Pearl was the country’s Environment Minister in 2011 where he led plans for the country to adapt to climate change, and was also High Commissioner for Peace, where he negotiated with guerilla groups ELN and FARC.

“I appreciate the confidence of the companies affiliated with the ACP and the hydrocarbon industry; I arrive with all the energy to lead this sector that is so important for the country, with the aim of building bridges for the joint construction of an energy policy for the benefit of all Colombian citizens and regions, since this industry has an enormous responsibility with the future generations and is therefore committed to sustainable development,” Pearl said.

Orlando Cabrales Segovia, president of the Board of Directors of the ACP, said: “Frank assumes the position at a crucial moment for the industry and the country, in which the efficient management of natural resources and innovation in the sector are essential for national energy security, economic diversification, well-being and a better quality of life for Colombians.”

“We must continue to think about growth, yes, this must be green growth focused on sustainable development, to which the human talent of the hydrocarbons industry is committed, men and women who innovate daily to ensure socially and environmentally responsible operations,” said Pearl in his first statement as the new President of the ACP.

Pearls appointment comes as the last president, Francisco José “Pacho” Lloreda retired after nine years leading the organization.

“On behalf of the ACP Board of Directors, we regret Dr. Lloreda’s decision not to continue leading the gremio (trade association). In these nine years, he was a firm defender of the industry and national interests, raising the name of the Colombian Association of Oil and Gas, and the hydrocarbon industry. We express our sincere feeling of gratitude and admiration, wishing him the best in his future plans,” said Cabrales.

Specifically, the Toronto-based oil and gas company, which operates oilfields in Colombia, Ecuador and Guyana, said in a statement that it has pledged to preserve and restore 2,500 hectares of biological corridors in “environmentally strategic areas” of influence by 2027. This will protect or grow the equivalent to approximately 2.6 million trees, according to Frontera Energy.

“We are dedicated to implementing actions that promote environmental sustainability, including reforestation, and contributing to a positive climate change solution,” said Orlando Cabrales Segovia, CEO of Frontera Energy. “We are proud to join this global movement as environmentally conscious stewards in our operations.”

The initiative, which was launched by the WEF in Davos, Switzerland, in January 2020, estimates that only half of the six trillion trees that once covered the planet now remain and an additional 15 billion trees are lost each year.

“Trees and forests are a crucial part of the solution to the climate crisis and biodiversity collapse,” said Nicole Schwab, director of 1t.org and nature-based solutions at the WEF. “That’s why companies, civil society and governments must continue to work together for the conservation and restoration of our forests.”

Frontera says it intends to invest approximately $200-$295 million (USD) during 2021, with $110-$130 million in development capital focused on the company’s Colombian base, with$30-40 million to drill two exploration wells in the VIM-1 block, and to complete seismic and preparatory work in Ecuador in advance of potential drilling in 2022.

In Guyana, the company plans to spend $40-90 million in total, principally for the Kawa-1 exploration well on the Corentyne block during the second half of 2021 and $15-25 million for Berbice Port construction.

Frontera is forecasting full year Colombian production of 40,500 – 42,500 boe/d and 2021 exit production of approximately 43,000 boe/d while anticipating operating EBITDA of $275-$325 million.

Board Member Orlando Cabrales Segovia is the new Chief Executive Officer, effective March 15, 2021, replacing Richard Herbert who has served as Chief Executive Officer for the last three years. Frontera said in a statement that the appointment of Mr. Cabrales reflects the significant progress that the company has made to shape its operations as a focused Colombian producer with strong local partnerships, significant regional exploration projects, and material infrastructure assets serving the broader industry and communities. After March 15^th Mr. Herbert will continue acting in an advisory capacity to ensure an orderly transition with a focus on Guyana.

“I am very pleased to pass the leadership baton to Orlando, who I have known for many years and deeply respect. I have every confidence that the future prospects for Frontera under his leadership are bright. I look back upon the achievements of the Frontera leadership team, supported by our Board, over the past three years since I became CEO with genuine pride. We have enhanced the culture of Frontera as evidenced by its improved health and safety performance and ethical reputation; Colombian upstream operations have been transformed by reducing costs and focusing on value over volumes; and the acquisition of CGX and joint venture interests in key exploration blocks including the Corentyne and Demerara blocks offshore Guyana, the VIM-1 block in the Lower Magdalena Valley, Colombia and exploration blocks in Ecuador has given Frontera a strong portfolio of renewal options for the future. I wish Orlando every success in taking Frontera forward in the next phase of its development,” said outgoing CEO Richard Herbert.

