Recorded Net Income of $197.8 Million in Q4'22 and $286.6 Million for FY'22
Delivered Full Year Operating EBITDA of
$641.9 Million, Up 70%
On
Frontera's $98/Bbl Weighted Average Brent Price
Delivered 41,382 Boe/d 2022 Average Daily
Production, Up 9%
Generated $54.3
Million of Midstream Segment Income,
From
Standalone and Growing Midstream Business
Wei-1 Well Currently Ahead of
Schedule and At 15,400 Feet
Repurchased 9.6 Million Common Shares Or 20%
of the Public Float,
Returned More Than $91.4 Million To Shareholders in 2022 Via SIB and
NCIB
Achieved 102% of 2022 ESG Goals, Offset 52% Of
Emissions Through Carbon Credits,
Preserved And Restored
1,747 Hectares of Key Connectivity Corridors In Casanare And Meta,
Colombia
The Company Reiterates 2023 Production
Guidance Of 40,000-43,000 Boe/d,
Increased
Water-Handling Capacity at Quifa and CPE-6 Key
Milestones on Path to 50,000 Boe/d Future
CALGARY,
AB, Mar. 1, 2023 /CNW/ - Frontera Energy
Corporation (TSX: FEC) ("Frontera" or the "Company")
today reported financial and operational results for the fourth
quarter and year ended December 31,
2022. All financial amounts in this news release are in
United States dollars, unless
otherwise stated.
Gabriel de Alba, Chairman of
the Board of Directors, commented:
"2022 was a strong financial and operational year for
Frontera. The Company delivered average daily production of 41,382
boe/d, a 9% increase compared to its 2021 production average and
in-line with its increased and tightened 2022 production guidance.
The Company increased full year operating EBITDA by 70% to
$641.9 million, within the Company's
$90-$100/bbl 2022 guidance range. The Company
finished the year with a total cash position of approximately
$313 million including restricted
cash of $23 million.
Frontera remains committed to enhancing shareholder returns.
In 2022, the Company returned over $91
million to shareholders through its NCIB and SIB programs.
Since 2018, Frontera has returned more than $300 million to shareholders through dividends
and share buybacks while maintaining strong credit metrics. In
addition, since 2017, the Company has resolved more than
$2.6 billion in contingent
liabilities and commitments, permanently eliminating legacy
issues.
The Company is focused on unlocking shareholder value from
its upstream Colombia and
Ecuador business, its standalone
and growing midstream business and its potentially transformational
offshore exploration program in Guyana.
In 2022, Frontera advanced the Company's exciting development
and lower-risk exploration portfolio in Colombia and Ecuador and started investments in additional
water-handling facilities at Quifa and CPE-6 in support of the
Company's 50,000 boe/d production target.
Also in 2022, Frontera strengthened its midstream portfolio
with the acquisition of the remaining 40% interest in Pipeline
Investment Limited. Frontera now owns 35% of the ODL pipeline,
which generated over $215 million in
EBITDA in 2022. Since 2019, the Company has increased its interest
in Puerto Bahia by approximately 60%
to 99.8%. Frontera's interest in the ODL pipeline and in
Puerto Bahia creates a unique
standalone midstream business which provides shareholders with
significant upside potential.
In Guyana, the Joint Venture
discovered light oil and condensate at the Kawa-1 well, offshore
Guyana and has successfully
drilled the first prospective geologic horizons in the Upper
Maastrichtian at the Wei-1 well, the Joint Venture's second
exploration well in the Corentyne block, several days ahead of
schedule.
Frontera's assets strong operating performance and sound
balance sheet has positioned the Company to deliver its 2023
objectives and to continue generating value for shareholders by
unlocking the sum of its parts."
Orlando Cabrales, Chief
Executive Officer (CEO), Frontera, commented:
"I am pleased with Frontera's 2022 operating and financial
results. We delivered record production at CPE-6, which contributed
to 2% quarter over quarter production growth to 41,806 boe/d and 9%
year over year growth to 41,382 boe/d. The Company increased
water-handling capacity at Quifa to approximately 1,550,000 bwpd at
year end and we plan to grow to 2,000,000 bwpd by mid-2024 as the
SAARA water treatment facility comes on-line and at CPE-6 where the
Company expects to increase oil and water-handling capacity to
240,000 bwpd in 2023 and 480,000 bwpd in 2025, building the
foundation to grow production to 50,000 boe/d.
The Company safely and responsibly executed $314 million in capital spending in support of
its Colombia and Ecuador upstream onshore business and
$104 million on its exciting
Guyana offshore exploration
program. I am also pleased with the Company's continued efforts to
manage its cost structure. While production costs were higher year
over year due to increased energy tariffs, maintenance, internal
transportation costs and well services, Frontera's transportation
costs and G&A were in-line with 2021. The Company also
increased its operating netback by 60% to $59.78/boe, increased its net sales realized
price by 40% to $82.59/boe, reduced
its restricted cash position by approximately $40 million and increased its uncollateralized
credit lines to $118.4
million.
In our Midstream segment, we revamped Puerto Bahia's leadership, adding expertise in
the container business to drive incremental opportunities in the
dry cargo terminal. For the year ended 2022, revenues from
third-party liquids and general cargo through Puerto Bahia increased 41% to approximately
$40 million, compared to 2021. Over
80% of Puerto Bahia's EBITDA is now
generated from third parties. For 2022, the midstream business
generated approximately $47 million
in segment cash flow from operations.
Frontera achieved 102% of its 2022 ESG Goals, offset 52% of
emissions, preserved and restored 1,747 hectares of key
connectivity corridors in Casanare and Meta, Colombia and recycled 15% of its operating
water and 17% of its solid waste. The Company invested
approximately $4.31 million on
education, inclusive economic development, and quality of life
initiatives, benefiting 73,101 people through 218 social projects
in Ecuador, Peru and Colombia.
Importantly, I'm pleased to confirm the Company's 2023
production guidance of 40,000-43,000 boe/d."
