Frontera Energy Corporation · TSX:FEC
Frontera Energy — Investor Presentation (June 2021)
34 slides from Frontera Energy's investor presentation, June 2021
Slide 1: Frontera Energy Corporate Presentation June 2021
Frontera Energy Corporate Presentation June 2021
Slide 2: Advisories
ADVISORIES This presentation contains forward-looking statements or “forward-looking information (collectively, “forward-looking statements”) within the meaning of applicable securities legislation, which involve known and unknown risks, uncertainties, and other factors that may because the actual r
Slide 3: Advisories
ADVISORIES This presentation contains future oriented financial information and financial outlook information (collectively, “FOFI”) within the meaning of applicable securities laws, (including, without limitation, statements regarding expected average production, production costs, transportation cost
Slide 4: Company Overview
COMPANY OVERVIEW
Slide 5: Company Overview
COMPANY OVERVIEW ● Frontera Energy Corporation is a Canadian public company listed on the Toronto Stock Exchange (TSX: FEC). ● The Company is involved in the exploration, development, production, transportation, storage and sale of oil and natural gas in South America, including related investments
Slide 6: Company Snapshot
COMPANY SNAPSHOT Capital Structure (As at Mar 31, 2021) ($U.S.) Credit ratings Long-term debt ($MM) $337 Outlook (9): Stable 14 (+) Total Lease Liabilities ($MM) $14 24 S&P Issuer Rating: B+ (+)Risk Management Liabilities, net ($MM) $10 = Consolidated Total Indebtedness excl. 2025 Puerto Bahia debt
Slide 7: Why Invest in Frontera
WHY INVEST IN FRONTERA Proven and diverse asset base with longevity that generates value-focused production and cash flow from across the portfolio Key Advantages and Value Creation Opportunities > $300MM $130MM Lowering field ✔ Advantaged transportation/ logistics structure which provides EBITDA Deve
Slide 8: 2020 Year End Reserves Results
2020 YEAR END RESERVES RESULTS Achieved a Finding & Achieved a net 2P Reserve Increased 2P Reserve Life Development ("F&D") cost of Replacement Ratio of 154% Index to 10.3 years $3.38/boe Evolution of net 2P reserves (MMboe) 2P Reserve Life Index Evolution (years) NPV 10 NPV10 Reserves (Dec 31, 2020
Slide 9: Robust Reserve Base and Healthy RLI
ROBUST RESERVE BASE AND HEALTHY RLI Source: Public filings. Reserves data as of December 31,2020. 9
Slide 10: Focus on Cost Reductions, Margin Improvement, and Efficiencies
FOCUS ON COST REDUCTIONS, MARGIN IMPROVEMENT, AND EFFICIENCIES Production by Source (kboe/d) Realized Price and Operating Netback (US$/bbl) Reduction due to voluntary discontinuation of E&P operations in Peru and voluntary reduction in Colombia given outbreak of pandemic Operating Cost (US$/bbl) Cap
Slide 11: Focus on Cost Reductions, Margin Improvement, and Efficiencies
FOCUS ON COST REDUCTIONS, MARGIN IMPROVEMENT, AND EFFICIENCIES Sales Volume (kboe/d) and Prices ($/boe) Evolution Field Breakeven ($/boe) Corporate Breakeven ($/boe) Full Cycle Breakeven ($/boe) (1) Calculated as difference vs. Brent (2) Divided over NAR production (3) Divided over SBR production 11
Slide 12: Ample Financial Flexibility, Conservative Capital Structure
AMPLE FINANCIAL FLEXIBILITY, CONSERVATIVE CAPITAL STRUCTURE Total Sales US$ mm) Adjusted EBITDA (US$ mm) Total Debt (1) (US$ mm) Cash Balance (US$ mm) (1) Includes $14.6m of lease liabilities and excludes $183.1m of Puerto Bahia short-term debt. 12
Slide 13: 2021 Focus
2021 FOCUS Delivering value-focused production and cash flow 1 from the Company's Colombian operations. 2 Achieving continuous operational improvements and greater cost efficiencies across the business 3 Advancing the Company’s exciting exploration portfolio in Colombia, Ecuador and Guyana 4 Executing
Slide 14: 2021 Capital Program and Guidance
2021 CAPITAL PROGRAM AND GUIDANCE(5) Focused on four key areas: 1. Colombia Development – development capital focused on the Company's strong Colombian base. 2. Colombia & Ecuador Exploration – drilling two exploration wells in the VIM-1 block in 2021; and to complete seismic and preparatory work in
Slide 15: Focus on Risk Management
FOCUS ON RISK MANAGEMENT Current Hedges Portfolio (March 2021) Oil Hedges Ceiling and Floors (US$/boe) Puts 7.46 mmbl Put 3-ways Spreads Instrument Term Strike Benchmark MtM 3/31/21 Type 3-ways Apr-Dec 21 27.8/37.8/54 Brent $ (16,918,467) Put Spread Apr-Dec 21 27.3/47.3 Brent $ 3,262,031 Put Jul-Sep
Slide 16: Hedging Program 2021
