Frontera Energy Corporation · TSX:FEC
Frontera Energy — Investor Presentation (December 2018)
30 slides from Frontera Energy's investor presentation, December 2018
Slide 1: Enhancing the Portfolio
Enhancing the Portfolio December 2018
Slide 2: Advisories
Advisories This presentation contains forward-looking statements. All statements, other than statements of historical fact that address activities, events or developments that Frontera Energy Corporation (the “Company” or “Frontera”) believes, expects or anticipates will or may occur in the future (
Slide 3: Company Overview
Company Overview
Slide 4: North Andean Focus
North Andean Focus Largest Independent O&G Company in Latin America 4
Slide 5: Frontera Energy Corporate Snapshot
Frontera Energy Corporate Snapshot Capital Structure ($U.S.) Q3 2018 Production Mix Shares Outstanding (TSX: FEC; MM)(1) 100 Natural Gas Market Cap ($MM)(2) $1,053 Heavy Oil 7% Total Cash(3) /Cash and Cash Equivalents ($MM) $786 / $587 Long-Term Debt ($MM)(4) $350 58.6 40% Mboe/d Enterprise Value ($
Slide 6: 2019 Guidance
2019 Guidance Strong EBITDA, Lower Capex, Stable Costs 2019 Guidance Metrics(1) 2018 2019 Guidance 2019 Using 2018 Prices Operating EBITDA(2) $400 - $450 MM $400 - $450 MM $600 - $650 MM Capital Expenditures $440 - $460 MM $325 - $375 MM - Average Daily Production 70 – 72 Mboe/d 65 – 70 Mboe/d - (be
Slide 7: 2019 Guidance
2019 Guidance Strong EBITDA, Lower Capex, Stable Costs Daily Production, after royalties (boe/d) Operating EBITDA and Capex ($MM) 70,000 450 400 60,000 350 50,000 300 40,000 250 200 30,000 150 20,000 100 50 10,000 - - 2017 2018F 2019E Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 2019E Operating E
Slide 8: Company Strategy
Company Strategy Stable Production for Three to Five Years for our Core Assets, Optimizing Free Cash Flow Generation for Growth and Value Creation Initiatives Core Portfolio of Stable Assets with Growth Options Maintain Strong Balance Sheet, Financial Flexibility and Low Leverage Ratios to Enhance S
Slide 9: Three Year Plan
Three Year Plan Colombia Production Offsets the Potential Loss of Block 192 in Peru 70,000 60,000 50,000 40,000 30,000 20,000 10,000 - 2019 2020 2021 Heavy Oil Guatiquia Cubiro Others Exploration/New Projects Peru Growth Initiatives 9
Slide 10: Our Portfolio
Our Portfolio Core, Sustaining, and Growth CORE • Quifa • Guatiquía • Cubiro SUSTAINING • CPE-6 • Z-1 • Near field exploration GROWTH • Offshore Guyana • Ecuador bid rounds • New Contract Opportunity Block 192 • Farm-in opportunities 10
Slide 11: Balance Sheet Strength
Balance Sheet Strength Strong Cash Position, Low Leverage Ratios Balance Sheet Metrics – September 30, 2018 Total Cash(1)/Cash and Cash Equivalents ($MM) $786/$587 Net Debt/EBITDA(2) 0.0x Debt to Book Capitalization(3) 22.7% Interest Coverage(4) 12.0x 2019 Hedged Production ~7.5% Dividend (January 3
Slide 12: Sustainability & Shared Value Model
Corporate Responsibility and Partner of Choice Committed to Sustainable Operations Sustainability & Shared Value Model 2018 and 2017 United Nations Global Compact awards recipient For the fourth year in a row, we were selected as one of Canada’s top 50 Corporate Citizens by Corporate Knights Nominat
Slide 13: Core Assets
Core Assets
Slide 14: Quifa: Cornerstone of Heavy Oil Production
Quifa: Cornerstone of Heavy Oil Production Stable Production of 30-32 MBOPD WI • ~300 wells on production • Water treatment and disposal spare capacity • Facilities capacity in excess of 1.7 MMBWPD • More than 50% of undeveloped reserves • ~ 600 wells to be drilled in the next years • Additional exp
Slide 15: Guatiquía: Building on Deep Llanos Success
Guatiquía: Building on Deep Llanos Success Development & Exploration Opportunities • High productivity reservoirs • Successful development underway • Successful Appraisal drilling Ardill--4 • Additional exploration potential in the area • Reserves Balance as of December 31, 2017 • 1P: 13.6 MMbbl • 2
Slide 16: Cubiro: Secondary Recovery in the Central Llanos
Cubiro: Secondary Recovery in the Central Llanos Waterflood to Increase Recovery Efficiency and 3X Production Potential • Growing production during next years • Successful Waterflooding pilot performed • Full field development plan starting in 2019 • 11 to 12 MBOPD of production potential • Addition
