FRONTERA ENERGY CORPORATION ANNOUNCE DIVESTMENT OF NON-CORE ASSETS IN ECUADOR

Executive Summary

• Frontera Energy Corporation has agreed to divest its 50% working interest in the Perico and Espejo oil blocks in Ecuador to a buyer (not explicitly named in the release).
• The transaction involves total cash consideration of $7.8 million, subject to customary working capital adjustments, plus a contingent earn-out of $750,000 if the Perico block reaches specific production targets.
• The deal is expected to close by the second quarter of 2026, pending regulatory approvals and operational takeover by the Ministry of Energy of Ecuador.

Key Details

• Assets Divested: 50% working interest in the Perico and Espejo blocks in Ecuador.
• Base Consideration: $7.8 million USD in cash, subject to working capital and other customary adjustments as of January 1, 2025.
• Contingent Consideration: An additional $750,000 USD payable to Frontera if the Perico block achieves cumulative gross production of two million barrels from January 1, 2025.
• Closing Conditions: Subject to customary closing conditions, including receipt of regulatory approvals and operations takeover from the Ministry of Energy of Ecuador.
• Expected Closing Date: Second quarter of 2026.
• Production Metrics: The divested assets averaged net oil production of approximately 1,000 barrels of oil per day (boed) for July 2025.
• Strategic Rationale: The transaction aligns with Frontera's strategy of "maximizing value over volumes" and allows for a stronger focus on higher-impact Colombian upstream operations.
• Future Outlook: The Company stated it will continue to consider options to enhance shareholder value, including potential future separations or strategic transactions involving its infrastructure business.

Notable Quotes

• "This transaction is consistent with the Company's strategy of maximizing value over volumes, and supports a stronger focus on the Company higher-impact Colombian upstream operations."