Frontera Energy Corporation · TSX:FEC
Frontera Energy — Investor Presentation (March 2023)
37 slides from Frontera Energy's investor presentation, March 2023
Slide 1: Corporate Presentation March 2023
CORPORATE PRESENTATION March 2023
Slide 2: About Frontera Energy
About Frontera Energy Share Before Royalties (“SBR”) 2P Reserves (2022) Production (FY 2022)(1) 2% 4% • Frontera Energy Corporation is a Canadian public company 4% 8% listed on the Toronto Stock Exchange (TSX: FEC). • Frontera has a diversified portfolio of assets with interests in 31 exploration an
Slide 3: Corporate Snapshot
Corporate Snapshot Capital Structure (As at December 31, 2022) ($U.S.) ($MM) Balance sheet metrics – December 31, 2022 (1) (+) Long-term debt $405 Total Cash(8)/Cash and Cash Equivalents ($MM) $290 / $313 (2) (9)(10) (+) Total Lease Liabilities $3 Consolidated Net Debt / Operating EBITDA 0.3x (+) Ri
Slide 4: Our Core Focus
Our Core Focus Delivering value-focused Achieving continuous operational Creating a self-sustaining and production, cash flow, and improvements across the business. growing midstream business reserves from our base Colombia including Puerto Bahia and ODL operations. that provides upside optionality.
Slide 5: Focusing on Value over Volumes
Focusing on Value over Volumes Attractive low-cost asset base with robust cash flow generation Operating Netback per boe(2) (US$/boe) & Cash Provided (1) SBR Production (kboed) & Field Cycle Costs (US$/boe) by Operating Activities ($MM) SBR Production (kboed) (1) Historical SBR production excludes p
Slide 6: Disciplined Financial Performance And Robust Balance Sheet
Disciplined Financial Performance And Robust Balance Sheet • Strong Operating EBITDA margins • Ability to quickly adapt to different • Conservative leverage, consistently and cash flow generation capacity industry cycles below 1.0x net leverage Net Sales(1) & Operating EBITDA(1) (US$MM) Consolidated
Slide 7: A Track Record of Returning Capital to Shareholders
A Track Record of Returning Capital to Shareholders 2018 2019 2020 2021 2022 • Repurchased ~1.6 • Repurchased ~2.6 • Repurchased ~1.4 • Repurchased ~3.9 • Repurchased ~4.3 million shares for ~million shares for million shares for million shares for million shares for ~$17.8 million via ~$21.8 millio
Slide 8: Proven Track Record of Growing and Extending Reserves
Proven Track Record of Growing and Extending Reserves Net 2P Reserves(1) Growth and Diversification (Mmboe) RRR (%) / RLI (years) Increased ~18 mmboe of gas reserves Added ~12 mmboe of reserves in CPE-6 associated with field delineation and recovery factor increase Diversifying and growing reserves
Slide 9: Path to 50,000 barrels a day
Path to 50,000 barrels a day SBR production(1) (Kboe/d) Exploration Activities: Colombia (VIM & Hamaca) and Ecuador (Perico & Espejo Growth - additional exploration). Base management in current assets, including technology plan (chemical & mechanical Base water shutoff and chemical stimulation). Key
Slide 10: 2023 Guidance
2023 Guidance 2023 Full Year Guidance $80/bbl Case ($millions) Guidance Metrics Unit Frontera Consolidated Operating EBITDA $425 - $475 Average Daily Production(1) boe/d 40,000 - 43,000 Cash Income Taxes ($40) - ($60) Production Costs(2) $/boe $12.50 - $13.50 (9) Debt Service ($45) - ($50) Transport
Slide 11: Risk Management Strategy
Risk Management Strategy Frontera uses derivative commodity instruments to manage exposure to price volatility by hedging a portion of its oil production. Oil Hedges Ceiling and Floors (US$/boe) Open Strike Prices Type of Term Positions Put/ Call Instrument (bbl/d) ($/boe) January Put 14,839 80 Febr
Slide 12: Asset Overview
Asset Overview™ VENEZUELA FRONTERA LEYEND COLOMBIA BASINS ECUADOR BASIN © Capital chy [0 Lower Magdalena Valley [2 Orfente GFRONTERA 12
Slide 13: Quifa
Quifa Sustainable Long-term Asset Base 60% working interest / Frontera 70% of costs Partner Ecopetrol Contract type Association contract Contract term expiry December 2031 Net acreage 149,152 acres YE2022 SBR production 16,231 boed Base royalty rate 6% to 25%(1) • The Quifa SW field was discovered i