Fourth Quarter 2022 Operational and Financial Summary
|
|
|
|
|
Year
Ended
December
31
|
|
|
Q4
2022
|
Q3
2022
|
Q4
2021
|
2022
|
2021
|
|
|
|
|
|
|
|
Operational
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Heavy crude oil
production (1)
|
(bbl/d)
|
22,144
|
20,945
|
20,912
|
21,441
|
19,326
|
Light and medium crude
oil production (1)
|
(bbl/d)
|
17,073
|
17,428
|
16,300
|
17,274
|
17,218
|
Total crude oil
production
|
(bbl/d)
|
39,217
|
38,373
|
37,212
|
38,715
|
36,544
|
Conventional natural
gas production (1)
|
(mcf/d)
|
9,097
|
9,969
|
4,663
|
9,741
|
5,022
|
Natural
gas liquids (1)
|
(boe/d)
|
993
|
911
|
575
|
958
|
393
|
Total production
(2)
|
(boe/d)
(3)
|
41,806
|
41,033
|
38,605
|
41,382
|
37,818
|
|
|
|
|
|
|
|
Inventory
Balance
|
|
|
|
|
|
|
Colombia
|
(bbl)
|
683,416
|
590,984
|
326,861
|
683,416
|
326,861
|
Peru
|
(bbl)
|
480,200
|
480,200
|
480,200
|
480,200
|
480,200
|
Ecuador
|
(bbl)
|
75,164
|
66,729
|
–
|
75,164
|
–
|
Total
Inventory
|
(bbl)
|
1,238,780
|
1,137,913
|
807,061
|
1,238,780
|
807,061
|
|
|
|
|
|
|
|
Oil and gas sales, net
of purchases (4)
|
($/boe)
|
82.90
|
90.53
|
75.12
|
91.73
|
66.54
|
Realized (loss) on
risk management contracts (5)
|
($/boe)
|
(1.32)
|
(1.30)
|
(1.87)
|
(1.22)
|
(4.01)
|
Royalties
(5)
|
($/boe)
|
(6.04)
|
(7.23)
|
(3.62)
|
(7.83)
|
(2.66)
|
Dilution costs
(5)
|
($/boe)
|
(0.07)
|
(0.07)
|
(0.10)
|
(0.09)
|
(0.72)
|
Net sales realized
price (4)
|
($/boe)
|
75.47
|
81.93
|
69.53
|
82.59
|
59.15
|
Production costs
(5)
|
($/boe)
|
(11.85)
|
(11.45)
|
(12.71)
|
(12.35)
|
(11.46)
|
Transportation costs
(5)
|
($/boe)
|
(10.57)
|
(10.70)
|
(9.02)
|
(10.46)
|
(10.43)
|
Operating netback per
boe (4)
|
($/boe)
|
53.05
|
59.78
|
47.80
|
59.78
|
37.26
|
|
|
|
|
|
|
|
Financial
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and gas sales, net
of purchases (6)
|
($M)
|
261,785
|
305,338
|
269,525
|
1,109,602
|
815,793
|
Realized (loss) on
risk management contracts
|
($M)
|
(4,182)
|
(4,393)
|
(6,692)
|
(14,733)
|
(49,119)
|
Royalties
|
($M)
|
(19,076)
|
(24,371)
|
(12,974)
|
(94,709)
|
(32,572)
|
Dilution
costs
|
($M)
|
(235)
|
(223)
|
(368)
|
(1,132)
|
(8,773)
|
Net sales
(6)
|
($M)
|
238,292
|
276,351
|
249,491
|
999,028
|
725,329
|
Net income (loss)
(7)
|
($M)
|
197,796
|
(26,893)
|
629,376
|
286,615
|
628,133
|
Per share –
basic
|
($)
|
2.29
|
(0.30)
|
6.60
|
3.16
|
6.50
|
Per share –
diluted
|
($)
|
2.25
|
(0.30)
|
6.40
|
3.08
|
6.29
|
General and
administrative
|
($M)
|
12,761
|
12,549
|
12,144
|
55,063
|
52,134
|
Outstanding Common
Shares
|
Number of
Shares
|
85,592,075
|
86,575,175
|
94,695,694
|
85,592,075
|
94,695,694
|
Operating EBITDA
(6)
|
($M)
|
144,994
|
173,207
|
148,645
|
641,877
|
378,179
|
Cash provided by
operating activities
|
($M)
|
138,312
|
120,804
|
113,482
|
620,479
|
327,380
|
Capital expenditures
(6)
|
($M)
|
134,165
|
76,018
|
135,458
|
417,563
|
314,257
|
Cash and cash
equivalents - unrestricted
|
($M)
|
289,845
|
253,550
|
257,504
|
289,845
|
257,504
|
Restricted cash short
and long-term (8)
|
($M)
|
23,202
|
55,552
|
63,321
|
23,202
|
63,321
|
Total cash
(8)
|
($M)
|
313,047
|
309,102
|
320,825
|
313,047
|
320,825
|
Total debt and lease
liabilities (8)
|
($M)
|
511,552
|
533,077
|
560,135
|
511,552
|
560,135
|
Consolidated total
indebtedness (Excl. Unrestricted Subsidiaries)
(9)
|
($M)
|
407,808
|
412,926
|
416,883
|
407,808
|
416,883
|
Net Debt (Excluding
Unrestricted Subsidiaries) (9)
|
($M)
|
178,534
|
205,625
|
207,578
|
178,534
|
207,578
|
|
|
|
1. References to heavy
crude oil, light and medium crude oil combined, conventional
natural gas and natural gas liquids in the above table and
elsewhere in this news release refer to the heavy crude oil, light
and medium crude oil combined, conventional natural gas and natural
gas liquids, respectively, product types as defined in National
Instrument 51-101 - Standards of Disclosure for Oil and Gas
Activities ("NI 51-101").
|
|
2. Represents W.I.
production before royalties. See "Advisories - Oil and Gas
Information Advisories".
|
|
3. Boe has been
expressed using the 5.7 to 1 Mcf/bbl conversion standard required
by the Colombian Ministry of Mines & Energy. See "Advisories -
Oil and Gas Information Advisories".
|
|
4. Non-IFRS ratio
(equivalent to a "non-GAAP ratio", as defined in National
Instrument 52-112 - Non-GAAP and Other Financial Measures
Disclosure ("NI 52-112"). See "Advisories - Non-IFRS and
Other Financial Measures''.
|
|
5. Supplementary
financial measure (as defined in NI 52-112). See "Advisories -
Non-IFRS and Other Financial Measures''.
|
|
6. Non-IFRS financial
measure (equivalent to a "non-GAAP financial measure", as defined
in NI 52-112). See "Advisories - Non-IFRS and Other Financial
Measures''.
|
|
7. Net income (loss)
attributable to equity holders of the Company.
|
|
8. Capital management
measure (as defined in NI 52-112). See "Advisories - Non-IFRS and
Other Financial Measures''.
|
|
9. "Unrestricted
Subsidiaries" include CGX Energy Inc. ("CGX"), listed on the
TSX Venture Exchange under the trading symbol "OYL", Frontera ODL
Holding Corp., including its subsidiary Pipeline Investment Ltd.,
Frontera BIC Holding Ltd., and Frontera Bahía Holding Ltd.,
including its subsidiary Sociedad Portuaria Puerto Bahía S.A.
