Frontera Energy Corporation · TSX:FEC
Frontera Energy — Investor Presentation (December 2019)
33 slides from Frontera Energy's investor presentation, December 2019
Slide 1: Sustainable Production with Exploration Focused Growth
Sustainable Production with Exploration Focused Growth December 2019
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: Frontera Energy
Frontera Energy North Andean Focus GUYANA 4
Slide 5: Frontera Energy Company Snapshot
Frontera Energy Company Snapshot Q3 2019 Production Mix Capital Structure ($U.S.) (1) Shares Outstanding (TSX: FEC; MM) 97 Natural Gas Market Cap ($MM)(2) $695 3% Heavy Oil Total Cash(3) /Cash and Cash Equivalents ($MM) $442 / $314 Long-Term Debt ($MM Face/Market Value)(4) $350 / $358 70 Mboe/d 48%
Slide 6: 2020 Guidance
2020 Guidance Cost Reductions, Strong EBITDA, Stable Capex and Production 2019 Revised 2019 Guidance 2020 Guidance Guidance Operating EBITDA(1) (MM) $400 to $450 $525 to $575 $400 to $450 Capital Expenditures(2) (MM) $325 to $375 $325 to $375 $325 to $375 Average Daily (mboe/d) 65 to 70 65 to 70 60
Slide 7: EBITDA Sensitivities to 2020 Guidance (Brent @ $60/bbl)
EBITDA Sensitivities to 2020 Guidance (Brent @ $60/bbl) 2020 Operating EBITDA Guidance of $400-$450 Million Production Cost ($/boe) +$1.0/boe (23) 23 ($1.0)/boe Transportation Cost ($/boe) +1.0/boe (21) 21 ($1.0)/boe Oil Price Differential +1.0/bbl (19) 19 ($1.0)/bbl Oil Price ($1)/bbl (18) 18 $1/bb
Slide 8: Sustained Production, Strong EBITDA, Lower Costs
Sustained Production, Strong EBITDA, Lower Costs Stable Sustaining Capex with Exploration Growth Upside Daily Production, before royalties (Boe/d) Operating EBITDA and Capex ($MM) 80,000 $600 70,000 $500 (1) 60,000 $400 50,000 40,000 $300 30,000 $200 20,000 $100 10,000 - $0 Q417 Q118 Q218 Q318 Q418
Slide 9: Company Strategy
Company Strategy Sustaining Base Production for the Next Three to Five Years from Core Assets, Developing Growth Initiatives, Optimizing Cash Generation and Shareholder Returns Core Portfolio of Stable Assets with Growth Options in Colombia, Guyana and Ecuador Partner of Choice Wherever We Operate (
Slide 10: Core Assets Deliver Stable Base Production, Exploration Drive Growth
Core Assets Deliver Stable Base Production, Exploration Drive Growth Five Year Production Profile from Restructuring Transition to Growth Frontera Daily Production (before royalties Boe/d) In the Portfolio Future Opportunities Transition Growth 80,000 • VIM-1/Guama/VIM-22 • Onshore Perú • Guyana and
Slide 11: Our Portfolio
Our Portfolio Large Diversified Asset Base with Significant Acreage and Infrastructure CORE • Quifa • Guatiquía • Cubiro • CPE-6 SUSTAINING • Z-1 (Peru) • Near field exploration on existing producing blocks GROWTH • Colombia exploration in oil and natural gas • Offshore Guyana • Ecuador • New contra
Slide 12: Balance Sheet Strength
Balance Sheet Strength Strong Cash Position, Low Leverage Ratios Balance Sheet Metrics – September 30, 2019 Total Cash(1)/Cash and Cash Equivalents ($MM) $442 / $314 Net Debt/EBITDA(2) 0.1x Debt to Book Capitalization(3) 23% Interest Coverage(4) 16.8x Hedged Production (Q4 19 / Q1 20 / Q2 20/ Q3 20)
Slide 13: Sustainability & Shared Value Model
Corporate Responsibility and Partner of Choice Committed to Sustainable Operations Sustainability & Shared Value Model Frontera continues to implement its social investment framework in a manner that encourages local community engagement and involvement. Frontera adopted the Declarations on Human Ri
Slide 14: Core Assets
Core Assets
Slide 15: Quifa: Cornerstone of Heavy Oil Production
Quifa: Cornerstone of Heavy Oil Production Stable Production at 27,000 bbl/d for Five Years Recent Exploration Discoveries Reserves Balances: • As of December 31, 2018 (before/after royalties) • 1P: 45.0/38.6 MMbbl • 2P: 56.8/48.4 MMbbl Key Characteristics: • ~300 wells on production • Facilities ca
Slide 16: Hamaca Field (CPE-6)
Hamaca Field (CPE-6) Large Oil In Place, Reserves, Production Upside 2018 Reserves Balance (before/after royalties) • 1P: 21.6/21.6 MMbbl • 2P: 27.4/27.4 MMbbl • ~ 190 wells for a 5 Mbbl/d and 250 Mbbl/d of water plateau Key 2019 Activities: • Drill two exploration wells, 13 development wells and on
Slide 17: Guatiquía: Building on Deep Llanos Success
