CALGARY, ALBERTA (By Frontera, 30.Jan. 2026, Words: 1,480) — Frontera Energy Corporation entered into a definitive agreement with Geopark Limited for the divestment of Frontera Petroleum International Holdings B.V. for an equity value of up to $400mn, including $375mn payable upon closing and a $25mn contingent payment payable upon the achievement of certain development milestones, subject to customary closing adjustments.
As a result of the transaction, Frontera will emerge as a focused infrastructure company, anchored by its standalone and growing portfolio of infrastructure assets, including ODL and Puerto Bahia, while also retaining its interests in Guyana and certain other non‑Colombian assets. This portfolio represents a strategic asset within Colombia’s energy value chain and will form the backbone of Frontera’s post‑transaction business, generating an estimated 2025 distributable cash flow of approximately $77mn.
Pursuant to the agreement, GeoPark will acquire 100% of Frontera’s Colombian upstream business, which consists of all of Frontera’s oil and gas exploration and production assets in Colombia, the reverse osmosis water treatment facility (“SAARA“) and the palm oil plantation (“Proagrollanos“). Following completion of the Transaction and subject to shareholder approval, Frontera intends to distribute to shareholders approximately $370mn (CAD$7.18 per share)(1), the details of which will be communicated prior to the shareholder meeting.
The equity purchase price of $400mn represents a 25% premium to the 90-day VWAP, and a 18% premium to the current stock price of Frontera. However, the transaction involves the E&P assets alone. Including cash resources on hand plus a conservative $150mn valuation for the infrastructure business (at a 4x multiple to 2025E distributable cash flow), the implied stock price of CAD$10.67, is a premium for our shareholders in excess of 60% over Frontera’s closing stock price as of today.
| (1) Based on 69,535,349 common shares outstanding as of December 31, 2025. |
Gabriel de Alba, Chairman of the Board of Directors, commented:
“The Board and management have focused on maximizing shareholder value unlocking approximately $1.1 billion, including over $480 million through dividends and buybacks. We have also positioned the Company to unlock further value through operational, strategic and debt reduction initiatives. The Transaction represents a significant step and the culmination of this multi-year, shareholder-focused strategy to surface and monetize value in the E&P business.”
Orlando Cabrales, Chief Executive Officer (CEO), Frontera, commented:
“Following an exhaustive review of the company’s alternatives, we believe this Transaction crystallizes value for shareholders at an attractive premium for our Colombian E&P assets, converting exposure to oil prices into cash, and retaining upside through a standalone Infrastructure Business.
The additional Infrastructure Business upside will come from our interest in ODL and Puerto BahĂa as the backbone of our post‑transaction Frontera. Our Infrastructure Business already generates Distributable Cash Flow of approximately $77 million (2025E), supported by a stable dividend stream from ODL and an attractive growth profile at Puerto BahĂa, including LPG import facilities, an LNG regasification project, and containerized cargo expansion.”
TRANSACTION DETAILS
Frontera and Geopark have entered into the agreement to affect the Transaction by way of a plan of arrangement under the Business Corporations Act (British Columbia). Following completion of closing, Frontera expects to distribute the net cash proceeds from the Transaction (after transaction costs, fees and expenses) to shareholders through a return of capital. Additional details on timing and amount of the return of capital will be provided in due course.
Total cash consideration is up to $400mn, comprising:
- $375mn payable at closing, subject to customary closing adjustments, of which $75mn has been deposited by Geopark into escrow; and
- $25mn contingent payment payable upon the achievement of specified development milestones within a period of up to 12 months following the Transaction’s closing date.
Under the terms of the agreement, GeoPark will assume all the obligations under Frontera’s $310mn of outstanding 2028 unsecured notes as well as the $80mn outstanding under Frontera’s previously announced Chevron prepayment facility. The transaction implies a firm value of $622mn for the acquired assets, comprising the cash consideration and the assumption of existing debt.
The transaction has an effective date of 1 Jan. 2026, is anticipated to close in the second half of 2026 subject to customary closing conditions including, without limitation, receipt of Frontera’s Shareholder approval in accordance with applicable corporate and securities laws, approval of the plan of arrangement by the British Columbia Supreme Court and receipt of required regulatory approvals. The Transaction is not subject to any financing condition and will be funded entirely through Geopark’s existing liquidity, committed lines of financing and prepayment facilities.
The Transaction requires approval by at least 66 2/3% of the votes cast by Frontera’s shareholders present in person or represented by proxy at a special meeting of Frontera’s shareholders to be called to consider the transaction. The Frontera’s shareholder meeting is expected to be held in Apr. 2026, and further details will be provided in the near future.