("Puerto Bahia"). Refer to the "Liquidity and Capital
Resources" section on page 29 of the MD&A (as defined
below).
|
|
|
Fourth Quarter and Full Year Operational and Financial
Results:
- The Company recorded net income of $197.8 million or $2.29/share in the fourth quarter of 2022,
compared with a net loss of $26.9
million or $0.30/share in the
prior quarter and net income of $629.4
million or $6.60/share in the
fourth quarter of 2021. The Company's fourth quarter net income
included operating income of $296.8
million (including a non-cash reversal of impairment of
$229.8 million), partially offset by
$68.6 million of income tax expense,
foreign exchange loss of $28.2
million and finance expense of $14.2
million. This compared to net income of $629.4 million in the fourth quarter of 2021,
which included operating income of $697.1
million (including a non-cash reversal of impairment of
$586.7 million) and $36.1 million income tax recovery, partially
offset by $103.6 million related to
currency translation adjustments ("CTA") as a result of the
disposal of the Company's 43.03% interest in Bicentenario.
- For the year ended December 31,
2022, the Company reported net income of $286.6 million, which included operating income
of $643.4 million (including a
non-cash reversal of impairment of $229.8
million), partially offset by income tax expense of
$249.3 million, foreign exchange
losses of $76.4 million (primarily
related to our midstream business) and finance expense of
$53.0 million. This compared to net
income of $628.1 million for the year
ended December 31, 2021, which
included $854.2 million of operating
income (including a non-cash reversal of impairment of $586.7 million), partially offset by $103.6 million related to the CTA as a result of
the disposal of the Company's 43.03% interest in Bicentenario,
$41.9 million loss on risk management
contracts, $51.8 million in finance
expense, and $29.1 million debt
extinguishment costs.
- Production averaged 41,806 boe/d as increased water-handling
capacity contributed to higher oil production, up approximately 2%
compared to 41,033 boe/d in the prior quarter and 38,605 boe/d in
the fourth quarter of 2021. In 2022, Frontera averaged 41,382
boe/d, in-line with the Company's increased and tightened 2022
guidance of 41,000-43,000 boe/d and up 9.4% compared with 37,818
boe/d in 2021. See the table above for production by product type
for the prior quarter, fourth quarter of 2021, and year ended 2022
and 2021.
- Operating EBITDA was $145.0
million in the fourth quarter of 2022 compared with
$173.2 million in the prior quarter
and $148.6 million in the fourth
quarter of 2021. The decrease in operating EBITDA quarter over
quarter was primarily a result of lower commodity prices, lower
volumes sold in the fourth quarter and higher energy input costs.
Frontera's weighted average Brent price was $98/bbl in 2022, generating $641.9 million of EBITDA, up 70% compared to
$378.2 million in 2021 and within the
$90-$100/bbl 2022 guidance range.
- Cash provided by operating activities in the fourth quarter of
2022 was $138.3 million, compared
with $120.8 million in the prior
quarter and $113.5 million in the
fourth quarter of 2021. The increase in cash provided by operating
activities quarter over quarter was primarily due to positive
variations in working capital offset by lower Brent benchmark oil
prices.
- The Company reported a total cash position of $313.0 million at December
31, 2022 relatively flat compared to $309.1 million at September 30, 2022 and $320.8 million at December
31, 2021. During the quarter, the Company invested
$42.4 million in debt service and
interest, $14.9 million payment as
result of the non-controlling interest acquisition and $7.8 million to repurchase shares. The Company
generated $620.5 million of cash from
operations in 2022, compared to $327.4
million in 2021. During the year, the Company primarily
invested $417.6 million in capital
expenditures, $93.9 million in debt
service payments, $91.4 million in
share buybacks and $36 million to
increase its indirect interest in the ODL pipeline to 35%.
- The Company's restricted cash position was $23.2 million at December
31, 2022 compared to $55.6
million in the third quarter of 2022, a decrease of
approximately $32.4 million. The
decrease in restricted cash quarter over quarter is primarily due
to restricted cash being released from (i) the Puerto Bahía Debt
Service Reserve Account ("DSRA") used for Debt Service
payment on December 15, 2022, for
$24.7 million, (ii) replacement of
abandonment funds with letters of credit of $7.9 million and (iii) foreign exchange
fluctuations. In total, the Company released approximately
$40.1 million of restricted cash
during 2022.
- The Company has various uncommitted bilateral credit lines. As
of December 31, 2022, the Company had
increased its uncollateralized credit lines to $118.4 million, an increase of $28.7 million compared to December 31, 2021.
- As at December 31, 2022, the
Company had a total inventory balance of 1,238,780 bbls compared to
1,137,913 bbls at September 30,
2022.
- Capital expenditures were approximately $134.2 million in the fourth quarter of 2022,
compared with $76.0 million in the
prior quarter and $135.5 million in
the fourth quarter of 2021. The Company executed approximately
$417.6 million in total capital
spending in 2022, below its updated 2022 capital guidance of
$435-495 million and compared to
$314.3 million in 2021. The increase
in capital expenditures quarter-over-quarter and year-over-year was
primarily due to increased development drilling at Quifa, CPE-6 and
Cubiro blocks, development facilities spending at Quifa, CPE-6 and
Guatiquia blocks, exploration spending in Colombia and Ecuador and spending in advance of spudding
the Wei-1 well offshore Guyana.
- The Company's net sales realized price was $75.47/boe in the fourth quarter of 2022,
compared to $81.93/boe in the prior
quarter and $69.53/boe in the fourth
quarter of 2021. The decrease in net sales realized price
quarter-over-quarter was primarily driven by the decrease in Brent
benchmark oil price compared with the previous quarter, partially
offset by lower royalties resulting from decreases in Brent
benchmark oil prices. The Company's net sales realized price in
2022 was $82.59/boe, up 40% compared
to $59.15/boe in 2021. The increase
year-over-year was mainly a result of higher Brent benchmark oil
prices, lower losses on risk management contracts, reduction in
dilution costs, and improved differentials during 2022, partially
offset by higher cash royalties.
- The Company's operating netback was $53.05/boe in the fourth quarter of 2022,
compared with $59.78/boe in the prior
quarter and $47.80/boe in the fourth
quarter of 2021. The decrease in operating netback
quarter-over-quarter was primarily due to lower net sales realized
price as a result of lower average Brent benchmark oil prices. The
Company's operating netback for the year ended December 31, 2022, was $59.78/boe, up 60% compared to $37.26/boe in 2021. The increase in operating
netback year-over-year was primarily due to higher net sales
realized price partially offset by higher production costs as
explained below.
