FRONTERA COMPLETES DIVESTMENT OF ITS COLOMBIAN E&P ASSETS PORTFOLIO TO PAREX RESOURCES; POSITIONS ITSELF AS A STANDALONE INFRASTRUCTURE COMPANY ANNOUNCES RETURN OF CAPITAL DISTRIBUTION TO SHAREHOLDERS

Executive Summary

• Frontera Energy Corporation completed the sale of its Colombian E&P assets to Parex Resources Inc. for a total consideration of $750 million, strategically pivoting to become a standalone infrastructure company.
• The company announced an initial return of capital distribution of C$8.34 per share (~$430 million aggregate), bringing total capital returned to investors across multi-year value creation initiatives to approximately $1.3 billion.
• Frontera will retain $64 million on its balance sheet to reduce debt and fund growth projects, targeting 2026 adjusted EBITDA of $110-120 million and distributable free cash flow of $80-85 million.

Key Details

• Transaction Closing: Closed June 1, 2026, following 99.95% shareholder approval for the sale and 100% voting in favor of the return of capital at a special meeting on April 30, 2026. Final Order from the Supreme Court of British Columbia received, and all regulatory approvals obtained.
• Assets Transferred: 100% of Frontera International Holdings B.V., including all Colombian E&P assets, a reverse osmosis water treatment facility, and a palm oil plantation.
• Transaction Consideration Structure: $500 million upfront cash, $225 million assumed net debt, and a $25 million contingent payment payable if the Quifa contract with Ecopetrol S.A. is extended prior to the first anniversary of closing. Total implied transaction value: $750 million.
• Return of Capital Distribution Amount: C$8.34 per common share (~$430 million aggregate), calculated based on 70,768,888 common shares issued and outstanding.
• Distribution Dates & Trading Mechanics: Record date is June 12, 2026; payment date is June 23, 2026. TSX will implement due bill trading between the opening of the record date and end of payment date trading. Shares will trade ex-distribution on June 24, 2026.
• Retained Capital Allocation: $64 million cash retained on balance sheet ($25 million to reduce debt/liabilities and $39 million earmarked for growth projects at Puerto Bahía).
• 2026 Financial Outlook: Expected adjusted EBITDA of $110-120 million; expected distributable free cash flow of $80-85 million.
• Strategic Pivot: Transitioning to a focused infrastructure platform with key growth initiatives including an LNG regasification project with Ecopetrol S.A. and LPG import facilities at Puerto Bahía.
• Advisors: Citi served as financial advisor; Blake, Cassels & Graydon LLP and McMillan LLP acted as legal counsel.

Notable Quotes

• "The sale of our Colombian E&P assets to Parex marks an important milestone in our strategy to maximize long-term value for shareholders. The return of approximately $430 million of capital, equivalent to C$8.34 per share, together with the allocation of approximately $64 million of cash to Frontera Infrastructure's balance sheet, reflects a disciplined capital allocation approach focused on delivering immediate value to shareholders while preserving the financial strength and flexibility required to unlock the significant value embedded in our infrastructure platform." – Gabriel de Alba, Chairman
• "The completion of this transaction marks an important milestone for Frontera and reflects the successful execution of a disciplined strategy to deliver significant value to shareholders... As we move forward, Frontera is well positioned as a focused infrastructure company with a clear path for growth." – Orlando Cabrales Segovia, CEO