Guatiquía: Building on Deep Llanos Success Stable Production at 15,000 bbl/d for Three Years Key Activities: • Three development wells in 2019 • Cocodrilo exploration upside • Potential expansion of Yatay field Key Characteristics: • High productivity light and medium oil reservoirs • Existing under
Slide 18: Cubiro: Additional Light Oil Potential
Cubiro: Additional Light Oil Potential Waterflood to Increase Production and Recovery Efficiency Key 2019 Activities: • Four development wells • One water injector well Key Features: • Potential production growth during the next two to three years Successful Waterflood • Successful waterflooding pil
Slide 19: Sustaining & Growth Assets
Sustaining & Growth Assets
Slide 20: Lower Magdalena Valley
Lower Magdalena Valley Oil, Natural Gas and Liquids Opportunities • Two exploration wells, one development well and workovers targeting bypassed pay planned in the next 12 months • La Creciente gas plant has capacity for 100 mmcf/d of gas treatment currently processing 14 mmcf/d with 50 mmcf/d of sp
Slide 21: 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, total capital estimated at less than $50 million net to Frontera • Multiple play types with vertical and lateral migration der
Slide 22: Ecuador: Intracampos Exploration Bid Round
Ecuador: Intracampos Exploration Bid Round Awarded the Perico and Espejo Blocks (Frontera 50% / GeoPark 50%) • Four year exploration term with two year extension • Proven hydrocarbon basin near existing production and infrastructure • Prospective, low-risk exploration blocks located in Sucumbíos Pro
Slide 23: Peru
Peru Potential for New Contract & Shallow Offshore Exploration Block 192 • Production inconsistent resulting from periodic NorPeruano pipeline integrity issues and community disruptions • During periods of operation, production steady at ~8,500 bbl/d. For guidance, production assumed to be on-line 5
Slide 24: Realizing Value from Non-Core Assets
Realizing Value from Non-Core Assets Port and Pipeline Infrastructure 1) ODL Pipeline 3) Puerto Bahía 21% Net Equity Interest(1) 39% Indirect Equity Interest(2) • Greenfield liquids import-export terminal with 2.4 MMbbl of • Transports the Company’s heavy crude oil from the Quifa SW storage capacity
Slide 25: Investment Opportunity
Investment Opportunity Enhancing the Portfolio Experienced, Focused asset 97% oil weighted technically- Partner of base in North with Brent price focused exposure Choice Andean Region management team in place Strong balance Attractive, low- sheet with Improved Over 90% near- risk “brownfield” quarte
Slide 26: Appendix
Appendix
Slide 27: Third Quarter 2019 Operational & Financial Highlights
Third Quarter 2019 Operational & Financial Highlights Strong Operating EBITDA and Improving Cost Structure Price / Revenue / Production Q3 2019 Q3 2018 % Chg. Brent oil prices decreased 18% year-over-year to $62.03/bbl. Production Before Royalties (Boe/d) 70,213 66,393 6% Revenue for Q3 2019 was $27
Slide 28: Realizing Value from Non-Core Assets
Realizing Value from Non-Core Assets Financial Information Nine months ended ($M) FY2018 YTD2019 ($M) September 30, Dividends Receivable 2018 2019 ODL 9,047 0 Dividends received from associates Bicentenario 14,447 36,878 ODL(1) 20,931 32,704 Total Dividends Receivable 23,494 36,878 Bicentenario 27,9
Slide 29: 2018 Reserves Evaluation Results
2018 Reserves Evaluation Results Replaced 103% of 2018 Production and Strong 2P NPV10 Value 2P Net Reserves - MMBOE NPV by Category @ 10% (MMUSD) 175 25 -24 3,000 150 2,523 2,500 125 2,206 1,932 587 2,000 1,918 100 402 778 566 714 75 154 154 155 1,500 458 577 611 50 1,000 1,072 1,222 25 500 775 817
Slide 30: Frontera Offers Deep Value Following Restructuring
Frontera Offers Deep Value Following Restructuring Improved Liquidity Driven by Index Inclusion and Share Buybacks Enterprise Value (US$)/2019 Guidance (Boe/d)(1) Enterprise Value (US$)/2P Reserves (2018) (1) $50,000 $18 $45,000 $16 $40,000 $14 $35,000 $12 $30,000 $10 $25,000 $8 $20,000 $6 $15,000 $
Slide 31: 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 32: 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 33: 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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