- Production costs averaged $11.85/boe in the fourth quarter of 2022, up
slightly compared with $11.45/boe in
the prior quarter and $12.71/boe in
the fourth quarter of 2021. Frontera's production costs averaged
$12.35/boe in 2022, higher than the
Company's 2022 guidance range of $11.00-$12.00/boe.
The increase in production costs quarter-over-quarter and
year-over-year was primarily due to increased energy tariffs,
maintenance, internal transportation costs and well services.
- Transportation costs averaged $10.57/boe in the fourth quarter of 2022, down
slightly compared with $10.70/boe in
the prior quarter and up from $9.02/boe in the fourth quarter of 2021 mainly
due to additional volumes transported in Ecuador during the fourth quarter of 2022 and
the one-time prepaid services in Colombia recorded as lower transportation
costs during the fourth quarter of 2021 after the implementation of
the conciliation agreement between Frontera, Cenit Transporte y
Logistica de Hidrocarburos S.A.S. and Oleoducto Bicentenario de
Colombia S.A.S. ("Bicentenario"). Frontera's transportation
costs averaged $10.46/boe in 2022,
within the Company's 2022 guidance range of $10.00-$11.00/boe
and essentially flat when compared to $10.43/boe in 2021.
- The Company recorded realized losses on risk management
contracts of approximately $4.2
million in the fourth quarter of 2022 compared to a realized
loss of approximately $4.4 million in
the third quarter of 2022 and a loss of $6.7
million in the fourth quarter of 2021. The realized loss on
risk management contracts quarter-over-quarter resulted from cash
paid for premiums related to put options settled during the period.
The Company recorded a realized loss on risk management contracts
of $14.7 million in 2022 compared
with $49.1 million in 2021. In 2022,
the Company hedged 40% of its production at $70/bbl floors with full price upside
exposure.
- The Company's Midstream segment reported income from operations
for the three months and year ended December
31, 2022, of $14.9 million and
$54.3 million respectively, compared
with $19.4 million and $77.8 million in the same periods of 2021 which
included Frontera Colombia's liquids terminal take or pay which
expired in December 2021. For the
year ended 2022, revenues from third party liquids and general
cargo through Puerto Bahia was
$39.6 million, up 41% compared to
$28.1 million in 2021. Today, over
80% of Puerto Bahia's EBITDA is
generated from third parties. For the year ended 2022, ODL
generated $215.1 million of EBITDA
and $120.1 million of net income,
which represented 11% and 11% year over year growth, respectively.
Frontera, through its wholly-owned subsidiary Pipeline Investments
Limited, has a 35% equity interest in ODL. For additional
information regarding the Company's Midstream segment please refer
to the Company's MD&A.
- On December 2, 2022, Fitch
Ratings affirmed Frontera's Long-Term Foreign and Local Currency
Issuer Default Ratings (IDRs) at 'B'. In addition, Fitch affirmed
Frontera's senior unsecured notes at 'B'/'RR4'. The Rating Outlook
is Stable. On September 22, 2022,
S&P Global Ratings upgraded its outlook for Frontera from
'stable' to 'positive' and affirmed its B+ issuer credit and
issue-level ratings.
- In 2022, Frontera achieved 102% of its ESG goals for the year
compared with 98% in 2021. The Company offset 52% of its emissions
through carbon credits in 2022 compared with 41% in 2021, restored
and reforested 1,747 hectares of key connectivity corridors in
Casanare and Meta Departments, Colombia, compared with 765 hectares in 2021
and recycled 15% of its operating water and 17% of its solid waste.
See below for more information.
Enhancing Shareholder Returns
Since 2018, Frontera has returned more than $300 million to shareholders through dividends
and share buybacks while maintaining a strong balance sheet. In
2022, the Company repurchased approximately 9.6 million Common
Shares for cancellation, or 20% of the public float, returning more
than $91.4 million to shareholders
through its Normal Course Issuer Bid ("NCIB") and a
Substantial Issuer Bid ("SIB").
NCIB:
- Under the Company's current NCIB which commenced on
March 17, 2022, and will expire on
March 16, 2023, Frontera is
authorized to repurchase for cancellation up to 4,787,976 of the
Company's common shares ("Common Shares"). During the fourth
quarter of 2022, the Company repurchased for cancellation 983,100
Common Shares during the fourth quarter of 2022 at a cost of
approximately $7.8 million. As of
March 1, 2023, the Company has
repurchased approximately 4.3 million Common Shares for
cancellation for approximately $40.9
million with approximately 0.5 million additional Common
Shares remaining available for repurchase under the NCIB.
SIB:
- On June 24, 2022, the Company
launched a SIB, pursuant to which the Company offered to purchase
from shareholders for cancellation up to C$65.0 million of its outstanding Common Shares.
On August 11, 2022, the Company
announced that, in accordance with the terms and conditions of the
SIB, the Company took up for cancellation 5,416,666 Common Shares
at a price of C$12.00 per Common
Share, for a total cost of $51.2
million (funded by cash, representing an aggregate purchase
price of C$65.0 million plus
transaction costs). The Common Shares taken up for cancellation
under the SIB represented approximately 5.84% of the total number
of the Company's issued and outstanding Common Shares as of
August 8, 2022.
Frontera remains committed to enhancing shareholder returns. As
part of its 2023 plan, the Company strives to unlock shareholder
value from its upstream Colombia
and Ecuador business, its
standalone and growing midstream business and its potentially
transformational offshore exploration program in Guyana.
Continuing Progress On Frontera's ESG Strategy
- Building A Sustainable Future
Over the last three years, Frontera has established a strong
sustainability model at the centre of its business through its ESG
strategy - "Building a Sustainable Future".
In 2022, Frontera achieved 102% of its ESG goals for the year
compared with 98% in 2021. The Company offset 52% of our emissions
through carbon credits, restored and reforested 1,747 hectares of
key connectivity corridors in Casanare and Meta Departments,
Colombia, compared with 765
hectares in 2021, and recycled 15% of its operating water and 17%
of its solid waste. Frontera was awarded the Friendly Biz
certification for its sexual discrimination and harassment-free
environment, and received the Great Place-to-Work certification as
one of the best companies to work for in Colombia. The Company invested approximately
$4.3 million on education, inclusive
economic development and quality of life initiatives, benefiting
73,101 people through 218 social projects in Ecuador, Peru
and Colombia. In 2022, Frontera
was recognized for the second consecutive year as one of the
World's Most Ethical Companies by Ethisphere Institute.
