Shareholders Approve Arrangement with Parex to divest Frontera’s E&P Assets for $750 Million in Enterprise Value and up to $470 million Return of Capital to Shareholders
Recorded Net Income for the Period from Continuing Operations of $13.1 Million
Recorded Adjusted EBITDA for Q1 2026 of $28.5 Million
Frontera Positioned as a Standalone Infrastructure Company
Expected Post Closing Cash Balance of Approximately $50 Million
ODL Declared $185 Million in Dividends ($64.7 million, Net to Frontera)
Q1 2026 Average Production from Discontinued Operation of 36,700 boepd
CALGARY, AB, May 15, 2026 /CNW/ – Frontera Energy Corporation (TSX:FEC) (OTCQX:FECCF) (“Frontera” or the “Company“) today reported financial and operational results for the first quarter ended March 31, 2026. All financial amounts in this news release and in the Company’s financial disclosures are in United States dollars, unless otherwise stated.
Gabriel de Alba, Chairman of the Board of Directors, commented:
“During the first quarter, Frontera delivered solid infrastructure results while taking decisive steps to advance the Company’s strategic repositioning. Frontera remains firmly committed to disciplined execution, prudent oversight of capital, emphasizing operational excellence, and maintaining a strong balance sheet.
Frontera achieved an important milestone with shareholder approval of the plan of arrangement and return of capital, related to the sale of its Colombian E&P asset to Parex Resources. Subject to closing, the Company expects to return up to $470 million to shareholders, representing a substantial return of capital.
The Company is retaining approximately $50 million of cash to support the growth opportunities of its high-quality infrastructure business, including the LNG regasification project with Ecopetrol. The standalone and refocused Frontera infrastructure business, anchored by its ownership in ODL and Puerto Bahia, generates stable long-term cash flows and provides multiple near-term growth catalysts that support long-term shareholder value creation.
In total, this strategy will have unlocked approximately $1.3 billion of capital for investors.”
Orlando Cabrales, Chief Executive Officer (CEO), Frontera, commented:
“In the first quarter of 2026, Frontera delivered solid infrastructure performance, supported by contributions from Puerto Bahía and our equity interest in ODL, which generated an Adjusted EBITDA for the quarter of $28.5 million. Additionally, Frontera expects to receive, proportional to the Company’s 35% equity interest in ODL, approximately $65 million in dividends in 2026.
At Puerto Bahía, we continue to advance our key growth initiatives, supporting the long-term development of Frontera’s infrastructure platform. During the first quarter, our container business delivered solid operational performance, handling 3,851 TEUs. We also achieved meaningful progress across our energy infrastructure projects, including reaching a key milestone in the LPG project with the successful commencement of initial operations in March 2026, which gives us the capacity to handle up to 10,000 tons per month. We continue making solid progress with the firm goal of becoming fully operational during the first quarter of 2028.
In parallel, we continue to advance the LNG regasification project in partnership with Ecopetrol and support the long-term reliability of Colombia’s energy supply. Looking ahead, we expect these initiatives to contribute to the continued growth and diversification, enhancing cash flow resilience over time.
In our E&P business, we remain focused on maintaining safe and stable operations while advancing toward the expected closing of the Parex transaction, which is anticipated to be completed in May 2026.”
First Quarter 2026 Operational and Financial Summary*:
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Q1 2026 |
Q4 2025 |
Q1 2025 |
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Financial Results |
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Total Revenues and Other Income |
($M) |
26,833 |
26,862 |
25,137 |
|
Operating costs |
($M) |
7,102 |
7,579 |
5,164 |
|
General and administrative |
($M) |
3,039 |
4,497 |
3,406 |
|
Operating income (loss) from continuing operations |
($M) |
13,488 |
(20,510) |
14,438 |
|
Cash (used) provided by operating activities from continuing operations |
($M) |
(4,961) |
11,319 |
23,876 |
|
ODL dividends, net of taxes |
($M) |
— |
12,254 |
26,172 |
|
Total debt and lease liabilities |
($M) |
169,188 |
168,738 |
106,283 |
|
Net income (loss) for the period from continuing operations (1) |
($M) |
13,055 |
(32,372) |
11,770 |
|
Net (loss) income for the period from discontinued operations (1) |
($M) |
(28,459) |
(628,076) |
15,754 |
|
Net (loss) income for the period (1) |
($M) |
(15,404) |
(660,448) |
27,524 |
|
Per share – diluted from continuing operations |
($) |
0.18 |
(0.46) |
0.14 |
|
Per share – diluted from discontinued operations |
($) |
(0.39) |
(9.01) |
0.19 |
|
Non-IFRS Results** |
||||
|
Adjusted EBITDA (2) |
($M) |
28,477 |
27,700 |
27,634 |
|
Adjusted EBITDA Margin (3) |
% |
63 % |
58 % |
66 % |
|
LTM Infrastructure Distributable cash flow (2)(4) |
($M) |
51,118 |
76,690 |
102,970 |
|
Net Debt (2) |
($M) |
149,626 |
123,665 |
54,041 |
|
Net Debt to Adjusted EBITDA LTM |
x |
1.33x |
1.11x |
0.48x |
|
Operational Results |