Slide 14: Guatiquia
Guatiquia Low-cost, high netback, medium oil asset Frontera 100% working interest Partner None Contract type Exploration & production Contract term expiry August 2035 Net acreage 11,086 acres YE2022 SBR production 8,695 boed Base royalty rate 6% to 25%(1) • Guatiquia Block is located in the Meta dep
Slide 15: CPE-6
CPE-6 Proven track-record of accelerated and solid growth Frontera 100% working interest Partner None Contract type Exploration & production Contract term expiry January 2042 Net acreage 169,626 acres YE2022 SBR production 4,991 boed Base royalty rate 6% to 25%(1) • The CPE-6 block is located approx
Slide 16: CPE-6: Success story with further growth potential
CPE-6: Success story with further growth potential • Updated Hamaca subsurface models provided the foundational base for the successful 2022 development/delineation campaign and area extension. • Defining multi-year development plan including increased oil and water-handling capacity increases to 48
Slide 17: New Development: VIM-1
New Development: VIM-1 Growing condensate field with enhanced oil recovery through gas reinjection Frontera 50% working interest, non-operator Partner Parex Resources Inc. Contract type Exploration & production Contract term expiry September 2044 Net acreage 109.640 acres YE2022 SBR production 1,280
Slide 18: New development: Perico & Espejo Blocks, Ecuador
New development: Perico & Espejo Blocks, Ecuador A new exciting Country (Ecuador), three successful exploration/ appraisal wells Frontera 50% working interest Perico Block Partner GeoPark Contract type Exploration & production • Currently in Exploratory Phase (June 2025). Net acreage 8,850 acres • 1
Slide 19: Colombia & Ecuador 5-year Exploration Strategy
Colombia & Ecuador 5-year Exploration Strategy • About 550 mmboe of net prospective resources in near-field opportunities which will be the main exploration focus over the next 5 years. • 59-111 mmboe of resources could be incorporated through exploration cycle depending on success rate within two y
Slide 20: Colombian Exploration Opportunities
Colombian Exploration Opportunities Organic Growth Through Near Field Exploration 252-503 Mmboe of mean prospective resources(1) in Colombia ✔ Lower Magdalena Valley Basin (gas): Exploration activities in Colombia including drilling the Chimi-1, Winner-1 and Tubara South-1 exploration wells in VIM-2
Slide 21: Guyana
Guyana Potentially Transformational Opportunity Frontera 68% working interest Partner CGX Petroleum Prospecting Licence Contract type (PPL) Gross acreage 862,600 acres Equity Ownership in CGX 76.97% Energy (TSXV:OYL) Consolidated Interest 92.63% • On January 23, 2023, Frontera and CGX, joint venture
Slide 22: Unique Commercialization & Marketing Model
Unique Commercialization & Marketing Model Frontera’s business model for crude oil commercialization and trading provides a significant competitive advantage compared to other producers that sell at the wellhead. • Integrated transportation and trading team • Focused on optimizing price and costs as
Slide 23: Commercialization, Marketing and Trading (Crudes)
Commercialization, Marketing and Trading (Crudes) Vasconia FEC Sales Price vs. Other Benchmark Crude Oils (Mars) Main Main2022 2022Market MarketDrivers Drivers 2022 FEC Main Exports 2022 Allocation Market Drivers • U.S. SPR release forced USGC (i.e. Mars) crude oils to be • In 2022, Frontera diverte
Slide 24: Transportation Rights
Transportation Rights Pipeline Interest & Notes on Pipeline Km Capacity W.I. FEC Transportation Rights (bbl/d) Transportation rights up to 1,200 OAM bbl/d and additional capacity of Origin: Tenay 391.4 100,000 5.45% up to 30,000 bbl/d, subject to Destination: available capacity from the other Vascon
Slide 25: Oleoducto de los Llanos Orientales ("ODL")
Oleoducto de los Llanos Orientales (“ODL”) Infrastructure, Services & New Business Frontera recently increased its equity interest in ODL to 35% Pipeline Crude Oil Dilution & Transportation Unloading Facility co-dilution GENERATES VALUE TO ITS 2021 Net Income Payout Ratio 100% SHARE HOLDERS 2022 Div
