Frontera Energy Corporation · TSX:FEC
Frontera Energy — Investor Presentation (March 2020)
34 slides from Frontera Energy's investor presentation, March 2020
Slide 1: Sustainable Production with Exploration Focused Growth
Sustainable Production with Exploration Focused Growth March 2020
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 Q4 2019 Production Mix Capital Structure ($U.S.) (1) Shares Outstanding (TSX: FEC; MM) 95.5 Natural Gas Market Cap ($MM)(2) $537 3% Heavy Oil Total Cash(3) /Cash and Cash Equivalents ($MM) $456 / $328 Long-Term Debt ($MM Face/Market Value)(4) $350 / $362 71 46% Mboe/
Slide 6: 2020 Guidance
2020 Guidance Cost Reductions, Strong EBITDA, Stable Capex and Production 2019 Revised 2019 Actual 2020 Guidance Guidance Operating EBITDA(1) (MM) $586 $525 to $575 $400 to $450 Capital Expenditures(2) (MM) $346 $325 to $375 $325 to $375 Average Daily (mboe/d) 70,875 65 to 70 60 to 65 Production(3)
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) ($1)/bbl (14) 18 $1
Slide 8: Sustained Production, Strong EBITDA, Lower Costs
Sustained Production, Strong EBITDA, Lower Costs Stable Sustaining Capex with Exploration Growth Upside Daily Production, before royalties (Boe/d) Operating EBITDA and Capex ($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 • Near field exploration on existing producing blocks GROWTH • Colombia exploration in oil and natural gas • Offshore Guyana • Ecuador • New contract opportunit
Slide 12: Balance Sheet Strength
Balance Sheet Strength Strong Cash Position, Low Leverage Ratios Balance Sheet Metrics – December 31, 2019 Total Cash(1)/Cash and Cash $456 / $328 Equivalents ($MM) Net Debt/EBITDA(2) 0.0x Debt to Book Capitalization(3) 22% Interest Coverage(4) 17.2x Hedged Production 2020(5) ~40% floors at $55 Bren
Slide 13: Environmental Footprint Strategy
Environmental Footprint Strategy We Work in Harmony with the Environment GOALS • • Excellent environmental performance Climate change leaders Conscious Employees and Green offices Contractors Efficient and innovative Positive impact in the operations regions where we operate 13
Slide 14: 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 15: Core Assets
Core Assets
Slide 16: 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, 2019 (before/after royalties) • 1P: 57.7/50.3 MMbbl • 2P: 61.9/53.9 MMbbl Key Characteristics: • ~300 wells on production • Facilities ca
Slide 17: Hamaca Field (CPE-6)
Hamaca Field (CPE-6) Large Oil In Place, Reserves, Production Upside 2019 Reserves Balance (before/after royalties) • 1P: 13.3/13.3 MMbbl • 2P: 33.1/33.1 MMbbl • Targeting ~4 Mbbl/d in 2020 with ~6 Mbbl/d exit rate Key 2020 Activities: • Drill 10-15 development wells • 2019 exploration success exten
Slide 18: Guatiquía: Building on Deep Llanos Success
Guatiquía: Building on Deep Llanos Success Stable Production at 15,000 bbl/d for Three Years Key Activities: • One development well in 2020, with follow up wells depending on results • Cocodrilo exploration upside • Potential expansion of Yatay field Key Characteristics: • High productivity light an
Slide 19: Cubiro: Additional Light Oil Potential
Cubiro: Additional Light Oil Potential Waterflood to Increase Production and Recovery Efficiency Key 2020 Activities: • One development well • One water injector well Key Features: • Potential production growth during the next two to three years Successful Waterflood • Successful waterflooding pilot
Slide 20: Sustaining & Growth Assets
Sustaining & Growth Assets
Slide 21: 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 produ
Slide 22: 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 • Two wells to be drill
Slide 23: Ecuador: Intracampos Exploration Bid Round
Ecuador: Intracampos Exploration Bid Round Awarded the Perico and Espejo Blocks (Frontera 50% / GeoPark 50%) • One exploration well and 3D seismic program planned for 2020 • Four year exploration term with two year extension • Proven hydrocarbon basin near existing production and infrastructure • Pr
Slide 24: 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 25: Realizing Value from Infrastructure Assets
Realizing Value from Infrastructure Assets Port and Pipeline Infrastructure 1) ODL Pipeline 3) Puerto Bahía 21% Indirect 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 stora
Slide 26: 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 Continued focus Attractive, low- sheet with Improved on operational risk “br
Slide 27: Appendix
Appendix
Slide 28: 2019 Operational & Financial Highlights
2019 Operational & Financial Highlights Strong Operating EBITDA and Improving Cost Structure 2019 2018 % Chg. Production Before Royalties (Boe/d) 70,875 71,032 (0.2%) Price / Revenue / Production Brent oil prices decreased 11% year-over-year to $64.16/bbl in Production After Royalties (Boe/d) 64,746
Slide 29: Realizing Value from Infrastructure Assets
Realizing Value from Infrastructure Assets Financial Information ($M) FY2018 FY2019 ($M) FY2018 FY2019 Dividends received from associates Dividends Receivable ODL 9,047 0 ODL (1) 39,617 58,403 Bicentenario 14,447 39,081 Bicentenario 27,966 0 Total Dividends Receivable 23,494 39,081 Total 67,583 58,4
Slide 30: 2019 Reserves Evaluation Results
2019 Reserves Evaluation Results Replaced 112% of Net 2019 Production and Strong 2P NPV10 Value 2P Net Reserves - MMBOE NPV by Category @ 10% (MMUSD) 175 26 -23 3,000 150 2,514 2,500 125 2,206 2,119 1,918 788 2,000 100 571 778 566 75 155 154 158 1,500 809 725 611 1,000 577 50 25 500 917 775 823 817
Slide 31: Frontera Offers Deep Value Following Restructuring
Frontera Offers Deep Value Following Restructuring Improved Liquidity Driven by Index Inclusion and Share Buybacks Enterprise Value (US$)/2020 Guidance (Boe/d)(1) Enterprise Value (US$)/2P Reserves (2019) (1) $35,000 $9 $8 $30,000 $7 $25,000 $6 $20,000 $5 $15,000 $4 $3 $10,000 $2 $5,000 $1 $0 $0 Fro
Slide 32: Proven Management Team
Proven Management Team Proven 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, inc
Slide 33: 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 34: Investor Relations Contact
INVESTOR RELATIONS CONTACT: ir@fronteraenergy.ca