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|
Puerto Bahia Port Facility |
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|
Volume throughput at liquids terminal |
(bbl/d) |
36,937 |
40,548 |
51,579 |
|
RORO Volumes handled at general cargo terminal |
(Units) |
38,067 |
38,727 |
18,223 |
|
Break Bulk Volumes |
(Tons/m3) |
25,216 |
15,406 |
41,198 |
|
Containers |
(TEUs) |
3,851 |
6,436 |
1,256 |
|
Investments in ODL Pipeline |
||||
|
Volumes transported at oil pipeline facility |
(bbl/d) |
233,875 |
241,734 |
236,387 |
|
Average transportation tariff per barrel |
($/bbl) |
4.70 |
4.76 |
4.73 |
|
Discontinued Operations – Colombia |
||||
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Total production Colombia (5) |
(boe/d) (3) |
36,700 |
38,332 |
39,010 |
|
Brent price reference |
($/bbl) |
78.38 |
63.08 |
74.98 |
|
Oil and gas sales, net of purchases (3) |
($/boe) |
75.07 |
57.25 |
64.53 |
|
Net sales realized price (3) |
($/boe) |
72.66 |
56.14 |
62.19 |
|
Operating netback per boe (3) |
($/boe) |
41.79 |
28.36 |
34.22 |
|
* Figures from previous reporting periods were changed due to the re-presentation of continuing operations following the divestment of non-core assets in Ecuador. Refer to the “Discontinued Operations” section on page 8 of the Company’s Management Discussion & Analysis for the three months ended March 31, 2026 MD&A for further details. |
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** As a result of the Arrangement (as defined below), these adjusted figures have been re-presented to exclude certain assets sold, namely Agrocascada and Proagrollanos, formerly included as part of Frontera Infrastructure. |
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(1) References to heavy crude oil, light and medium crude oil combined, conventional natural gas, and natural gas liquids in the above table and elsewhere in this news release refer to heavy crude oil, light crude oil and medium crude oil combined, conventional natural gas, and natural gas liquids, respectively, product types as defined in National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities. |
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(2) Represents W.I. production before royalties. Refer to the “Further Disclosures” section on page 29 of the MD&A for further details. |
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(3) Boe has been expressed using the 5.7 to 1 Mcf/bbl conversion standard required by the Colombian Ministry of Mines & Energy. Refer to the “Further Disclosures – Boe Conversion” section on page 29 of the MD&A for further details. |
|
(4) Non-IFRS ratio is equivalent to a “non-GAAP ratio”, as defined in National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure (“NI 52-112“). Refer to the “Non-IFRS and Other Financial Measures'” section on page 16 of the MD&A for further details. |
|
(5) 2024 comparative figures differ from those previously reported due to the inclusion of Puerto Bahia inter-segment costs related to diluent and oil purchases as well as transportation costs. |
|
(6) Supplementary financial measure (as defined in NI 52-112). Refer to the “Non-IFRS and Other Financial Measures” section on page 16 of the MD&A for further details. |
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(7) Includes the net effect of put premiums paid for expired positions and positive cash settlements received from oil price contracts during the period. Refer to the “Gain (Loss) on Risk Management Contracts” section on page of the MD&A for further details. |
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(8) Non-IFRS financial measure (equivalent to a “non-GAAP financial measure”, as defined in NI 52-112). Refer to the “Non-IFRS and Other Financial Measures” section on page 16 of the MD&A for further details. |
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(9) Capital management measure (as defined in NI 52-112). Refer to the “Non-IFRS and Other Financial Measures” section on page 16 of the MD&A for further details. |
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(10) “Unrestricted Subsidiaries” include CGX Energy Inc. (“CGX“), listed on the TSX Venture Exchange under the trading symbol “OYL”; FEC ODL Holdings Corp., including its subsidiary, Frontera Pipeline Investment AG (“FPI“, formerly named Pipeline Investment Ltd); Frontera BIC Holding Ltd.; Frontera Energy Guyana Holding Ltd.; Frontera Energy Guyana Corp.; and Frontera Bahía Holding Ltd., including Sociedad Portuaria Puerto Bahia S.A (“Puerto Bahia“). Refer to the “Liquidity and Capital Resources” section on page 22 of the MD&A for further details. |
First Quarter 2026 Operational and Financial Results:
- During the first quarter of 2026, the Company reported net income from continuing operations, attributable to equity holders of the Company, of $13.1 million mainly resulting from an income from operations of $13.5 million and foreign exchange income of $6.8 million partially offset by finance expenses of $5.7 million and other loss of $2.5 million. This compares with net income from continuing operations, attributable to equity holders of the Company, in the first quarter of 2025, of $11.8 million, which included mainly an income from operations of $14.4 million and foreign exchange income of $2.5 million partially offset by finance expenses of $3.2 million and other loss of $2.4 million.
