FRONTERA ANNOUNCES DEFINITIVE AGREEMENT WITH GEOPARK TO DIVEST ITS COLOMBIAN E&P ASSETS PORTFOLIO FOR A FIRM VALUE OF $622 MILLION

Executive Summary

• Frontera Energy entered a definitive agreement to sell its Colombian upstream assets (including oil & gas fields, water‑treatment plant and palm‑oil plantation) to Geopark Limited for up to $622 million (equity value $400 M + assumption of $310 M debt).
• The transaction will generate an immediate cash distribution of roughly $370 M (≈ CAD 7.18 per share) to shareholders, with a further $25 M contingent payment tied to development milestones.
• Post‑sale, Frontera will focus on its infrastructure business (ODL pipeline and Puerto Bahía port), retaining interests in Guyana and other non‑Colombian assets, targeting 2025 Distributable Cash Flow of ~$77 M.

Key Details

• Transaction Structure
• Firm equity value: up to $400 M (including $375 M payable at closing + $25 M contingent milestone payment).
• Geopark will assume Frontera’s $310 M of 2028 senior unsecured notes and $80 M Chevron pre‑payment facility, bringing total firm value to $622 M.

• $75 M of the closing consideration has been placed in escrow; remaining $300 M payable at closing, subject to customary adjustments.

• Shareholder Return

• Planned cash distribution: approximately $370 M (CAD 7.18 per share) after transaction close and shareholder approval.

• Distribution amount will be communicated prior to the special shareholders’ meeting slated for April 2026.

• Pricing Premiums

• Equity purchase price reflects a 25 % premium to the 90‑day VWAP and an 18 % premium to the current share price (E&P assets only).

• Including cash on hand and a $150 M valuation for the retained infrastructure business, implied post‑transaction share price is CAD 10.67, representing >60 % premium over today’s closing price.

• Closing Timeline & Conditions

• Effective date: January 1 2026; expected close in H2 2026 pending:
  • Shareholder approval (≥ 66⅔ % of votes cast).
  • Court approval of the plan of arrangement (BC Supreme Court).
  • Required regulatory approvals.

• No financing condition; Geopark will fund the purchase with existing liquidity and committed facilities.

• Post‑Transaction Business Focus

• Retains full ownership of:
  • 35 % equity in ODL crude oil pipeline (via Frontera Pipeline Investment AG).
  • 99.97 % equity in Puerto Bahía port operations.
  • Interests in Guyana and other minor non‑Colombian assets.
• Infrastructure segment generated $314.8 M EBITDA, with net debt of $158.6 M (post‑cash).

• Expected 2025 infrastructure Distributable Cash Flow: ~$77 M (ODL dividends $61.6 M + Puerto Bahía EBITDA $15 M).

• Advisors & Fairness Opinion

• Financial advisor: Citi.
• Fairness opinion provided by BMO Nesbitt Burns Inc. (fixed‑fee, non‑contingent).

• Legal counsel: Blake Cassels & Graydon LLP.

• Board Support

• Unanimous board recommendation in favor of the transaction; major shareholders (Catalyst Capital Group – ~41 % and Gramercy Funds Management – ~12 %) have entered support agreements to vote “yes.”

Notable Quotes

• Gabriel de Alba, Chairman: “The Board has maximized shareholder value, unlocking ≈ $1.1 Billion—including > $480 M via dividends and buybacks—through this strategic divestiture.”
• Orlando Cabrales, CEO: “This transaction converts oil‑price exposure into cash while preserving upside through our standalone infrastructure business anchored by ODL and Puerto Bahía.”