Further details with respect to the arrangement and the anticipated return of capital to Frontera shareholders following the closing of the transaction will be included in the information circular to be mailed to the Frontera’s shareholders in connection with the Frontera meeting. A copy of the Agreement and the Circular will be filed on Frontera’s SEDAR+ profile and will be available for viewing in due course at www.sedarplus.ca.
FRONTERA INFRASTRUCTURE BUSINESS AND FRONTERA REMAINING ASSETS
Frontera retains full ownership of the Infrastructure Business, its interests in Guyana, and certain minor non‑Colombian assets. The Infrastructure Business will serve as the backbone of Frontera’s post‑transaction portfolio and a core asset within Colombia’s energy value chain, combining ODL’s robust and predictable cash‑flow generation with Puerto BahĂa’s pipeline of strategic growth projects, offering a differentiated value proposition in the infrastructure space.
Frontera’s Infrastructure Business includes the Company’s 35% equity interest in the Oleoducto de los Llanos Orientales S.A. (ODL) crude oil pipeline, through Frontera’s wholly owned subsidiary, Frontera Pipeline Investment AG (FPI), and the company’s 99.97% equity interest in Sociedad Portuaria Puerto Bahia. The business combines an attractive growth profile and is backed by a steady dividend stream from its investment in ODL, which combined with the Puerto Bahia Operating EBITDA has generated over $194mn in distributable cash flows since 2023, including $77mn alone in 2025.
Puerto Bahia Highlights
- Centrally located operations hub in Cartagena Bay with unrestricted draft and direct hinterland access.
- Integrated liquids and general cargo operations with vast expansion area.
- Several near-term growth projects will enhance asset value and cash flow potential including LPG import facilities, an LNG regasification project, and containerized cargo expansion.
ODL Highlights
- Key midstream asset in Colombia, transporting ~30% of Colombian oil production and serving the Llanos area holding ~70% of Colombian proven crude oil reserves.
- Stable cash generation and strong market and operating position.
- Unique position to capture additional revenue streams from its area of influence.
Below is a breakdown of Frontera’s infrastructure adjusted infrastructure EBITDA:
| Infrastructure | Equity | Frontera | ||
| Unit | EBITDA | Interest | Infrastructure Adjusted EBITDA | |
| Puerto Bahia | $MM | 15.0 | 99.97 % | 15.0 |
| ODL Pipeline | $MM | 299.8 | 35.00 % | 104.9 |
| Total | $MM | 314.8 | 119.9 | |
| Total Frontera Infrastructure Debt | $MM | 173.2 | ||
| Less: Cash and Cash Equivalents(1) | $MM | 14.5 | ||
| Net Debt | $MM | 158.6 |
| (1) Cash and Cash Equivalents refer to the portion of Frontera’s portion of Cash and Cash Equivalents from Frontera Pipeline Investment AG and Puerto Bahia’s Cash & Cash Equivalents as of December 31, 2025. |
| Frontera Infrastructure | ($ million) |
| Frontera Infrastructure Operating EBITDA(1) | 15.0 |
| Plus: ODL Dividends, net of Taxes(1) | 61.6 |
| Infrastructure Distributable Cash Flow | 76.6 |
| FPI Debt Service, net(1)(2) | (60.9) |
| Infrastructure Capex(3)(1) | (2.5) |
| Infrastructure Free Cash Flow | 13.2 |
| Net Debt to Infrastructure Distributable Cash Flow(4) | 2.1x |
| (1) | Refers to Preliminary Unaudited 2025 Financial Data |
| (2) | 2025 financing flows including cash sweep |
| (3) | Excludes Capex related to the Reficar Connection construction |
| (4) | Net Debt to Cash Flow from Operating Activities refers to Net Debt divided by Cash Flow from Operating Activities |
FINANCIAL ADVISORS AND FAIRNESS OPINION
Citi is acting as financial advisor to Frontera. BMO Nesbitt Burns Inc. was retained to provide a fairness opinion to the Frontera board of directors for a fixed fee payable upon delivery of the opinion (and not contingent on completion of the transaction). Blake Cassels & Graydon LLP are acting as legal counsel to Frontera.
After consultation with their independent financial and legal advisors, the independent members of the Frontera’s board of directors unanimously determined that the transaction is fair to and in the best interests of Frontera Energy Corporation, and unanimously recommend that shareholders approve the transaction. All officers of Frontera have also entered into support agreements under which, subject to the terms of the agreements, they have agreed to vote in favor of the transaction. In addition, the Catalyst Capital Group Inc. and Gramercy Funds Management LLC, which beneficially own approximately 41% and 12% of the company’s outstanding shares, respectively, have also entered into support agreements under which, subject to the terms of the agreements, they have agreed to vote in favor of the transaction.
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