Frontera Reveals YE:21 Reserves

(Frontera, 16.Feb.2022) — Frontera Energy Corporation (TSX: FEC) announced the results of its annual independent reserves assessment conducted by DeGolyer and MacNaughton (D&M). All dollar amounts in this news release and the Company’s financial disclosures are in United States dollars, unless otherwise noted. All of the Company’s booked reserves for the year ended 31 December 2021 are located in Colombia and Ecuador.

Orlando Cabrales, Chief Executive Officer, commented:

“Frontera delivered solid reserves results in 2021. The company replaced 157% of net 1P reserves and 105% of net 2P reserves, and extended our net 1P reserves life index to 8.7 years and our net 2P reserves life index to 13.3 years. We also increased net 2P natural gas and associated natural gas liquids reserves by 105% to 19.1 MMboe, further diversifying Frontera’s future production mix. The net present value (10% discount) on December 31, 2021 of the company’s 2P reserves increased by 61% to $3.036bn before tax and $2.248bn after tax due in part to higher Brent prices year over year and greater operational and development cost stability.”

2021 Reserves Report Highlights:

For the year ended 31 December 2021, Frontera:

  • Added 13.1 MMboe of 2P net reserves, slightly increasing the company’s 2P net reserves to 167.0 MMboe, compared to 166.4 MMboe at 31 December 2020. The company’s 167 MMboe of net 2P reserves consist of 62% heavy crude oil, 27% light and medium crude oil and 7% conventional natural gas and 4% natural gas liquids.
  • Achieved a 1P net Reserves Replacement Ratio of 157% and a net 2P Reserve Replacement Ratio of 105%.
  • Extended 1P reserves life index to 8.7 years compared to 6.4 years at 31 December 2020.
  • Extended 2P reserves life index to 13.3 years compared to 10.3 years at 31 December 2020.
  • Added 7.8 MMboe of 3P net reserves, for a total of 217.1 MMboe at 31 December 2021, slightly lower compared to 221.8 MMboe at 31 December 2020.
  • Achieved a three-year average finding and development (F&D) cost of $8.50/boe on a 2P basis ($3.38/boe in 2020) with upstream reserves-based capital expenditures of $187mn ($101mn in 2020), not including changes in future development costs (“FDC”). 1P F&D cost three-year average was $9.80/boe in 2021 compared to $7.38/boe in 2020.
  • Increased 2P reserves on a gross working interest basis before royalties by 2% to 178.2 MMboe compared to 174.0 MMboe at 31 December 2020. Delivered 3P reserves on a gross working interest basis before royalties of 229.8 MMboe compared to 230.4 MMboe at 31 December 2020.
  • The Net Present Value (NPV) for the net 2P reserves, discounted at 10% before tax, is $3.036bn at 31 December 2021, compared to $1.888bn at 31 December 2020. The increase in NPV for the 2P reserves is primarily due to higher commodity prices at 31 December 2020 and improved development and operational cost stability. See the Net Present Value After Tax summary table below for more information.