FRONTERA ANNOUNCES FOURTH QUARTER 2025, YEAR-END 2025 RESULTS AND RESERVES

Executive Summary

• Frontera reported Q4 2025 net loss of $663 million (including a $620 million non‑cash impairment tied to the pending Colombian E&P divestiture).
• The company signed a definitive agreement to sell its Colombian upstream assets to Parex for an enterprise value of ~US$750 million ($525 million equity consideration, plus debt assumption), targeting a shareholder cash distribution of ~$470 million.
• Year‑end 2025 proved + probable reserves stand at 133.8 MMboe (1P = 94.4 MMboe; 2P = 133.8 MMboe).

Key Details

• Financial Performance
• Operating EBITDA (continuing) Q4 2025: $68.9 M; FY 2025: $308 M.
• Net cash at 31 Dec 2025: $241.8 M; net debt: $219.5 M.
• Cash flow from operations FY 2025: $422.4 M (down from $508.1 M in 2024).

• Capital expenditures FY 2025: $209.2 M (incl. $53.2 M Q4).

• Production

• Total Colombian production Q4 2025: 38,332 boe/d (down modestly YoY).
• Heavy crude oil: 26,696 bbl/d; Light/medium crude: 8,918 bbl/d.

• Conventional natural gas: 5,261 mcf/d; NGLs: 1,795 boe/d.

• Divestiture to Parex

• Firm value of assets: ~US$750 M (equity $525 M + assumption of $225 M debt).
• Cash consideration: up to $500 M at closing; additional $25 M contingent payment.

• Expected shareholder cash distribution: $445‑$455 M payable at closing, plus up to $25 M contingent – total ≈ $470 M (≈ CAD 9.18 per share).

• Reserves (D&M Independent Assessment)

• Proved Developed Producing (PDP): 29.3 MMboe (‑20%).
• Proved Developed Non‑Producing (PDNP): 9.5 MMboe (+25%).
• Proved Undeveloped (PUD): 55.6 MMboe (‑1%).
• Total 1P: 94.4 MMboe (‑6% YoY).
• Probable: 39.5 MMboe (‑22%).

• Total 2P: 133.8 MMboe (‑12%).

• Infrastructure Business Highlights

• Adjusted Infrastructure EBITDA FY 2025: $116.6 M (up from $107.2 M in 2024).
• ODL pipeline transported 241,734 bbl/d in Q4 2025; Puerto Bahía handled 40,548 bbl/d liquids.

• Planned LNG regasification project with Ecopetrol: initial capacity ~126 MMcfd, scaling to ≥300 MMcfd by 2029.

• Shareholder & Governance

• Special shareholders’ meeting scheduled for 30 Apr 2026 to approve the Parex Arrangement and related Return‑of‑Capital resolution (requires 66⅔% approval).
• Normal Course Issuer Bid suspended pending transaction completion.

• Dividend payments suspended until the divestiture closes.

• Exploration Update

• Q4 2025: spudded Guapo‑1 well (VIM‑1 block) – reached total depth but was non‑commercial; to be plugged and abandoned.

• Ongoing seismic work on Llanos‑99 and VIM‑46 blocks for 2026 drilling program.

• Risk Management

• Hedging program covering ~14,400 bbl/d (average) at $65/$55 strike in Q1 2026; shifting to $62.7/$55 in Q2 2026.

Notable Quotes

• Gabriel de Alba, Chairman: “The transaction crystallizes a $125 million increase in cash consideration… unlocking approximately $1.3 billion of capital for shareholders.”
• Orlando Cabrales, CEO: “We achieved all 2025 guidance metrics and are positioned to deliver durable returns as an infrastructure‑focused company.”