Frontera Energy Corporation · TSX:FEC
Frontera Energy — Q3 2020 Earnings Presentation
29 slides from Frontera Energy's earnings presentation, November 2020
Slide 1: Managing in a Lower Oil Price Environment
MANAGING IN A LOWER OIL PRICE ENVIRONMENT November 2020
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: North Andean Focus
NORTH ANDEAN FOCUS SOUTH & NICARAGUA CARIBBEAN ¥, CENTRAL A SEA) sf a i ; » om N GUYANA J / 4 VENEZUELA 1 4 , q \ 4 \ Qe COLOMBIA ae 7 ’ GUIANA 1 ‘ ATLANTIC f \ OCEAN 1 North ; Andean / Focus ,’ y , BRAZIL PACIFIC , Countries OCEAN 42 eens Blocks
Slide 6: Company Snapshot
COMPANY SNAPSHOT Capital Structure ($U.S.)1 Q3 2020 Production Mix Gross debt ($M)2 3 $557 (-) 2025 Puerto Bahia Debt ($M) $203 Natural (+)Risk Management Assets, net ($M)4 ($2) 3% gas = Consolidated Total Indebtedness excl. 2025 Puerto Bahia debt ($M)5 $352 6 (-) Cash and Cash Equivalents (excludin
Slide 7: 2020 Revised Guidance
2020 REVISED GUIDANCE Assumes a $45/bbl Brent Reaffirming our guidance only adjusting transportation costs for the acquisition of IVI and changes to accounting treatment of unused ancillary contracts. Jan 1, 2020 – Jul 1, 2020 - Jan 1, 2020 – Jul 1, 2020 – Dec 31, 2020 Dec 31, 2020 Sep 30, 2020 Sep 3
Slide 8: Program to Manage COVID-19 and Lower Oil Price Environment
PROGRAM TO MANAGE COVID-19 AND LOWER OIL PRICE ENVIRONMENT - Reduced field level operating break-evens from $33/bbl in 2019 to an estimated $27-$28 (1) /bbl in the second half of the year. - 21% reduction in Q3-2020 vs Q1-2020 unit production costs - 12% reduction in Q3-2020 vs Q1-2020 unit transport
Slide 9: Committed to ESG, Following International Standards
COMMITTED TO ESG, FOLLOWING INTERNATIONAL STANDARDS Environment Social Governance • Working in harmony with the environment • Operating with excellence and ensuring • Acting consistently and transparently the health and well-being of our employees Our • Employing the best talent and promoting commit
Slide 10: Quarterly Results
QUARTERLY RESULTS Capital expenditures, production and transportation cost Production (Kboe) (1) Production cost ($/boe) Transportation cost ($/boe) Capital Expenditures ($/boe) 1. Production volumes are reported on a Company working interest before royalty basis, including total volumes produced fr
Slide 11: Our Portfolio
OUR PORTFOLIO Large diversified asset base with significant acreage and infrastructure CORE • Quifa • Guatiquia • Cubiro • CPE-6 SUSTAINING • Near field exploration on existing producing blocks GROWTH • Colombia exploration in oil and natural gas • Offshore Guyana • Ecuador • Farm-in opportunities
Slide 12: Hedging Program
HEDGING PROGRAM Hedging portfolio Put Spread Three Ways Total Volumes 1,282 1,220 1,200 673 611 677 617 641 612 Hedged
Slide 13: Balance Sheet Strength
BALANCE SHEET STRENGTH Strong cash position, low leverage ratios Balance sheet metrics – September, 2020 Total cash/cash and cash equivalents ($MM) $421 / $260 No debt maturities (1) Consolidated Net debt/EBITDA 1.3x until 2023 Debt to book capitalization(2) 34% (3) Interest coverage 7.3x Credit rat
Slide 14: Sustaining & Growth Assets
SUSTAINING & GROWTH ASSETS
Slide 15: 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. Further testing expected in 2020. • Asai-1 exploration well, on the Guama block, targeting liquids rich natural gas potential from multiple prod
Slide 16: Guyana
GUYANA Exciting exploration opportunities • Over 1.9 million gross acres in the hottest offshore exploration basin in the world. • Two well commitment plus a two well option. • Jethro exploration well discovered in excess of 200mm bbls of resources in a lower tertiary target, Joe prospect currently
Slide 17: 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 18: Puerto Bahia
PUERTO BAHIA Bulk Liquid and Dry Cargo Port Liquid Bulk Terminal Crude and refined products reception, storage and loading/unloading Tanker Vessels Barges Tank Trucks General Cargo Terminal RoRo Cargo Vehicles High & heavy cargo General Cargo Livestock scrap ● Puerto Bahía was designed to cover the s
Slide 19: ESG
ESG
Slide 20: Environment
ENVIRONMENT Working in harmony with the environment 2019 2022 2025 2030 10-year decarbonization Long-term strategy and GHG strategy emissions reporting plan (2020 - 2030) in three horizons Definition of 1st horizon 2nd horizon 3rd horizon strategy Measure and reduce Mitigation and Migrate to a low ca
Slide 21: Social
SOCIAL Sustainable business with excellence and ensuring the health and well-being of our employees 1. 2. 3. Long-term Continue to maximize our Inclusive economic Education: Quality of Life: social impact, focused in 3 development: Program ‘Education comes Program ‘Improving lives’ strategy social i
Slide 22: Governance
GOVERNANCE Acting consistently and transparently Long-term At Frontera, we ensure compliance with applicable laws, translate good corporate governance into policies, decisions, and responsible actions, while promoting transparency strategy and preventing compliance risks. As a result, one of our str
Slide 23: Appendix
APPENDIX
Slide 24: Third Quarter 2020 Operational & Financial Results
THIRD QUARTER 2020 OPERATIONAL & FINANCIAL RESULTS Q3 2020 Q2 2020 % Chg. Production before royalties (Boe/d) 43,202 42,597 1% Net (Loss) income ($MM) ($90) ($68) 34% Net sales ($MM)(1) $135 $113 19% Operating EBITDA ($MM)(2) $52 $38 39% Net sales realized price($/Boe)(3) $36.31 $34.62 5% Production
Slide 25: Third Quarter 2020 Financial Results
THIRD QUARTER 2020 FINANCIAL RESULTS Q/Q change in cash bridge 1. Sum of: Changes in Non-cash Working Capital + Others 2. Cash flow from Operations – Cash flow from Investing
Slide 26: Reserves Evaluation Results
RESERVES EVALUATION RESULTS Replaced 112% of net 2019 production and strong 2P NVP10 value 2P Net Reserves - MMBOE NPV by Category @ 10% (MMUSD) ● Replaced 112% of 2019 Net 2P reserves. ● Heavy oil represents 68% of proved plus probable reserves, light oil 30% and natural gas 2%. ● 67% of 2019 total
Slide 27: Proven Management Team
PROVEN MANAGEMENT TEAM Leadership with Global Experience • Over 39 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, including
Slide 28: 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 • Former President of the
Slide 29: Frontera Energy
S FRONTERA ENERGY