- Recorded Net Income of $197.8 Million in Q4'22 and $286.6 Million for FY'22
- Delivered Full Year Operating EBITDA of $641.9 Million, Up 70% On Frontera's $98/Bbl Weighted Average Brent Price
- Delivered 41,382 Boe/d 2022 Average Daily Production, Up 9%
- Generated $54.3 Million of Midstream Segment Income, From Standalone and Growing Midstream Business
- Wei-1 Well Currently Ahead of Schedule and At 15,400 Feet
- Repurchased 9.6 Million Common Shares Or 20% of the Public Float, Returned More Than $91.4 Million To Shareholders in 2022 Via SIB and NCIB
- Achieved 102% of 2022 ESG Goals, Offset 52% Of Emissions Through Carbon Credits, Preserved And Restored 1,747 Hectares of Key Connectivity Corridors In Casanare And Meta, Colombia
- The Company Reiterates 2023 Production Guidance Of 40,000-43,000 Boe/d, Increased Water-Handling Capacity at Quifa and CPE-6 Key Milestones on Path to 50,000 Boe/d Future
Frontera Energy has reported financial and operational results for the fourth quarter and year ended December 31, 2022. All financial amounts in this news release are in United States dollars, unless otherwise stated.
Gabriel de Alba, Chairman of the Board of Directors, commented:
'2022 was a strong financial and operational year for Frontera. The Company delivered average daily production of 41,382 boe/d, a 9% increase compared to its 2021 production average and in-line with its increased and tightened 2022 production guidance. The Company increased full year operating EBITDA by 70% to $641.9 million, within the Company's $90-$100/bbl 2022 guidance range. The Company finished the year with a total cash position of approximately $313 million including restricted cash of $23 million.
Frontera remains committed to enhancing shareholder returns. In 2022, the Company returned over $91 million to shareholders through its NCIB and SIB programs. Since 2018, Frontera has returned more than $300 million to shareholders through dividends and share buybacks while maintaining strong credit metrics. In addition, since 2017, the Company has resolved more than $2.6 billion in contingent liabilities and commitments, permanently eliminating legacy issues.
The Company is focused on unlocking shareholder value from its upstream Colombia and Ecuador business, its standalone and growing midstream business and its potentially transformational offshore exploration program in Guyana.
In 2022, Frontera advanced the Company's exciting development and lower-risk exploration portfolio in Colombia and Ecuador and started investments in additional water-handling facilities at Quifa and CPE-6 in support of the Company's 50,000 boe/d production target.
Also in 2022, Frontera strengthened its midstream portfolio with the acquisition of the remaining 40% interest in Pipeline Investment Limited. Frontera now owns 35% of the ODL pipeline, which generated over $215 million in EBITDA in 2022. Since 2019, the Company has increased its interest in Puerto Bahia by approximately 60% to 99.8%. Frontera's interest in the ODL pipeline and in Puerto Bahia creates a unique standalone midstream business which provides shareholders with significant upside potential.
In Guyana, the Joint Venture discovered light oil and condensate at the Kawa-1 well, offshore Guyana and has successfully drilled the first prospective geologic horizons in the Upper Maastrichtian at the Wei-1 well, the Joint Venture's second exploration well in the Corentyne block, several days ahead of schedule.
Frontera's assets strong operating performance and sound balance sheet has positioned the Company to deliver its 2023 objectives and to continue generating value for shareholders by unlocking the sum of its parts.'
Orlando Cabrales, Chief Executive Officer (CEO), Frontera, commented:
'I am pleased with Frontera's 2022 operating and financial results. We delivered record production at CPE-6, which contributed to 2% quarter over quarter production growth to 41,806 boe/d and 9% year over year growth to 41,382 boe/d. The Company increased water-handling capacity at Quifa to approximately 1,550,000 bwpd at year end and we plan to grow to 2,000,000 bwpd by mid-2024 as the SAARA water treatment facility comes on-line and at CPE-6 where the Company expects to increase oil and water-handling capacity to 240,000 bwpd in 2023 and 480,000 bwpd in 2025, building the foundation to grow production to 50,000 boe/d.
The Company safely and responsibly executed $314 million in capital spending in support of its Colombia and Ecuador upstream onshore business and $104 million on its exciting Guyana offshore exploration program. I am also pleased with the Company's continued efforts to manage its cost structure. While production costs were higher year over year due to increased energy tariffs, maintenance, internal transportation costs and well services, Frontera's transportation costs and G&A were in-line with 2021. The Company also increased its operating netback by 60% to $59.78/boe, increased its net sales realized price by 40% to $82.59/boe, reduced its restricted cash position by approximately $40 million and increased its uncollateralized credit lines to $118.4 million.
In our Midstream segment, we revamped Puerto Bahia's leadership, adding expertise in the container business to drive incremental opportunities in the dry cargo terminal. For the year ended 2022, revenues from third-party liquids and general cargo through Puerto Bahia increased 41% to approximately $40 million, compared to 2021. Over 80% of Puerto Bahia's EBITDA is now generated from third parties. For 2022, the midstream business generated approximately $47 million in segment cash flow from operations.
Frontera achieved 102% of its 2022 ESG Goals, offset 52% of emissions, preserved and restored 1,747 hectares of key connectivity corridors in Casanare and Meta, Colombia and recycled 15% of its operating water and 17% of its solid waste. The Company invested approximately $4.31 million on education, inclusive economic development, and quality of life initiatives, benefiting 73,101 people through 218 social projects in Ecuador, Peru and Colombia.
Importantly, I'm pleased to confirm the Company's 2023 production guidance of 40,000-43,000 boe/d.'
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Source: Frontera Energy