Frontera employees achieved a best-ever Company total recordable
injury rate of 0.82 in 2022. Frontera's operations in Colombia received recertification of its
integrated management system under ISO 9001, ISO 14001, ISO 45001
and ISO 39001 standards. In Ecuador, the Company is the first operator in
the country to receive certification of its integrated management
system under ISO 9001, ISO 14001 and ISO 45001 standards.
Operational Update
Guyana
Frontera and CGX, joint venture partners (the "Joint
Venture") in the Petroleum Prospecting License for the
Corentyne block offshore Guyana
(the "License"), commenced drilling operations on the Wei-1
well on January 20, 2023 and is
currently at 15,400 feet (4,694 metres) measured depth. There have
been no lost time, safety or environmental incidents since starting
operations. Drilling operations have gone as planned and the first
prospective geologic horizons in the Upper Maastrichtian have been
successfully drilled, several days ahead of schedule. Geophysical
logs are currently being obtained in the open hole section within
which hydrocarbon shows were encountered. When drilling operations
resume, deeper prospective horizons in the Lower Maastrichtian,
Campanian and Santonian sections will be targeted.
The Wei-1 well is located approximately 14 kilometres northwest
of the Joint Venture's previous Kawa-1 light oil and condensate
discovery and is being drilled in water depth of approximately
1,912 feet (583 metres) to an anticipated total depth of 20,500
feet (6,248 metres). The Wei-1 well is targeting Maastrichtian,
Campanian and Santonian aged stacked sands within channel and fan
complexes in the northern section of the Corentyne block. The well
is expected to take approximately 4-5 months from well spud to
reach total depth.
Subsequent to the quarter, the Government of Guyana approved an Appraisal Plan for the
northern section of the Corentyne block which commenced with the
Wei-1 well. Following completion of Wei-1 drilling operations and
upon detailed analysis of the results, the Joint Venture may
consider future wells per its appraisal program to evaluate
possible development feasibility in the Kawa-1 discovery area and
throughout the northern section of the Corentyne block. Any future
drilling is contingent on positive results at Wei-1 and the Joint
Venture has no further drilling obligations beyond the Wei-1
well.
Demerara Block Relinquishment Complete
On February 27, 2023 the Joint
Venture completed the process of relinquishing the Demerara block
through a mutual termination agreement with the Government of
Guyana.
Colombia
During the quarter, Frontera produced 40,560 boe/d from its
Colombian operations (consisting of 22,144 bbl/d of heavy crude
oil, 15,827 bbl/d of light and medium crude oil, 9,097 mcf/d of
conventional natural gas and 993 boe/d of natural gas liquids).
Importantly, the Company further diversified its production mix in
2022, increasing its conventional natural gas production to 9,741
mcf/d, up 94% compared to 5,022 in 2021. The Company also grew its
natural gas liquids production to 958 boe/d in 2022, up 144% from
393 boe/d in 2021.
In the fourth quarter of 2022, the Company drilled 17
development wells at Quifa, Cajua, CPE-6 and Cubiro blocks and one
injector well at Quifa. This compares to 14 development wells in
the prior quarter. In 2022, the Company drilled 67 development
wells, compared to 42 in 2021.
Currently, the Company has five drilling rigs, and three
workover rigs active at its Quifa, CPE-6, Cubiro and
Corcel/Guatiquia and VIM-22 blocks in Colombia.
At Quifa, fourth quarter production averaged approximately
16,470 bbl/d of heavy crude oil (including both Quifa and Cajua).
The Company drilled 15 wells on the block in the fourth quarter of
2022, including 14 development wells and 1 injector well. The
Company brought the Battery 4 central processing facility on-line
in October 2022, increasing water
disposal capacity by 100,000 barrels of water per day (bwpd) and in
November, increased pumping capacity at the Centro de Manejo de
Agua water treatment facility by 50,000 bwpd. Combined, these two
operational achievements increased Frontera's water handling
capacity to approximately 1,550,000 bwpd. Initiation of Frontera's
reverse osmosis water treatment facility (SAARA previously
Agrocascada) in 2023 is expected to further increase water
disposal capacity and support production growth at Quifa. Frontera
expects to increase water disposal capacity to up to 2,000,000 bwpd
by mid-2024.
CPE-6
At CPE-6, fourth quarter production averaged approximately 5,214
bbl/d of heavy crude oil, increasing from 4,850 bbl/d at year end
2021. The Company drilled the Hamaca Norte-1 step out well in
November to a total depth of 3,800 feet (1,158 metres) to the north
of Frontera's existing production areas, penetrating 17.7 feet (5.4
metres) of net hydrocarbon pay in C7 - Basal Sands (Carbonara
Formation). The well was completed in December and an initial
seven-day production test produced an average of 50 bbls/d of 10.5
degree API heavy crude oil with a 53% water cut and confirmed the
continuation of the Hamaca field to the north. No pressure build-up
was performed.
The Company also drilled the Hamaca-117D (Hamaca Sur) well in
November to a total depth of 3,721 feet (1,134 metres), penetrating
50 feet (15.2 metres) net hydrocarbon pay in the U Basal Sands
Carbonera Formation. The drilling objective of the Hamaca Sur well
was to acquire information on the geology to the southwest of
Frontera's existing HAM-65 producer well cluster for efficient
future development of the area. During a two-week initial
production test, the well produced approximately 42 bbl/d with a
96% BSW. The well was completed as a horizontal well
(Hamaca-117D-STH). No pressure build-up was performed.
The Hamaca Norte and Sur wells are the first of several
delineation wells that are expected to define additional growth
opportunities adjacent to the Company's existing and expanding
CPE-6 facilities. The Company is currently defining its multi-year
development plan including increasing oil and water-handling
capacity to 480,000 bwpd in 2025.
Guatiquia
At Guatiquia, fourth quarter production averaged approximately
7,941 bbl/d of light and medium crude oil.
VIM-1
At VIM-1 block (Frontera 50% W.I., non operator), fourth quarter
production averaged approximately 1,370 bbl/d of light and medium
crude oil. In the fourth quarter of 2022, the La Belleza-2 well was
drilled approximately 2.5 kilometres east of the La Belleza-1 well
to a total depth of 14,166 feet and encountered 2,000 feet of
porous limestone in the Cienaga de Oro ("CDO") formation. The well was
drilled as a horizontal well and completed for natural flow
production. Over an 8-day initial production testing period, the
well produced a total of 15,610 barrels of condensate and 62 mcf of
conventional natural gas, representing an average test rate of
1,993 barrels of condensate per day and 8 mcfd of gas (3,326
boepd). Due to liquid storage limitations, the true capability of
the well could only be tested over a one-hour period where the well
produced 7,530 barrels of condensate and 38.5 mcfd of gas (13,953
boepd). Bottom hole pressure recorders indicated a producing
drawdown of 4% during the average flow period and a maximum
drawdown of 10% at the highest rate tested during the one-hour
period. A total of 817 barrels of formation water and water of
condensation was produced during the test for an average water-cut
of 5%, consistent with the long-term trends at the La Belleza-1
well. The well is now in production.
