#Colombia #Canada #Calgary #Frontera Energy #Chemron

Frontera Energy Corporation Announces New Agreement with Chevron

Frontera Energy Corporation, listed on the TSX under the ticker FEC and known in the OTCQX market as FECCF, has made a significant business move. The Canadian firm, which is actively engaged in oil and natural gas exploration, development, and production in South America, has officially entered into a prepayment and commercial agreement worth $120 million with Chevron Products Company, a subsidiary of the oil giant Chevron.

Details of the Agreement

This newly struck agreement enables Frontera's Colombian subsidiary to receive an initial advance of $80 million. In return, Frontera commits to supplying a segment of its crude oil production to Chevron over the next two years. For added flexibility, the agreement also permits Frontera to request an additional $40 million advance within six months on a fully committed basis.

The financial mechanics embedded in this agreement outline a prepayment scheme that includes a discount structured at the Secured Overnight Financing Rate (SOFR) plus an additional 4.25% per annum. Repayment terms are strategically designed to commence after a grace period of six months, allowing Frontera to utilize these funds effectively without immediate repayment pressures.

The funds generated from this prepayment agreement are earmarked specifically for managing working capital flows and are expected to notably improve the company's liquidity position. This strategic deal is also set to replace an existing prepayment agreement that is due to expire at the end of January 2026.

Background on Frontera Energy

Frontera Energy Corporation specializes in the exploration, development, production, transportation, storage, and sale of oil and natural gas in regions of South America. It holds a diverse portfolio that includes interests in 20 exploration and production blocks across Colombia and Guyana, paired with pipelines and port capabilities situated in Colombia. Frontera is committed to operating its business in a manner that prioritizes safety, social responsibility, and environmental sustainability.

The agreement with Chevron signifies not only a boost to Frontera’s cash flow and operational capacity but also an affirmation of its strategic plans for the future. The strengthened partnership with Chevron may allow Frontera to leverage Chevron's vast distribution and market resources, subsequently aiding in enhancing its operational efficiency and market reach.

Such moves underscore Frontera’s ambitions in the volatile oil market. With constant fluctuations in crude prices and a strong commitment to sustainable operations, agreements like this one aid in navigating the complexities of the energy landscape.

Conclusion

In closing, this substantial deal indicates Frontera Energy Corporation's intent to solidify its market position through strategic financial maneuvers and partnerships. By aligning with a powerhouse like Chevron, Frontera aims to harness shared benefits, optimize production, and pave the way for future growth.

For those interested in receiving the latest press releases directly as they are published, Frontera offers an online subscription service on their official site. With developments like this, staying informed about the business activities of Frontera is crucial for investors and stakeholders.

This agreement not only represents a financial initiative but also cements Frontera's role and resilience in the natural resource sector, particularly in the face of ongoing shifts in energy demand and policy requirements.