Mr. Cabrales joined Frontera’s Board of Directors in November 2018 and has over 30 years of experience in the public and private energy sector in Colombia, including serving as Vice Minister of Energy of the Ministry of Mines and Energy in Colombia between 2013 and 2014 and as the President of the ANH from 2011 to 2013. Mr. Cabrales held senior roles at BP in Latin America and has been on the boards of numerous companies in Colombia including Isagen S.A., Tuscany Drilling, Cenit and ISA. Mr. Cabrales earned an undergraduate degree in Law from Pontifical Javeriana University and a Master’s degree in Philosophy from Boston College. Concurrent with his appointment as CEO, Mr. Cabrales will continue as a director of Frontera.

“Since the new Frontera emerged in November 2016, Frontera has made tremendous progress. The team has improved Frontera’s performance and reputation, exited underperforming assets and agreements, driven down costs, and maintained a strong production and financial profile throughout this transformation,” said incoming CEO Orlando Cabrales.

“Today, Frontera is a more streamlined business with a sustainable portfolio of value-producing assets in Colombia and a highly prospective exploration portfolio in Guyana, Colombia and Ecuador. Combined with a relentless focus on operational efficiency, our goal is to create maximum value for shareholders. Our 2021 plan has been developed with these strategic goals in mind. I very much look forward to being a direct part of the management team in the next exciting phase of Frontera.”

“Both personally and on behalf of the Board, I want to thank Richard for all that has been achieved on his watch as CEO. Great progress has been made over the past three years, and Frontera has many great opportunities before it,” said Chairman of the Board Gabriel de Alba.

“As Frontera enters the next stage in its evolution, the Board sought a leader with the deep Colombian-based leadership experience, extraordinary reputation and relationships, and the ability to forge strategic partnerships with international oil and gas and infrastructure companies. The Board believes that Orlando brings these strengths and many others, which will help realize Frontera’s full value potential. We are extremely proud of the advances this Company has already made over the past three years to right-size itself, relentlessly drive down costs, and create an operating culture that has been recognized this year as one of the world’s most ethical. Frontera is a company with significant value across its assets and we look forward to the contributions of our leadership team as we execute our plan for 2021.”

Frontera also announced last week that the company intends to file with the TSX a notice of intention to commence a normal course issuer bid for its Common Shares (the “NCIB”). If accepted by the TSX, Frontera would be permitted under the NCIB to purchase, during a 12-month period, up to 5,197,612 Common Shares, representing approximately 10% of Frontera’s “public float” (as calculated in accordance with TSX rules). The NCIB will be made in accordance with the rules of the TSX through the facilities of the TSX or alternative trading systems, if eligible. Frontera believes that, from time to time, the market price of its Common Shares may not fully reflect the underlying value of its business and future prospects and financial position. In such circumstances, Frontera may purchase for cancellation outstanding Common Shares, thereby benefitting all shareholders by increasing the underlying value of the remaining Common Shares. At the present time, the Board believes that an NCIB is a more effective way to deliver value to shareholders when compared to cash dividends.

Under its normal course issuer bid that expired on October 17, 2020, Frontera was authorized to repurchase for cancellation 6,532,400 Common Shares and Frontera purchased for cancellation 2,941,128 Common Shares between October 18, 2019 and October 17, 2020 at a volume weighted average price of C$9.788 per share. Purchases were made on the open market.

Frontera’s 2021 Guidance

While preparing its 2021 Guidance, Frontera considered options to increase production in Colombia this year. Frontera has a stable 2P reserve base and a large pool of assets, from which Frontera identified the best combination of wells and drilling to deliver the highest capital efficiency. Various production and capex scenarios were reviewed that would have seen increased production and EBITDA through higher development capex, particularly in its key heavy oil field Quifa. The Company believes its 2021 capital plan optimizes both capital efficiency and free cash flow after development capex in 2021 and beyond.

Frontera developed its 2021 guidance using an average 2021 Brent price of $60/bbl and an exchange rate of 3,500 Colombian Pesos per US dollar. Given the current oil price environment above $60/bbl Brent, every one dollar average annual increase to our $60/bbl Brent price assumption for 2021 would increase Operating EBITDA by approximately $10 million (including hedging).

