- Recorded an Income from Operations of $45.2 million and a Net Loss of $2.8 million
- Generated Operating EBITDA of $110.3 Million and Cash Provided by Operating Activities of $149.8 Million
- Delivered Average Daily Production of 39,912 Boe/d in Q2, Up 5% From the Prior Quarter, Including Average Daily Production of Approximately 40,600 Boe/d in June and July
- Generated Quarterly Adjusted Infrastructure EBITDA of $27.8 Million and Segment Income of $14.6 Million
- Began Construction of Strategic Reficar Connection, Expected to Become Operational in December 2024
- Signed a 2-year Water Treatment Collaboration Agreement with Ecopetrol for the Quifa Block Via the SAARA Water Treatment Facility
- Entered Into Collaboration Agreement Between Puerto Bahia and GASCO to Pursue LPG Project in Cartagena, Colombia
- Declared Quarterly Dividend of C$0.0625 Per Share, or $3.9 Million in Aggregate, Payable on or around October 16, 2024
- Announced Intention to Commence a $30 million Substantial Issuer Bid
Frontera Energy Corporation (TSX: FEC) ("Frontera") reported financial and operational results for the second quarter ended June 30, 2024. All financial amounts in this news release are in United States dollars, unless otherwise stated.
Gabriel de Alba, Chairman of the Board of Directors, commented:
"The Company continues to execute on its strategic priorities supporting the long-term growth and sustainability of its businesses. During the quarter, the Company finalized a 2-year agreement with Ecopetrol to treat and dispose water from the Quifa Block in its SAARA facility during a stabilization period of the plant, and today announced that we have broken ground on the construction of the connection project between Sociedad Portuaria Puerto Bahia S.A. ("Puerto Bahia") and Refineria de Cartagena S.A.S ("Reficar"), which the Company expects will become operational in December 2024. Following the end of the quarter, the Company also announced it executed an agreement with a leading Latin America energy provider, GASCO, that seeks to develop the lowest cost, liquefied petroleum gas ("LPG") import facilities for Colombia at Puerto Bahia.
Frontera also continues to take actions to unlock value for its stakeholders and remains committed to these efforts for the remainder of 2024 and beyond, including the ongoing strategic alternatives review processes. In addition to the quarterly dividend, I am pleased to announce the Company´s intention to commence a Substantial Issuer Bid ("the SIB") to purchase $30 million of the Company's outstanding shares, highlighting the strong financial results of the first half of 2024. So far this year, considering the proposed SIB, the Company is poised to return over $51 million of capital to our stakeholders, including $11.7 million in declared dividends, $6.7 million of common share repurchases and $3.5 million in buybacks of its 2028 unsecured notes."
Orlando Cabrales, Chief Executive Officer (CEO), Frontera, commented:
"Frontera's second quarter production and financial results build on our momentum from the first quarter and were in-line with our expectations. Operationally, the Company generated $110.3 million in quarterly Operating EBITDA, produced $27.8 million of Adjusted Infrastructure EBITDA, and finished the quarter with a total cash balance of $215.1 million.
Production increased by approximately 5% quarter over quarter, mainly driven by increased water disposal capacity in the CPE-6 and Quifa blocks, well interventions in the Sabanero block, expansion of gas compression facilities in the VIM-1 block, and the completion of two wells at the Perico block in Ecuador.
On the exploration side, with all pre-drill activities completed, we now expect to spud the high impact Hidra-1 prospect on the VIM-1 block in the third quarter of 2024. Following recent successes in Ecuador in the Perico block, the first (Espejo Sur B3) of two wells in Espejo has been completed showing initial gross production of 500bopd, spud of the second well (Espejo Norte A-1) took place at the end of July and drilling operations are on-going.
Despite some inflationary pressure on our costs, we remain on track to achieve our 2024 Capital, Production and EBITDA Guidance. We have increased production during the quarter, and in June and July, averaged production was approximately 40,600 barrels per day.
In our infrastructure business, ODL paid a first installment of dividend and return of capital of $31 million in April, approximately 50% of the total of $62.8 million expected for 2024. Operationally, ODL continues to maintain strong operating and financial performance with transported volumes increasing about 1% q-o-q and EBITDA reaching $68 million for the quarter. Puerto Bahia continues to move forward with its strategic agenda, breaking ground in the construction of the Reficar connection and achieving an important milestone with the start of horizontal directional drilling in the Canal del Dique in July, as well as announcing the GASCO LPG transaction. During the quarter, we also started-up and continue stabilizing our SAARA water treatment plant with a goal of reaching 250,000 barrels of water treated per day by the end of the year. During the month of June, the plant realized its first gross revenues associated to the water treatment collaboration agreement with the Quifa Block.
In our Guyana exploration business, the Company and its joint venture partner continues to engage in regular, constructive and collaborative conversations with the Government of Guyana. The Joint Venture, with support from investment bank and capital markets experts Houlihan Lokey, continues to actively pursue strategic options to unlock the potential of the Corentyne block."
