Frontera Energy (FEC) Q2 2024 earnings summary

Executive summary

• Achieved strong operational and financial results in Q2 2024, with production up 5% quarter-over-quarter to 39,912 barrels per day and heavy crude production up 6% to 24,800 barrels per day.

• Entered a 2-year water treatment contract with Ecopetrol, aiming to increase Quifa Block production capacity.

• Broke ground on a bidirectional hydrocarbon flow line between Puerto Bahía and Reficar, expected operational by year-end 2024.

• Announced a joint venture with Gasco to develop a $50–$60 million LPG storage facility at Puerto Bahía.

• Declared a quarterly dividend of CAD 0.0625 per share and announced a $30 million substantial issuer bid for share repurchases, with over $51 million capital returned to stakeholders year-to-date.

Financial highlights

• Recorded a net loss of $2.8 million for Q2 2024, despite $59 million in income from operations and $13 million share of income from ODL.

• Operating EBITDA reached $110.3 million, benefiting from higher production and oil prices.

• Cash flow from operations totaled $150 million, supported by strong oil prices, tax refunds, and ODL dividends.

• Capital expenditures were $80.2 million, mainly for drilling and infrastructure projects.

• Total cash position as of June 30, 2024, was $215 million, including $181 million unrestricted cash.

Outlook and guidance

• On track to achieve 2024 capital, production, and EBITDA guidance despite inflationary pressures.

• SAARA water treatment plant targeted to reach 250,000 barrels/day capacity by year-end.

• Reficar connection expected operational by December 2024, with potential to double port liquid handling volumes.

• Continued pursuit of strategic alternatives for Corentyne block in Guyana and Colombian infrastructure business.

• Production in June and July averaged 40,600 boe/d, supporting full-year targets.