2021 Guidance Metrics

Capital Program

Frontera expects its total 2021 capital program to be approximately $200-$295 million on a consolidated basis. This total includes approximately $110-$130 in development capital to maintain Frontera’s production volumes – a significant reduction on a per barrel basis compared to previous years. Development costs for the 2021 budget are expected to be approximately 40%-50% lower than 2019 due to cost efficiencies and process improvements Frontera achieved in 2020.

The Company expects based on presently available information that the total cost of the Guyana exploration program in 2021 will be approximately $90 million, principally to drill the Kawa-1 well offshore Guyana, with its share of that cost depending on whether or not it elects to pursue strategic options, and $15-25 million for Berbice Port (Guyana) construction. Frontera anticipates spending $30-$40 for exploration in Colombia including drilling two exploration wells in VIM-1 and to complete seismic and preparatory work in Ecuador in advance of potential drilling in 2022. The Company anticipates generating operating EBITDA of $275-$325 million.

Production and Production Costs

Frontera’s 2021 Plan anticipates a production exit rate of approximately 43,000 boe/d and average annual production of 40,500 – 42,500 boe/d, all from Colombia. Production costs are expected to average $10-$11 per boe, below full year 2020. Included in this guidance, Frontera may recognize a portion of its post-termination remediation costs in Peru as 2021 operating costs with an impact of approximately $0.50/boe.

Transportation Costs

Transportation costs are expected to average $10.50 – $11.50 per boe in 2021, in line with full-year 2020. This includes the impact of the sale of the oil inventory in Peru of approximately $0.50 per boe and the expected impact of additional take or pay contracts stemming from the pipeline settlement announced on November 17, 2020 (approximately $0.20 per boe on a full year basis assuming the settlement is approved around mid-year).

Colombia Update 

In the VIM-1 block, in the Lower Magdalena Valley, Frontera (50% W.I.) and Parex (Operator, 50% W.I.), completed the permitting and approval process and progressed the development plan concept including gas commercialization and infrastructure requirements for the exciting La Belleza-1 light oil and natural gas discovery.

Regulatory approval to extend the current VIM-1 block boundaries by approximately 32,000 acres was recently received. Building on the success of the La Belleza discovery, the Joint Venture anticipates drilling two additional exploration wells in the VIM-1 block in 2021. In addition, Frontera plans to begin additional preliminary work in the VIM-22 block ahead of drilling in 2022.

In 2021, Frontera plans to drill at least 19 wells in Quifa and 15 wells in CPE-6. At this activity level, development costs at Quifa, its largest field, have been lowered to $8/boe in 2021, down 60% from $20/boe in 2019. The Company expects steady production volumes in the heavy oil business unit, backstopped by production from CPE-6 that is expected to increase by approximately 40% this year due to further drilling and construction of additional water-handling facilities. In Frontera’s light and medium oil business unit, Frontera plans to drill two wells in the Coralillo field as part of the continued development of the Guatiquia block.

Brookfield Renewable Energy Partners L.P. CEO Sachin Shah

Isagen owns and operates a renewable energy portfolio consisting of 3,032 MW of principally hydroelectric generating capacity and a 3,800 MW development portfolio in Colombia. During the meeting, BRE Colombia Investments LP informed the minority shareholders, including several Colombian municipal-owned entities and pension funds that all shareholder questions and inquiries would be answered and a written tender would be offered for outstanding shares in the following days, and published on Isagen’s website. The price offered for the remaining shares will be equal to the auction purchase price of $4,130 COP per share.

BRE Colombia Investments indicated its intent to maintain existing strategic initiatives and projects that Isagen has planned and undertaken. “Our objective is to remain here, to continue contracting with people from here, and to continue fomenting the company’s growth from here, over the next 30 or 40 years, as Isagen is one of the most important energy generators of the country, for that our objective is to protect its market strength,” said Sachin Shah, the head of Brookfield Renewable Energy.

The new board of directors seated consists of the following individuals:

* Denotes An Independent Board Member

During the special shareholder’s meeting, new bylaws were also approved, adjusting for the changing of majority ownership from Colombia’s government to private-sector shareholders.

Colombia’s national government sold its shares in Isagen, worth slightly more than $2 billion USD, in order to fund the country’s major highway modernization initiative, called “4G.”

Above photo: Inside Isagen’s Sogamoso Hydroelectric Facility -(courtesy Isagen)