Slide 26: Puerto Bahia Overview
Puerto Bahia Overview Puerto Bahia’s assets under operation position the port as a strategic partner for both the Liquid bulk and dry cargo industries Overview A maritime terminal strategically located in the Cartagena bay with a natural depth of 16 mts allowing to handle deep draft vessel. Manages
Slide 27: Puerto Bahia: Key Performance Indicators
Puerto Bahia: Key Performance Indicators Historical and Projected(1) Adjusted EBITDA (US$MM)(2) Project Financing ToP FEC Volume: 40Kboed Take or Pay End: 31 Dec 2021 Hydrocarbon volumes RoRo volumes Break bulk volumes Kbpd Units Tons/m3 (1) Management estimates. (2) Adjusted for non recurring and o
Slide 28: Puerto Bahia Value Drivers
Puerto Bahia Value Drivers Strategic Geographical Location Ideal Operations No Draft Continuous Hinterland Hub Restriction Operation Connection Maximum gateway cargo 16 meters allowing the Protected bay with minimal tide Adjacent to Dique Channel / with capacity to establish a entrance of PostPanama
Slide 29: Frontera's ESG Strategy
Frontera’s ESG Strategy Context • Climate action Redefined • Life and ecosystems ENVIRONMENTAL sustainability • Clean water and sanitation 2020 • Responsible production and consumption commitments focused on ESG • Health and safety SOCIAL • Diversity, inclusion and equality • Community relations Est
Slide 30: 2022: Committed to ESG Performance
2022: Committed to ESG Performance SOCIAL GOVERNANCE ENVIRONMENTAL - A thriving tomorrow for all - - We are all integrity influencers - - A greener & cleaner future - Health and safety Outstanding business ethics Climate change • Reported TRIR of 0.83, the best rate in the • Recognized as one of “Wo
Slide 31: Top Tier Board and Management Team
Top Tier Board and Management Team Engaged and actively unlocking shareholder value Experienced Board of Directors ...And Management Team GABRIEL DE ORLANDO • Managing Director and Partner of The Catalyst ALBA(2) Capital Group Inc. CABRALES • Leader in the Colombian energy sector and CEO of Frontera
Slide 32: TSX: FEC.TO
TSX: FEC.TO Colombia Calle 110 N° 9 – 25 Piso 16 Bogotá, Colombia PBX: +57 1 511 2000 PBX: +57 1 745 1001 Calgary 2000, 222 – 3 Avenue SW Calgary, AB Canada T2P 0B4 PBX: +1 403 705 8814 www.fronteraenergy.ca Follow us on: Frontera Energy Corp. @FronteraEnergy @FronteraEnergy
Slide 33: Advisories
Advisories Forward-Looking Information – This presentation contains forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking information relates to activities, events or developments that Frontera Energy Corporation (“Frontera” or the “Company”) believes
Slide 34: Advisories
Advisories Certain information included in this presentation may constitute future oriented financial information and financial outlook information (collectively, "FOFI") within the meaning of applicable Canadian securities laws. The FOFI has been prepared by management to provide an outlook of the
Slide 35: Advisories
Advisories Production costs mainly includes lifting costs, activities developed in the blocks, and processes to put the crude oil and gas in sales condition. Production cost per boe is a supplementary financial measure that is calculated using production cost divided by production (before royalties)
Slide 36: Advisories
Advisories The Company's actual production, revenues, taxes and development and operating expenditures with respect to its reserves will vary from estimates thereof and such variations could be material. All evaluations and reviews of future net revenue are stated prior to any provisions for interes
Slide 37: Advisories
Advisories Reserves and Resources Definitions – Reserves and resources definitions, including those set out below, are set out in NI 51–101, CSA Staff Notice 51-324 and in the COGE Handbook. 1P Proved reserves 2P Proved plus probable reserves bbl(s) Barrel(s) of oil boe Barrel of oil equivalent boe/