Slide 17: Sustaining & Growth Assets
Sustaining & Growth Assets
Slide 18: Guyana
Guyana Exciting Exploration Opportunities • Over 1.8 million gross acres in the hottest offshore exploration basin in the world • Two well commitment plus a two well option • Multiple play types with vertical and lateral migration derisked by ten discoveries on adjacent block • First well, Utakwaaka
Slide 19: CPE-6
CPE-6 Hamaca Field New Development & Exploration Potential • Growing production during next years • 1,000 Bopd current production • 5 to 8 MBOPD of production potential • ~ 190 wells to be drilled in the next years • Additional Exploration potential • Reserves Balance as of December 31, 2017 • 1P: 1
Slide 20: Peru
Peru Potential for New Contract & Shallow Offshore Exploration • Notified by Petroperú on November 30, 2018 of a force majeure event resulting in the shut down of production from Block 192 • Current service contract expected to expire in September 2019 • Recent change of government - new policies on
Slide 21: Realizing Value from Non-Core Assets
Realizing Value from Non-Core Assets Midstream and Infrastructure Assets Hold Significant Value 1) ODL Pipeline 2) Puerto Bahía 35.0% Indirect Interest(3) 39.2% Indirect Interest(1) • Ships the Company’s heavy crude oil from Quifa SW and Cajua fields to Coveñas export terminal via • Greenfield liqui
Slide 22: Investment Opportunity
Investment Opportunity Enhancing the Portfolio Strong balance sheet with targeted Attractive, low- 93% oil weighted quarterly Over 90% near- risk “brownfield” with Brent price dividend of field exploration development exposure $12.5 million success in 2018 opportunities with $25 million initial divi
Slide 23: Appendix
Appendix
Slide 24: Third Quarter 2018 Operational & Financial Highlights
Third Quarter 2018 Operational & Financial Highlights Strong Net Income and Cash Provided by Operating Activities Q3 2018 Q2 2018 % Chg. Price / Revenue / Production Brent oil prices increased 1% quarter-over-quarter which Net Production (Boe/d)(1) 58,558 64,140 (9%) helped realized price increase 2
Slide 25: Transportation Costs
Transportation Costs P-135 Arbitration Settlement, Termination of Ship or Pay Contracts Quarterly Transportation Cost ($/boe) $14.28 $13.77 $11.77 $12.68 Transport $11.81 Cost ($/Boe) Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Fees Paid on Suspended $5.33 $4.16 $6.02 $7.00 $3.94 Pipeline Capacity ($/Boe) Termina
Slide 26: Frontera's Improving Average Daily Volume
Frontera’s Improving Average Daily Volume Improved Liquidity with Share Split and Share Buyback Program 2018 Share Price and 30 Day Average Volume 25 300,000 Share Split NCIB July 18, 2018 June 26, 2018 250,000 20 200,000 15 150,000 10 100,000 5 50,000 0 - 2018-01-02 2018-02-02 2018-03-02 2018-04-02
Slide 27: 2017 Reserves Evaluation Results
2017 Reserves Evaluation Results Replaced 2017 Production and Increased 2P NPV10 Value 2P Net Reserves - MMBOE NPV by Category @ 10% (MMUSD) 200 27 -26 3,000 -18 2,523 150 2,500 2,324 1,932 587 2,000 1,918 751 100 494 402 1,500 714 171 154 458 620 567 1,000 50 1,072 1,222 500 857 953 0 0 2P Reserves
Slide 28: Proven Management Team
Proven Management Team Proven Leadership with Global Experience • Over 36 years of experience with major international oil & gas companies, including BP, Talisman Energy, and Richard Herbert Phillips Petroleum CEO • Responsible for major exploration and development initiatives in 26 years at BP, inc
Slide 29: Independent Board of Directors
Independent Board of Directors Engaged and Active in Unlocking Shareholder Value Gabriel de Alba • Managing Director and Partner of The Catalyst Capital Group Inc. Chairman • International experience restructuring public and private companies, unlocking value for investors • Over 35 years of interna
Slide 30: Investor Relations Contact
INVESTOR RELATIONS CONTACT: Grayson M. Andersen Corporate Vice President, Capital Markets Calle 110, No 9 – 25, Piso 16 Bogota, DC, Colombia +57 (314) 250-1467 gandersen@fronteraenergy.ca ir@fronteraenergy.ca
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