FRONTERA ANNOUNCES SECOND QUARTER 2025 RESULTS

Executive Summary

• Frontera Energy reported a net loss of $455.2 million ($5.89/share) for Q2 2025, primarily driven by a $432.2 million non-cash impairment charge on its Corentyne block assets in Guyana due to disputes with the Government of Guyana.
• The company generated $76.1 million in Operating EBITDA and $27.1 million in Adjusted Infrastructure EBITDA, with total production averaging 41,055 boe/d (up 1% QoQ).
• Significant capital return activities included a C$91 million substantial issuer bid (largest to date) and the completion of an $80 million capped tender offer for its 2028 Senior Unsecured Notes.

Key Details

• Financial Performance:
  • Net Loss: $455.2 million ($5.89 basic/diluted per share).
  • Operating EBITDA: $76.1 million (down from $83.5 million in Q1 2025).
  • Adjusted Infrastructure EBITDA: $27.1 million.
  • Segment Income: $14.3 million.
  • Net Sales Realized Price: $58.86/boe.
  • Operating Netback: $33.52/boe.
  • Cash from Operations: $41.8 million.
  • Capital Expenditures: $59.4 million.
  • Total Cash Position: $197.5 million.
  • Net Debt (excluding unrestricted subsidiaries): $204.7 million (reduced 30% QoQ).
• Impairment & Guyana Dispute:
  • Recognized $432.2 million impairment on Corentyne E&E assets; carrying value written down to $Nil.
  • Government of Guyana rejected investors' claims regarding the Corentyne block license; 90-day consultation period expired.
  • Joint Venture maintains license is in good standing and prepared to assert legal rights.
• Production Metrics:
  • Total Production: 41,055 boe/d (Heavy: 27,535 bbl/d; Light/Medium: 11,127 bbl/d; Gas: 3,118 mcf/d; NGL: 1,846 boe/d).
  • Heavy crude production up 1% QoQ due to SAARA capacity and Cajua flow lines.
  • Light/Medium production up 3% QoQ due to well interventions.
  • Gas production up 37% QoQ due to VIM-1 commercialization.
• Capital Returns & Debt:
  • Substantial Issuer Bid (SIB): Completed July 15, 2025; repurchased 7,583,333 shares at CAD$12.00/share for C$91.0 million (92.6% participation).
  • Bond Tender Offer: Repurchased $80 million principal of 2028 Senior Unsecured Notes for $57.6 million cash, recognizing an $11.7 million gain.
  • Dividend Declared: C$0.0625 per share ($3.5 million aggregate), payable Oct 16, 2025.
• Operational Updates:
  • Drilled 26 development wells in Colombia (Quifa and CPE-6 blocks).
  • ODL Pipeline Volumes: 235,804 bbl/d.
  • Puerto Bahia Liquids Volumes: 53,280 bbl/d; Reficar connection completed, first transported volumes expected Q3 2025.
  • SAARA Water Treatment: Processed 119,409 bwpd.
• Ecuador Divestment:
  • Agreed to divest 50% interest in Perico and Espejo blocks for $7.8 million cash plus $750,000 contingent consideration.
  • Closing expected Q2 2026.
• 2025 Guidance Update (Colombia Only):
  • Production: 39,500 – 41,000 boe/d.
  • Capex: $196 – $248 million (Development Facilities: $45-65M; Exploration: $25-35M).
  • Operating EBITDA (at $70/bbl Brent): $320 – $360 million.
  • Adjusted Infrastructure EBITDA: $110 – $125 million.

Notable Quotes

• Gabriel de Alba, Chairman: "Despite a volatile global macro-economic and oil market backdrop, Frontera continued to execute on its strategic goals... The Company generated $76.1 million in Operating EBITDA... and maintaining a strong balance sheet, finishing the quarter with a total cash balance of $197.5 million while reducing its upstream net debt by 30%."
• Orlando Cabrales, CEO: "Frontera's second quarter financial and operating results demonstrate the decisive steps we are taking to deliver stakeholder value... We increased our total production quarter over quarter driven by increased processing capacity at SAARA... and new commercialized volumes of natural gas production from the VIM-1 block."