its overall debt to EBITDA ratio, will improve due to rising oil prices, with this number having decreased to 0.8x in 2022 in comparison to the 2.2x the company reported in 2021. 

GeoPark’s conservative financial policies will also likely grant it better financial flexibility in the future, and while its 1P reserve life is below seven years, the credit agency predicts that it will be enough to weather any price volatility in the market in the future. 

The company recently announced that, at predicted oil prices of $80-90 per barrel, it will likely have an EBITDA $490-$560 million USD as well as $120-$140 million USD in free cash flow, of which 40-50% of it will go to the company after taxes.

Photo credit: GeoPark