VIM-22
Subsequent to the quarter, the Company began civil works on the
VIM-22 block in advance of drilling the Chimi-1, Winner-1 and
Tubara Sur-1 wells in 2023. The Company spud the Chimi-1 well on
February 16, 2023.
VIM-46
Subsequent to the quarter, the Company began pre-seismic and
pre-drilling activities.
La Creciente
At the La Creciente block, the Magari-1D exploratory well was
spudded in the fourth quarter of 2022 and reached total depth in
early January 2023. Gassy water was
found in the CDO formation but the well was unsuccessful in
producing commercial quantities of hydrocarbons. The well was
subsequently plugged and abandoned.
Ecuador
In Ecuador, fourth quarter
gross production averaged approximately 2,492 bbl/d of light &
medium crude oil. Frontera's share of production in Ecuador for the three months ended
December 31, 2022, was 1,246 bbl/d of
medium crude oil compared to 1,204 bbl/d in the prior quarter. At
the Perico block (Frontera 50% W.I. and operator), current
production is 1,178 bbl/d.
At the Espejo block (Frontera 50% W.I. and non-operator), the
Pashuri-1 well was drilled to a total depth of 10,907 feet (3,324
metres) in October 2022. Preliminary
logging information indicated the presence of hydrocarbons in the
M1 and U Sandstones in the Napo formation. The well has been in an
extended production test since December 2,
2022, with a current rate of approximately 350 bbl/d of 19.8
degree API with 12% water cut in the U Sandstone from the Napo
formation with no significant pressure decline.
During the fourth quarter of 2022, Frontera recorded a
$4.5 million partial impairment of
the Pashuri-1 well due to initial lower than expected recoverable
resources from the well. The Company is currently analyzing its
long-term options for this well.
The operator drilled the Caracara-1 exploration well in
November 2022, reaching a total depth
of 10,090 feet (3,075 metres). Preliminary logging information
indicated the presence of hydrocarbons in the M1 and U Sandstones.
Initial production tests after six days of testing showed traces of
heavy and viscous oil in M1 Sandstone from Napo formation with no
significant pressure declines. Further analyses are being carried
out to define next steps.
Hedging Update
As part of its risk management strategy, Frontera uses
derivative commodity instruments to manage exposure to price
volatility by hedging a portion of its oil production. Consistent
with this strategy, the Company entered into new put hedges
totaling 2,160,000 bbls to protect a portion of the Company's
production through May 2023. The
following table summarizes Frontera's 2023 hedging position as of
March 1, 2023.
Term
|
Type
of
Instrument
|
Open
Positions
(bbl/d)
|
Strike
Prices
Put/
Call
|
January
|
Put
|
14,839
|
80
|
February
|
Put
|
14,286
|
70
|
March
|
Put
|
14,194
|
70
|
1Q-2023
|
Total
Average
|
14,444
|
|
April
|
Put
|
14,333
|
70
|
May
|
Put
|
13,871
|
70
|
2Q-2023
|
Total
Average
|
9,451
|
|
Fourth Quarter 2022 Conference
Call Details
A conference call for investors and analysts will be held on
Thursday, March 2, 2023, at
1 p.m. Eastern Time. Participants
will include Gabriel de Alba,
Chairman of the Board of Directors, Orlando
Cabrales, Chief Executive Officer, René Burgos, Chief
Financial Officer and other members of the senior management
team.
Analysts and investors are invited to participate using the
following dial-in numbers:
Participant Number
(Toll Free North America):
|
1-888-664-6383
|
|
|
Participant Number
(Toll Free Colombia):
|
01-800-518-4036
|
|
|
Participant Number
(International):
|
1-416-764-8650
|
|
|
Conference
ID:
|
34443426
|
|
|
Webcast
Audio:
|
www.fronteraenergy.ca
|
|
|
A replay of the conference call will be available until
11:59 p.m. Eastern Time on
March 9, 2023.
Encore Toll free
Dial-in Number:
|
1-888-390-0541
|
|
|
International Dial-in
Number:
|
1-416-764-8677
|
|
|
Encore ID:
|
443426
|
About Frontera:
Frontera Energy Corporation is a Canadian public company
involved in the exploration, development, production,
transportation, storage and sale of oil and natural gas in
South America, including related
investments in both upstream and midstream facilities. The Company
has a diversified portfolio of assets with interests in 31
exploration and production blocks in Colombia, Ecuador and Guyana, and pipeline and port facilities in
Colombia. Frontera is committed to
conducting business safely and in a socially, environmentally, and
ethically responsible manner.
If you would like to receive news releases via email as soon as
they are published, please subscribe here:
http://fronteraenergy.mediaroom.com/subscribe.
Advisories:
Cautionary Note Concerning
Forward-Looking Statements
This news release contains forward-looking information within
the meaning of Canadian securities laws. Forward-looking
information relates to activities, events or developments that the
Company believes, expects or anticipates will or may occur in the
future. Forward-looking information in this news release includes,
without limitation, statements regarding the Company's continued
commitment to enhancing shareholder return and its efforts to
unlock shareholder value as part of its 2023 plan; statements
relating to the Company's guidance and objectives for 2023;
statements regarding the Company's path to a 50,000 boe/d future;
expectations regarding the initiation and expected impacts of the
Company's reverse osmosis water treatment facility (SAARA
previously Agrocascada) in 2023 and increased water handling
capacity at Quifa in 2023 and 2024; expectations regarding
increased oil and water handling capacity at CPE-6 in 2023 and
2025; anticipated exploration, development and drilling activities
and seismic acquisition, including expectations regarding drilling
of the Wei-1 well on the Corentyne block, including project
evolution, drilling objectives, timelines and target zones,
statements regarding the impact of the Wei-1 exploration well
results on the development plans for the Corentyne block,
statements relating to anticipated well results and additional
analysis being conducted on well data, and expectations with
respect to additional growth opportunities adjacent to the
Company's existing and expanding CPE-6 facilities; statements
regarding the Company's multi-year development plan; expectations
with respect to the Company's hedging strategy; and activities and
expectations regarding the Company's ESG strategy. All information
other than historical fact is forward-looking information.
