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Frontera Energy's Record-Breaking 2023 Financial Triumph and Sustainable Endeavors


Leo Gonzalez

March 8, 2024 - 03:42 am


Frontera Energy Corporation Announces Strong Financial and Operational Results for 2023

CALGARY, AB, March 7, 2024 /PRNewswire/ - Frontera Energy Corporation (TSX: FEC) ("Frontera" or the "Company"), an industry leader in energy exploration and production, is proud to report its financial and operational results for the fourth quarter and full year ended December 31, 2023. The company has made notable strides in its financial position, with a reported full year net income of $193.5 million, including $92.0 million in Q4'23. Moreover, the company's average daily production stood at 40,919 barrels of oil equivalent per day (Boe/d), contributing to a substantial full year operating EBITDA of $467.2 million.

Outstanding Performance Indicators

The fourth quarter declared quarterly dividend of C$0.0625 per share, amounting to $3.9 million in aggregate, is payable around April 16, 2024. Frontera disclosed 164.1 Million Boe 2P gross reserves and 108.7 million 1P gross reserves, reflecting the company's robust reserves index, which is a key indicator of future production sustainability. In financial terms, the company's 2P net present value before tax discounted at 10% stands at an impressive $3.5 billion as of December 31, 2023.

Record Achievement in Reserves Life Index

The company revealed a 7.3 year 1P and an 11.0 year 2P gross reserves life index, indicating a promising longevity of the production capabilities of the reserves. This measure underscores Frontera’s successful reserves management and the potential for sustained output over the coming years. Additionally, the estimates of 514-628 Mmboe PMean unrisked gross prospective resources in the Maastrichtian Horizons in the Corentyne Block points towards considerable future growth potential.

Commitment to Sustainability

A significant achievement for the year includes the commissioning of the first solar farm by the company, offsetting 50% of emissions through carbon credits. The company also made remarkable strides in environmental stewardship, preserving and restoring 1,681 new hectares in Casanare and Meta, Colombia. These initiatives reflect Frontera's dedication to sustainable energy production and reducing its environmental footprint.

Executives' Perspective

Gabriel de Alba, Chairman of the Board of Directors, commented on the year’s performance. He stated, "Frontera delivered a substantial EBITDA of $467MM, closing the year with a strong balance sheet. The Infrastructure business generated Adjusted Infrastructure EBITDA of approximately $120 million and builds momentum following strategic developments." Alba also touched on the Guyana exploration business and the company's commitment to returning value to shareholders.

Orlando Cabrales, CEO, highlighted the strategic and operational targets achieved, including an increased heavy crude oil production by 9% year over year, and the successful management of production costs, transportation costs, and capital expenditures. Cabrales further outlined the company’s continued commitment to sustainable production and value-focused business practices to drive operational and financial results.

Fourth Quarter and Full Year 2023 Operational and Financial Summary

Frontera's impressive financial summary showcases substantial revenue from both the fourth quarter and the full year. The company recorded an unprecedented net income of $92.0 million in Q4'23 and a $193.5 million for the full year. Production averaged 39,267 boe/d in Q4 2023, with a sizeable revenue generation indicative of the strength in the company’s core business performance.

In addition to the financial achievements, Frontera's operational results highlight heavy crude oil production, combined production of light and medium crude oil, conventional natural gas production, as well as total production in boe/d. The quantitative data presents a clear picture of the company’s operational scale and its ability to maintain a consistent level of output throughout the period.

Progress in Guyana and Infrastructure Developments

Frontera is committed to its exploration endeavors, with significant prospective resources estimated in the Maastrichtian horizons in the northern portion of the Corentyne block, Guyana. The commissioning of the first solar farm complements these efforts, catering to corporate social responsibility through a focus on sustainability and reduced emissions.

Infrastructure business: Full year Adjusted Infrastructure EBITDA was reported at approximately $120 million, with ODL transporting over 243,000 bbl/day and Puerto Bahia generating operating EBITDA of around $20 million. The infrastructure business is highlighting Frontera's ability to diversify revenue streams and harness the value of midstream assets.

Enhancing Shareholder Returns

Frontera's endeavors to enhance shareholder value are long-standing, returning over $306 million to shareholders since 2018. The company's commitment to its shareholders is further exemplified by its normal course issuer bid program.

Investment in Core Businesses

Frontera's core businesses, encompassing its operational mastery in Colombia and Ecuador, as well as the promising exploration initiatives offshore Guyana, reflect the company’s strategic vision for growth.

Colombia and Ecuador Upstream Onshore: Executing the exploration and production capacity in Colombia and Ecuador has remained at the forefront, with consistent capital investments fueling progress in these regions.

Infrastructure Colombia: Frontera continues to strategically develop its midstream assets, focusing on partnerships and investments to extend the longevity and commercial viability of key infrastructure assets.

Guyana Exploration: With discoveries off the coast of Guyana and strategic reviews in progress for potential farm-downs of interests in the Corentyne block, Frontera is set to expand its exploration footprint with a keen eye on sustainable growth.

Financial Year Highlights and Operation Progress

The financial and operational highlights for 2023 align with Frontera's objectives, illustrating the integration of strategic planning and execution to yield strong financial outcomes and promising operational advancements. The company's reserves evaluation, conducted by DeGolyer and MacNaughton Corp, and sustainability strategy further solidify Frontera's position as a committed and socially responsible player in the energy sector.

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In summary, Frontera Energy Corporation's achievements in the past year set a precedent for a progressive and environmentally conscious approach to energy production. Through a combination of robust financials, strategic operational initiatives, and a targeted exploration program, Frontera is well-positioned to forge ahead with confidence into 2024 and beyond.

End of Article.