In a detailed financial and operational update, Frontera Energy Corporation, a major player in the South American oil and gas industry, headquartered in Calgary, Alberta, has outlined its first-quarter results for 2024, indicating a mixed set of achievements and challenges.

Despite facing operational hurdles, Frontera achieved a notable operating EBITDA of $97.2 million, which, although robust, marked a decrease from the previous quarter’s $121.0 million. The company also reported a challenging quarter with a net loss of $8.5 million. Key to these results was the differentiated performance across its portfolio, with heavy oil operations showing resilience and light and medium oil assets witnessing a decline, primarily due to natural field declines and well failures, coupled with community blockades impacting the operations.

A highlight for the quarter was the record production at the CPE-6 block, achieving an average daily production of 6,228 barrels of oil per day. This growth in heavy crude oil production underscores Frontera’s strategic focus on enhancing its heavy oil asset portfolio. Moreover, the agreement in principle with Ecopetrol regarding the use of Frontera’s reverse osmosis water treatment facility under a two-year contract for the Quifa block is a significant environmental and strategic advancement. This initiative not only supports increased crude oil production capacity but also emphasizes Frontera’s commitment to sustainable and responsible water management.

Further reflecting on its strategic decisions, Frontera announced the exploration of strategic alternatives for its infrastructure business. These could range from a spin-off to a sale or merger, aiming to optimize value and focus on core business strengths. The potential restructuring comes alongside the company’s continued return on investor capital, manifested in the declared quarterly dividend and ongoing share buybacks, reinforcing its shareholder value commitment.

Frontera’s results also indicate a proactive approach to financial management, with significant divestments, including common share repurchases and buybacks of its 2028 unsecured notes. These moves highlight the company’s robust balance sheet and its strategy to manage liabilities actively.

On the production front, total production registered at 38,193 barrels of oil equivalent per day, a slight decrease from the previous quarter, principally attributed to natural declines and community-related operational delays. However, the company maintains its production and capital expenditure guidance for 2024, signaling confidence in its operational strategies and the underlying assets.

Frontera’s commitment to sustainability and ethical practices has not gone unnoticed, as evidenced by its recognition as one of the world’s most ethical companies by Ethisphere for the fourth consecutive year. This accolade is a testament to its dedication to maintaining high standards of corporate governance and sustainability.

The strategic review processes initiated for both its Colombian infrastructure business and its interests in the Corentyne block in Guyana underscore a pivotal phase for Frontera. These decisions are geared towards refining the business structure and enhancing shareholder value, reflecting a strategic pivot to maximize the potential of its diverse asset portfolio.

As it navigates through operational complexities and market dynamics, Frontera’s strategic maneuvers and financial diligence will be critical in steering toward sustained growth and profitability, ensuring it remains a key player in the regional oil and gas landscape.