Forward-looking information reflects the current
expectations, assumptions and beliefs of the Company based on
information currently available to it and considers the Company's
experience and its perception of historical trends, including
expectations and assumptions relating to commodity prices and
interest and foreign exchange rates; the current and expected
impacts of the COVID-19 pandemic, actions of the Organization of
Petroleum Exporting Countries ("OPEC+") and the impact of the
Russia-Ukraine conflict, and the expected impact of
measures that the Company has taken and continues to take in
response to these events; expectations regarding the Company's
ability to manage its liquidity and capital structure and generate
sufficient cash to support operations, capital expenditures and
financial commitments; the performance of assets and equipment; the
Company's ability to achieve the increased oil and water handling
capacity at CPE-6 and Quifa in the time frames indicated; the
availability and cost of labour, services and infrastructure; the
execution of exploration and development projects; the receipt of
any required regulatory approvals and outcome of discussions with
governmental authorities; the success of the Company's hedging
strategy; and the impact and success of the Company's ESG
strategies.
Although the Company believes that the assumptions inherent
in the forward-looking information are reasonable, forward-looking
information is not a guarantee of future performance and
accordingly undue reliance should not be placed on such
information. Forward-looking information is subject to a number of
risks and uncertainties, some that are similar to other oil and gas
companies and some that are unique to the Company. The actual
results may differ materially from those expressed or implied by
the forward-looking information, and even if such actual results
are realized or substantially realized, there can be no assurance
that they will have the expected consequences to, or effects on,
the Company. The Company's annual information form dated
March 1, 2023, its annual
management's discussion and analysis for the year ended
December 31, 2022, and other
documents it files from time to time with securities regulatory
authorities describe the risks, uncertainties, material assumptions
and other factors that could influence actual results and such
factors are incorporated herein by reference. Copies of these
documents are available without charge by referring to the
company's profile on SEDAR at www.sedar.com. All forward-looking
information speaks only as of the date on which it is made and,
except as may be required by applicable securities laws, the
Company disclaims any intent or obligation to update any
forward-looking information, whether as a result of new
information, future events or results or otherwise.
Non-IFRS Financial and Other
Measures
This news release contains various "non-IFRS financial
measures" (equivalent to "non-GAAP financial measures", as such
term is defined in NI 52-112), "non-IFRS ratios" (equivalent to
"non-GAAP ratios", as such term is defined in NI 52-112),
"supplementary financial measures" (as such term is defined in NI
52-112) and "capital management measures" (as such term is defined
in NI 52-112), which are described in further detail below. Such
financial measures do not have standardized IFRS definitions.
The Company's determination of these financial measures may differ
from other reporting issuers and they are therefore unlikely to be
comparable to similar measures presented by other companies.
Furthermore, these financial measures should not be considered in
isolation or as a substitute for measures of performance or cash
flows as prepared in accordance with IFRS. These financial measures
do not replace or supersede any standardized measure under IFRS.
Other companies in our industry may calculate these financial
measures differently than we do, limiting their usefulness as
comparative measures. The Company discloses these financial
measures, together with measures prepared in accordance with IFRS,
because management believes they provide useful information to
investors and shareholders, as management uses them to evaluate the
operating performance of the Company. These financial measures
highlight trends in the Company's core business that may not
otherwise be apparent when relying solely on IFRS financial
measures. Further, management also uses non-IFRS measures to
exclude the impact of certain expenses and income that management
does not believe reflect the Company's underlying operating
performance. The Company's management also uses non-IFRS measures
in order to facilitate operating performance comparisons from
period to period and to prepare annual operating budgets and as a
measure of the Company's ability to finance its ongoing operations
and obligations.
Set forth below is a description of the non-IFRS financial
measures, non-IFRS ratios, supplementary financial measures and
capital management measures used in this news release.
Operating EBITDA
EBITDA is a commonly used measure that adjusts net income
(loss) as reported under IFRS to exclude the effects of income
taxes, finance income and expenses, and depletion, depreciation and
amortization expense.
Operating EBITDA is a non-IFRS financial measure that
represents the operating results of the Company's primary business,
excluding the following items: restructuring, severance and other
costs, post-termination obligation and payments of minimum work
commitments and certain non-cash items (such as impairments,
foreign exchange, unrealized risk management contracts and
share-based compensation) and gains or losses arising from the
disposal of capital assets. In addition, other unusual or
non-recurring items are excluded from operating EBITDA, as they are
not indicative of the underlying core operating performance of the
Company. Since the three and six months ended June 30, 2022, the Company changed the
composition of its Operating EBITDA calculation to exclude certain
unusual or non-recurring items as post-termination obligations and
payments of minimum work commitments, which could distort future
projections as they are not considered part of the Company's normal
course of operations.
A reconciliation of net income to operating EBITDA is as
follows:
|
Three Months
Ended
December
31
|
Year
Ended
December
31
|
($M)
|
2022
|
2021
|
2022
|
2021
|
|
|
|
|
|
Net income
|
197,796
|
629,376
|
286,615
|
628,133
|
Finance
Income
|
(2,323)
|
(30)
|
(5,505)
|
(5,362)
|
Finance
expenses
|
14,239
|
11,768
|
52,991
|
51,822
|
Income tax expense
(recovery)
|
68,599
|
(36,118)
|
249,275
|
1,039
|
Depletion,
depreciation, and amortization
|
49,198
|
20,121
|
195,419
|
126,692
|
Impairment (reversal)
expense and others
|
(207,895)
|
(562,520)
|
(206,736)
|
(565,523)
|
Cost under terminated
pipeline contracts
|
-
|
(4,386)
|
-
|
(4,386)
|
Post-termination
obligation
|
5,229
|
322
|
12,299
|
4,980
|
Shared-based
compensation non cash portion
|
3,213
|
2,973
|
7,777
|
6,695
|
Restructuring,
severance, and other costs
|
2,624
|
1,746
|
4,463
|
4,616
|
Share of income from
associates
|
(12,135)
|
(9,751)
|
(42,043)
|
(38,033)
|
Foreign exchange
loss
|
28,230
|
11,128
|
76,413
|
35,510
|
Other loss
(income)
|
5,381
|
(14,788)
|
10,800
|
(1,435)
|
Unrealized gain on risk
management contracts
|
(6,600)
|
(4,530)
|
(4,310)
|
(7,213)
|
Non-controlling
interests
|
(562)
|
(265)
|
4,420
|
7,933
|
Loss on extinguishment
of debt
|
-
|
-
|
-
|
29,112
|
Reclassification of
currency translation adjustments
|
-
|
103,599
|
-
|
103,599
|
Operating
EBITDA
|
144,994
|
148,645
|
641,877
|
378,179
|
Capital
Expenditures
Capital expenditures is a non-IFRS financial measure that
reflects the cash and non cash items used by a company to invest in
capital assets. This financial measure considers oil and gas
properties, plant and equipment, infrastructure, exploration, and
evaluation assets.
