Parex to acquire Frontera's Colombian business

Executive Summary

• Parex Resources Inc. has submitted an all-cash acquisition proposal to acquire all of Frontera Energy Corp.'s Colombian upstream business.
• The offer values the transaction at $500 million (U.S.) plus the assumption of debt, representing a $125 million (U.S.) premium over the previously announced acquisition agreement.
• The deal includes a contingent payment of $25 million (U.S.) with terms substantially similar to the prior agreement, aiming to create the largest independent Colombian-focused energy company.

Key Details

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

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.