Frontera Energy Corporation · TSX:FEC
Frontera Energy — Q2 2018 Earnings Presentation
16 slides from Frontera Energy's earnings presentation, Aug 3, 2018
Slide 1: Positioning for Growth
Positioning for Growth Second Quarter 2018 Earnings Release Conference Call Presentation August 3, 2018
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: Corporate Snapshot
Frontera Energy Corporate Snapshot Capital Structure ($U.S.) (1) Q2 2018 Production Mix Shares Outstanding (TSX: FEC; MM) 100 Natural Gas Market Cap ($MM)(2) $1,451 Heavy Oil 7% Total Cash(3) /Cash and Cash Equivalents ($MM) $730 / $551 Long-Term Debt ($MM)(4) $350 37% 64.1 Mboe/d Enterprise Value (
Slide 4: Key Priorities
Frontera Energy Key Priorities Sound financial footing, with a strong balance sheet and the flexibility to manage our cash and take advantage of exploration success and other opportunities which become available. To improve the quality of our existing upstream business through higher production, imp
Slide 5: Exploration Update: Llanos Block in Colombia
Exploration Update Llanos 25 Block in Colombia Acorazado prospect (Llanos 25 Colombia): • Acorazado-1 well testing structural closure on trend with proven Cusiana and Cupiagua hydrocarbon fairway • Exploration well spud on April 22nd • Reached total depth of 15,470 feet on July 23, 2018, a week ahea
Slide 6: Exploration Update: Offshore Z-1 Block in Peru
Exploration Update Offshore Z-1 Block in Peru Delfin Sur-1 prospect (Block Z-1 Peru): • Delfin Sur-1 well started drilling on July 14, 2018 and is expected to reach total depth by the middle of August with the Petrex-10 drilling rig • Targeting a total depth of 9,750 feet, currently at 6,000 feet De
Slide 7: Transportation Commitments Summary
Transportation Commitments Summary Over $1.5 Billion Reduction in 2018 Transportation (Ship-or-Pay) December 31, 2017 June 30, 2018 2,876 Other ToP(1) 425 P135(2) CENIT (CLC) 422 677 Bicentenario 420 401 872 1,185 372 931 388 111 330 217 470 197 902 BIC system at 167 369 $1.8 Billion BIC corridor at
Slide 8: Transportation Costs
Transportation Costs P-135 Arbitration Settlement, Termination of Ship or Pay Contracts Quarterly Transportation Cost ($/boe) $14.19 $14.28 $12.68 $11.77 $11.81 Transport Cost ($/Boe) Q217 Q317 Q417 Q118 Q218 Fees Paid on Suspended Pipeline Capacity ($/Boe) $3.38 $5.33 $4.16 $6.02 $7.00 Termination
Slide 9: Revising EBITDA Guidance Upwards
Revising EBITDA Guidance Upwards Increasing Brent Oil Price Forecast from $63/bbl to $70/bbl 2018 Updated Guidance Metrics and Year-to-Date Performance 2018 Year to Date Original New Change Operating EBITDA(1) $211MM $375 - $425MM $400 - $450MM 6% Capital Expenditures $166MM $450 - $500MM $450 - $50
Slide 10: Second Quarter 2018 Operational & Financial Highlights
Second Quarter 2018 Operational & Financial Highlights Strong Financial Results Q2 2018 Q1 2018 % Chg. PRICE / REVENUE / PRODUCTION Brent oil prices increased 12% quarter-over-quarter which helped Total Production (Boe/d)(1) 64,140 66,227 (3%) realized price increase 8% quarter-over-quarter, 13% exc
Slide 11: Q2 2018 Operational Highlights
Q2 2018 Operational Highlights Third Party Issues Impact Production Production Profile: Stable Production Mix: Balanced Mboe/d 72.4 71.1 65 -70 70 66.2 Natural Gas 64.4 64.1 60 7% 50 40 37% Heavy 64.1 Oil 30 Mboe/d 20 Light & 56% 10 Medium Oil 0 Q217 Q317 Q417 Q118 Q218 2018F Colombia Peru Combined
Slide 12: Financial Highlights
Financial Highlights Strong Balance Sheet and Stable Costs Balance Sheet Metrics (June 30, 2018) Cash Balances(1): Improving $ millions Total Cash(1) $730 million 800 700 600 132 180 179 99 Cash and Cash Equivalents $551 million 500 102 400 300 516 551 439 501 512 200 Working Capital $317 million 10
Slide 13: Balance Sheet Strength
Balance Sheet Strength Strong Cash Position, Low Leverage Ratios Balance Sheet Metrics Total Cash(1) /Cash and Cash Equivalents ($MM) $730/$551 Net Debt/EBITDA(2) (0.5)x Debt to Book Capitalization(3) 23.2% Interest Coverage(4) 12.4x No debt maturities until 2023 Credit Ratings Outlook: Stable Fitch
Slide 14: 2018 Brent Oil Price Hedging Summary
2018 Brent oil Price Hedging Summary FWD July 25th Floor Ceiling $78 74.87 74.11 74.19 74.18 74.07 73.89 $74 $70 USD/bble $66 $62 61.63 60.05 59.31 59.22 $58 $54 53.42 52.92 52.00 52.42 $50 $46 JUL18 AUG18 SEP18 OCT18 NOV18 DEC 18 Hedged 1,200K 1,200K 1,200K 1,200k 0 0 Volumes The positive impact of
Slide 15: Corporate Snapshot
Frontera Energy Corporate Snapshot Capital Structure ($U.S.) (1) Q2 2018 Production Mix Shares Outstanding (TSX: FEC; MM) 100 Natural Gas Market Cap ($MM)(2) $1,451 Heavy Oil 7% Total Cash(3) /Cash and Cash Equivalents ($MM) $730 / $551 Long-Term Debt ($MM)(4) $350 37% 64.1 Mboe/d Enterprise Value (
Slide 16: 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