#Canada #Calgary #Frontera Energy #Production Guidance #Oil Industry

Frontera Energy Provides an Operational Update and Announces 2025 Guidance

Frontera Energy Corporation (TSX: FEC) presents significant updates regarding its operational performance and offers insights into its capital expenditure plans and production guidance for 2025. This is a key move for stakeholders as the company navigates ongoing market challenges and aims for growth amidst uncertainties.

Operational Update for Q4 2024

Frontera's production results for the fourth quarter of 2024 demonstrate robust performance, with a current production of approximately 42,450 barrels of oil equivalent per day (boe/d). The year-to-date performance has averaged about 40,200 boe/d, aligning well within the company's annual production targets for 2024. Notably, the CPE-6 block has recently recorded another daily output milestone nearing 9,000 boe/d. This achievement underscores Frontera's focus on maximizing output in its core areas of Colombia and Ecuador.

In terms of infrastructure, the completion of a $10 million disbursement for the Puerto Bahia project marks a significant milestone, with plans to finish construction for the Reficar connection by the end of this year. This expansion could enhance the operational capacity and efficiency of Frontera’s distribution capabilities.

Strategic Review and Development in Guyana

Despite recent confusion caused by governmental comments regarding the Corentyne block Petroleum Agreement, Frontera remains committed to the agreement alongside its partner, CGX Energy Inc. The joint venture (JV) is taking proactive steps to mitigate any negative impacts these statements may have caused and has initiated negotiations to resolve any ambiguities affecting their operations.

The company is currently exploring various strategies to safeguard their interests in the region, a move that reflects the importance of this venture amidst evolving dynamics.

2025 Capital and Production Plans

For the upcoming year, Frontera has set ambitious production goals. The company expects to achieve an average full-year production ranging between 41,000 to 43,000 boe/d, representing a modest increase from 2024 levels. The anticipated Operating EBITDA is projected to be between $370-$415 million at $75 per barrel and $420-$465 million at $80 per barrel of Brent crude. This forecast is contingent on effective cost management and capital deployment practices.

Frontera plans to invest approximately $200-$245 million, including $30-$40 million designated for exploration within its Colombia and Ecuador operations. This planned investment reflects a 13% decrease compared to the previous year but remains focused on enhancing the most profitable segments of the business.

The exploration strategy for 2025 includes drilling three significant wells, notably the high-potential Hidra-1 well located in the VIM-1 block, complemented by projects in the Llanos 99 and Cachicamo blocks. Other activities will also include extensive seismic surveys to identify further potential reserves and ensure readiness for forthcoming drilling initiatives.

In addition, the company has committed $15-$20 million to enhance its infrastructure operations which include expanding the Reficar connection and related maintenance efforts in Puerto Bahia.

Financial Performance Expectations

Frontera anticipates total production costs to average between $14.00 – $15.00 per boe, a slight decrease compared to the previous year’s estimates. Conversely, transportation costs are projected to rise by approximately 11% reflecting increasing tariffs in trucking and pipeline services—reflecting broader economic trends.

For 2025, Frontera expects to generate a Free Cash Flow between $79-$122 million at $75 per barrel and between $124-$167 million at $80 per barrel scenarios. These projections highlight the company’s continued focus on generating shareholder value, which may also include dividends, distributions, or share buybacks depending on financial performance throughout the year.

Acknowledgment from Leadership

Orlando Cabrales, the CEO of Frontera Energy, noted the company's steady performance in the latter half of 2024 and reiterated their commitment to generating sustained value through effective operational strategies. He emphasized the importance of focusing on foundational strategies that prioritize value over volume, which will guide Frontera's decisions moving forward.

Overall, Frontera Energy Corporation's updates signal a transformative period ahead, characterized by a dedication to sustainable growth, strategic exploration, and the unwavering pursuit of operational excellence despite fluctuating market conditions.