HEDGING PROGRAM 2021 Frontera has hedged ~50% of its production for the remainder of 2021. Three Ways Put Spread Put Total Volume Hedged 617 641 612 730 728 695 478 478 478 16
Slide 17: Our Portfolio
OUR PORTFOLIO (1) Large diversified asset base STRONG COLOMBIAN BASE EXCITING EXPLORATION UPSIDE • Quifa • Lower Magdalena Valley • Guatiquia • Offshore Guyana • Cubiro • Ecuador • CPE-6 17 1. Remediation and abandonment work is underway in Peru
Slide 18: Core Assets
CORE ASSETS
Slide 19: Quifa
QUIFA 2021 Operational Plan In 2021, the Company plans to drill 19 wells in Quifa. At this activity level, development costs at Quifa, its largest field, have been lowered to $8/boe in 2021, down 60% from $20/boe in 2019. Contract Name Quifa Contract Contract Type Association Contract Contract Term E
Slide 20: CPE-6
CPE-6 2021 Operational Plan The Company plans to drill 15 wells in CPE-6 in 2021. Frontera expects steady production volumes in the heavy oil business unit, backstopped by production from CPE-6 that is expected to increase by approximately 40% this year due to further drilling and construction of ad
Slide 21: Guatiquia
GUATIQUIA 2021 Operational Plan The Company plans to drill two wells in the Coralillo field in 2021 as part of the continued development of the Guatiquia block. Contract Name Guatiquia Contract Contract Type Exploration & Production Contract Term Expiry August 2035 2020 Production (SBR) 10,850 bbl/d
Slide 22: Exciting Exploration Upside
EXCITING EXPLORATION UPSIDE
Slide 23: Guyana
GUYANA Exciting exploration opportunities ● Frontera, through its joint venture with CGX, plans to spud the Kawa-1 exploration well early in the third quarter of 2021 targeting, to an approximate depth of 6,500 metres and targeting the Campanian-Santonian Zones. ● In the Demerara block, the Company
Slide 24: Lower Magdalena Valley
LOWER MAGDALENA VALLEY Oil, natural gas and liquids opportunities • Successful La Belleza-1 exploration well tested over 4,600 boe/d with limited drawdown. Regulatory approval to extend the current VIM-1 block boundaries by ~32,000 acres was recently received. • On the VIM-1 Block, the joint venture
Slide 25: Ecuador
ECUADOR Perico and Espejo blocks (Frontera 50% / Geopark 50%) • Proven hydrocarbon basin near existing production and infrastructure. • Prospective, low-risk exploration blocks located in Sucumbíos Province in the north-eastern part of Ecuador, in the Oriente basin, and have a total area of approxim
Slide 26: Infrastructure
INFRASTRUCTURE
Slide 27: Oleoducto de los Llanos Orientales
OLEODUCTO DE LOS LLANOS ORIENTALES Frontera holds a 21% Indirect Equity Interest ● Transports the Company’s heavy crude oil from the Quifa SW and Cajua fields to Coveñas export terminal via OCENSA ● 260 km of 24” pipeline with throughput capacity of 300,000 Bbl/d ● Connected to Llanos 34 (GeoPark/Par
Slide 28: Puerto Bahia
PUERTO BAHIA Unique asset, combining a liquids terminal with a dry cargo facility, in a strategic location Liquid Bulk Terminal Operational capacity of 2.6 MMbbl, distributed amongst eight storage tanks with blending functionalities. 8 loading and unloading stations and a liquid jetty with 2 docking
Slide 29: Transportation
TRANSPORTATION Pipeline Interest & Notes on Pipeline Km Capacity FEC Transportation Rights (bbl/d) BIC Origin: Araguaney 226 120,000 43.03% equity interest in Bicentenario Destination: Banadia 1.2% working interest pursuant to a construction and operation contract. OAM The Company has transportation
Slide 30: ESG
ESG
Slide 31: Top Tier Board and Management Team
TOP TIER BOARD AND MANAGEMENT TEAM Leadership with Global Experience and Deep Regional Knowledge Experienced Management team … And Board of Directors • Leader in the Colombian energy Gabriel de Alba • Managing Director and Partner of Orlando Cabrales Segovia sector and CEO of Frontera Energy Chairma
Slide 32: Committed to ESG
COMMITTED TO ESG Committed to conducting business safely and in a socially, environmentally, and ethically responsible manner 2021 ESG Focus Areas - Emissions: Neutralize 40% of emissions through carbon credits of voluntary conservation projects to reduce carbon footprint ENVIRONMENTAL - Water: redu
Slide 33: Frontera Energy
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Slide 34: First Quarter 2021 Operational & Financial Results
FIRST QUARTER 2021 OPERATIONAL & FINANCIAL RESULTS Q1 2021 Q4 2020 % Chg. Heavy Crude Oil Production (Boe/d) 20,997 21,074 0% Light and Medium Crude Oil Production (Boe/d) 18,685 19,756 (5%) Conventional Natural Gas Production (Mcf/d) 5,227 6,356 (18%) Total Production before royalties (Boe/d) 40,59