- Total revenues and other income for the first quarter were $26.8 million, compared with $26.9 million in the prior quarter and $25.1 million in the first quarter of 2025. Revenues during the quarter were mainly driven by a strong performance in Puerto Bahia, where the general cargo experienced a significant growth in handled volumes in roll-on/roll-off (“RORO“) units and container, while operations at the Oleoducto de los Llanos (“ODL“) remained strong.
- Port revenues were $12.7 million in the first quarter of 2026, compared with $12.8 million in the prior quarter and $10.0 million in the first quarter of 2025.
- General cargo handled at the Port Facility during the first quarter of 2026 comprised 38,067 units of RORO, break bulk volumes of 25,216 tons/m³ and container of 3,851 TEUs, compared with 38,727 units, 15,406 tons/m³ and 6,436 TEUs in the prior quarter, respectively, and 18,223 units, 41,198 tons/m³ and 1,256 TEUs in the first quarter of 2025, respectively.
- Liquid volumes handled in the Port Facility during the first quarter of 2026 were 36,937 bbl/d, compared with 40,548 bbl/d in the prior quarter and 51,579 bbl/d in the first quarter of 2025. In the first quarter the decline was mainly due to lower third-party liquid volumes, reflecting reduced throughput from key customers and the absence of certain trading flows.
- General cargo handled at the Port Facility during the first quarter of 2026 comprised 38,067 units of RORO, break bulk volumes of 25,216 tons/m³ and container of 3,851 TEUs, compared with 38,727 units, 15,406 tons/m³ and 6,436 TEUs in the prior quarter, respectively, and 18,223 units, 41,198 tons/m³ and 1,256 TEUs in the first quarter of 2025, respectively.
- Share of income from ODL Pipeline Investment was $14.2 million in the first quarter of 2026, compared with $14.1 million in the prior quarter and $15.1 million in the first quarter of 2025, the result for the quarter was driven by higher depreciation and amortization expense and operating costs.
- ODL volumes transported were 233,875 bbl/d in the first quarter of 2026, compared with 241,734 bbl/d in the prior quarter, and 236,387 bbl/d in the first quarter of 2025.
- Adjusted EBITDA in the first quarter of 2026 was $28.5 million, compared with $27.7 million in the prior quarter and $27.6 million in the first quarter of 2025. Adjusted EBITDA was driven by higher revenues during the quarter partially offset by higher operating costs.
- ODL declared net dividends to Frontera of $64.7 million for 2026 compared to $52.9 million in 2025, of which Frontera expects to receive distributions during 2026 comprising approximately 40% in the second quarter, 35% in the third quarter, and the remaining 25% in the fourth quarter.
- Last twelve-months (“LTM“) Infrastructure distributable cash flow ended March 31, 2026 was $51.1 million, compared with $76.7 million for the twelve month period ended December 31, 2025 and $103.0 million for the twelve month period ended March 31, 2025. These differences are driven by the timing of ODL distribution payments between periods, which impacts LTM calculations, rather than by changes in underlying operating performance. Capital distributions paid or declared over the period remained relatively stable, totaling $60.4 million in 2024, $61.5 million in 2025 and $64.7 million in 2026. For comparison purposes, an estimated LTM distributable cash flow for the period ending on April 30, 2026 was $71.3 million.
- Capital expenditures were $1.0 million in the first quarter of 2026, compared with $2.0 million in the prior quarter and $2.1 million in the first quarter of 2025. During the first quarter of 2026, investments made in Puerto Bahia, including: (i) $0.4 million in major tank maintenance, (ii) $0.3 million in investment towards the LPG project, and (iii) general expenditures related to the cargo terminal facilities.
- Long‑term debt at the end of the first quarter totaled $167.8 million and is expected to decline to approximately $131 million, primarily as a result of scheduled amortizations and cash sweep mechanisms during 2026. From May 2025 through December 2026, long‑term debt is expected to be reduced by over $100 million, reflecting the strength of ODL’s cash generation.
Puerto Bahia
Puerto Bahia is a multi‑purpose maritime terminal (the “Port Facility”) located in Cartagena, Colombia, which consists of a hydrocarbons terminal and a general cargo terminal adjacent to the Bocachica access channel in the Cartagena Bay. It is strategically located near the Cartagena refinery operated by Reficar. The Port Facility has a total area of 150 hectares. Puerto Bahia’s income from operations is mainly generated from service contracts in the liquids terminal, which has a nominal capacity of 2,672,000 barrels, and from RORO, break bulk and containers services in the general cargo terminal. Frontera owns a 99.97% equity interest in Puerto Bahía.
Revenues from the Port Facility for the first quarter 2026 were $12.7 million driven by strong performance in the dry port, which experienced significant growth in handled volumes in RORO units and containers, partially offset by lower volumes from others, reflecting reduced throughput from certain key custumers.
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Three months ended March 31 |
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|
($M) |
2026 |
2025 |
|
Colombia |
||
|
Liquids terminal |
5,247 |
6,334 |
|
|
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