(Frontera, 15.Mar.2022) — Frontera Energy Corporation (TSX: FEC) announces that the Toronto Stock Exchange (the “TSX”) has accepted its notice to initiate a normal course issuer bid (the “NCIB”) for its common shares, upon the expiry of its current normal course issuer bid on 16 March 2022.
Pursuant to the NCIB, Frontera may purchase up to 4,787,976 Common Shares during the 12-month period commencing 17 March 2022, and ending 16 March 2023, representing approximately 10% of the company’s “public float” (as calculated in accordance with the TSX rules) as at 7 March 2022. As at 7 March 2022, there were 94,449,994 Common Shares issued and outstanding of which 47,879,767 constitute the “public float”, calculated in accordance with the rules of the TSX. There are no persons acting jointly or in concert with the Company in respect of the NCIB.
The average daily trading volume of the Common Shares was 117,083 Common Shares over the period between September 1, 2021 and 28 February 2022. Consequently, daily purchases through the facilities of the TSX will be limited to 29,270 Common Shares, other than block purchase exceptions.
Frontera believes that, from time to time, the market price of its Common Shares may not fully reflect the underlying value of its business, future prospects and financial position. In such circumstances, Frontera may purchase for cancellation outstanding Common Shares, thereby benefitting all shareholders by increasing the underlying value of the remaining Common Shares.
In connection with its NCIB, Frontera has entered into an automatic share purchase plan with its designated broker, BMO Nesbitt Burns Inc., to facilitate the purchase of Common Shares under the NCIB. The Plan allows for purchases by the company of its Common Shares at any time, including, without limitation, when the company would ordinarily not be permitted to make purchases due to regulatory restriction or self-imposed blackout periods. Purchases will be made by BMO based upon the parameters prescribed by the TSX and the terms of the parties’ written agreement. The Plan has been pre-cleared by the TSX and will be implemented at the time the NCIB commences.
Purchases subject to the NCIB will be carried out pursuant to open market transactions through the facilities of the TSX or alternative trading systems, if eligible, by BMO on behalf of Frontera in accordance with the Plan and applicable regulatory requirements. The price to be paid by Frontera for any Common Share will be the market price at the time of acquisition, plus brokerage fees, or such other price as the TSX may permit. All Common Shares purchased by Frontera under the NCIB will be returned to treasury and cancelled.
The company’s indenture, dated as of 21 June 2021, pursuant to which US$400mn aggregate principal amount of 7.875% senior notes of the company due 2028 were issued (the “Indenture”), imposes certain restrictions on the Company’s ability to repurchase its Common Shares. However, based on other provisions of the Indenture, the company is not currently restricted from completing the purchases under the NCIB.
Under its normal course issuer bid that will expire on 16 March 2022, Frontera sought and obtained approval from the TSX to repurchase for cancellation 5,197,612 Common Shares. As at 7 March 2022, Frontera had purchased for cancellation 4,051,100 Common Shares at a volume weighted average price of $7.09 per share, excluding brokerage fees. Frontera made the purchases on the open market.
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