Operating Netback and Oil and
Gas Sales, Net of Purchases
Operating netback is a non-IFRS financial measure and
operating netback per boe is a non-IFRS ratio. Operating netback is
used to assess the net margin of the Company's production after
subtracting all costs associated with bringing one barrel of oil to
the market. It is also commonly used by the oil and gas industry to
analyze financial and operating performance expressed as profit per
barrel and is an indicator of how efficient the Company is at
extracting and selling its product. For netback purposes, the
Company removes the effects of any trading activities and results
from its midstream segment from the per barrel metrics. Refer to
the reconciliation in the "Operating Netback" section on page 12 of
the MD&A. Refer to the "Operating Netback and Oil and Gas
Sales, Net of Purchases" section on pages 26 and 27 of the MD&A
for a description of each component of the Company's operating
netback and how it is calculated. Oil and gas sales, net of
purchases, is a non-IFRS ratio that is calculated using oil and gas
sales less the cost of volumes purchased from third parties
including its transportation and refining cost, divided by the
total sales volumes from D&P assets, net of purchases. Refer to
the reconciliation in the "Operating Netback and Oil and Gas Sales,
Net of Purchases'' section on pages 26 and 27 of the
MD&A.
Net Sales
Net sales is a non-IFRS financial measure that adjusts
revenue to include realized gains and losses from risk management
contracts while removing the cost of dilution activities. This is a
useful indicator for management as the Company hedges a portion of
its oil production using derivative instruments to manage exposure
to oil price volatility. This metric allows the Company to report
its realized net sales after factoring in these risk management
activities. The deduction for dilution costs and cost of purchases
is helpful to understand the Company's sales performance based on
the net realized proceeds from production net of dilution, the cost
of which is partially recovered when the blended product is sold.
Net sales also exclude sales from port services, as it is not
considered part of the oil & gas segment. Refer to the
reconciliation in the "Sales" section on page 27 of the
MD&A.
Net Sales Realized
Price
Net sales realized price is a non-IFRS ratio that is
calculated using net sales (including oil and gas sales net of
purchases, realized gains and losses from risk management contracts
less royalties and dilution costs). Net sales realized price per
boe is a non-IFRS ratio which is calculated dividing each component
by total sales volumes, net of purchases. Refer to the "Net sales
realized price" section on page 27 of the MD&A for a
reconciliation of this calculation.
Production Cost Per Boe,
Transportation Cost Per Boe, Royalties Per Boe and Dilution Costs
Per Boe
Production costs mainly include lifting costs, activities
developed in the blocks, and processes to put the crude oil and gas
in sales condition. Production cost per boe is a supplementary
financial measure that is calculated using production cost divided
by production (before royalties). Refer to the "Production cost per
boe" section on page 28 of the MD&A for a reconciliation of
this calculation. Transportation costs include all commercial and
logistics costs associated with the sale of produced crude oil and
gas such as trucking, pipeline and refining processing fees.
Transportation cost per boe is a supplementary financial measure
that is calculated using transportation cost divided by net
production after royalties. Refer to the "Transportation cost per
boe" section on page 28 of the MD&A for a reconciliation of
this calculation. Royalties include royalties and amounts paid to
previous owners of certain blocks in Colombia and cash payments for PAP. Royalties
per boe is a supplementary financial measure that is calculated
using the royalties divided by total sales volumes, net of
purchases. Dilution costs include all costs associated with the
dilution services. Dilution costs per boe is a supplementary
financial measure that is calculated using the dilution costs
divided by total sales volumes, net of purchases.
Realized (loss) gain on risk
management contracts per boe
Realized (loss) gain on risk management contracts includes
the gain or loss during the period, as a result of the Company's
exposure in derivative contracts. Realized (loss) gain on risk
management contracts per boe is a supplementary financial measure
that is calculated using Realized (loss) gain on risk management
contracts divided by total sales volumes, net of purchases.
Working Capital
Working capital is a capital management measure to describe
the liquidity position and ability to meet its short-term
liabilities. Working Capital is defined as current assets less
current liabilities.
Restricted cash short and
long-term
Restricted cash (short and long term) is a capital management
measure, that sum the short-term portion and long term portion of
the cash that the Company has in term deposits that have been
escrowed to cover future commitments and future abandonment
obligations or insurance collateral for certain contingencies and
other matters that are not available for immediate
disbursement.
Total cash
Total cash is a capital management measure to describe the
total cash and cash equivalents restricted and unrestricted
available and consists of the cash and cash equivalents and the
restricted cash short and long-term.
Total debt and lease
liabilities
Total debt and lease liabilities are capital management
measures to describe the total financial liabilities of the
Company, and comprises the debt of unsecured notes, loans and
liabilities from leases of various properties, power generation
supply, vehicles and other assets.
Oil and Gas Information
Advisories
Reported production levels may not be reflective of
sustainable production rates and future production rates may differ
materially from the production rates reflected in this news release
due to, among other factors, difficulties or interruptions
encountered during the production of hydrocarbons. Disclosure of
well-flow test results included in this press release are not
necessarily indicative of long-term performance or of ultimate
recovery. Where a pressure transient analysis or well-test
interpretation has not yet been carried out, as indicated above,
the data should be considered preliminary until such analysis or
interpretation has been done.
This news release includes the terms "net hydrocarbon pay"
and "hydrocarbon shows". Such terms should not be interpreted to
mean there is any level of certainty in regard to any volume of
oil, natural gas or condensates that may be present therein, or
that any such volumes may be produced profitably, in commercial
quantities, or at all.
The term "boe" is used in this news release. Boe may be
misleading, particularly if used in isolation. A boe conversion
ratio of cubic feet to barrels is based on an energy equivalency
conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead. In this news
release, boe has been expressed using the Colombian conversion
standard of 5.7 Mcf: 1 bbl required by the Colombian Ministry of
Mines and Energy.
Definitions:
bbl(s)
|
Barrel(s) of
oil
|
bbl/d
|
Barrels of oil per
day
|
boe
|
Refer to "Boe
Conversion" disclosure above
|
boe/d
|
Barrel of oil
equivalent per day
|
Mcf
|
Thousand cubic
feet
|
W.I.
|
Working
Interest
|
Net
Production
|
Net production
represents the Company's working interest volumes, net of royalties
and internal consumption
|
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content:https://www.prnewswire.com/news-releases/frontera-announces-fourth-quarter-and-year-end-2022-results-301760373.html
SOURCE Frontera Energy Corporation