Parex to acquire Frontera's Colombian business

Executive Summary

• Parex Resources Inc. has submitted an all-cash acquisition proposal to Frontera Energy Corp. to acquire all of Frontera's Colombian upstream business.
• The offer includes a base consideration of $500 million (U.S.) plus the assumption of debt, along with a contingent payment of $25 million (U.S.).
• This proposal represents a $125 million (U.S.) premium over the existing acquisition agreement previously announced with Frontera.

Key Details

• Transaction Structure: All-cash offer for 100% of Frontera Energy's Colombian upstream business.
• Base Consideration: $500 million (U.S.).
• Debt: Parex will assume existing debt associated with the assets.
• Contingent Payment: $25 million (U.S.), with terms substantially the same as the existing acquisition agreement.
• Premium: The offer includes a $125 million (U.S.) premium compared to the prior agreement.
• Strategic Rationale: Parex states that combining portfolios would create the largest independent Colombian-focused energy company, aiming for greater scale, enhanced capital efficiency, stronger free cash flow generation, and a more resilient platform for long-term growth.
• Current Relationship: Parex currently holds a partnership at VIM-1, providing insight into Frontera's assets.

Notable Quotes

• "Our all-cash offer to acquire Frontera's Colombian-based upstream business provides immediate and greater value for Frontera and its shareholders. Based on the premium offered, we expect that the Frontera board will conclude that our proposal will be a superior proposal as defined by the previously announced acquisition agreement. We look forward to further discussions with Frontera's board and management team to finalize a transaction." — Imad Mohsen, President and CEO, Parex Resources Inc.