Recorded a Net Loss of $11.3 Million
Generated Operating EBITDA of $91.9 Million
Delivered 41,586 Boe/d Q1 Average Daily
Production,
41,800 Boe/d YTD Average Daily
Production,
42,500 Boe/d March and April 2023
Average Daily Production
Generated $16.9
Million of Income and Adjusted Midstream EBITDA of
$28.2 Million
From
Standalone and Growing Midstream Business
Drilled Wei-1 Well to 19,142 Feet (5,834
Metres) Measured Depth,
Encountered Oil-Bearing Intervals
Repurchased 461,200 Common Shares for
$4.2 Million Through NCIB
Recognized as One of the Most Ethical
Companies in the World
for a Third Consecutive Year by
Ethisphere
CALGARY,
AB, May 3, 2023 /PRNewswire/ - Frontera Energy
Corporation (TSX: FEC) ("Frontera" or the "Company")
today reported financial and operational results for the first
quarter ended March 31, 2023. 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:
"Frontera's first quarter results were in-line with its 2023
capital and production guidance. The Company delivered average
daily production of 41,586 boe/d, generated $91.9 million of operating EBITDA, and invested
$131.5 million in capital
expenditures.
Consistent with its strategic priorities, the Company
successfully refinanced Puerto Bahía's existing legacy project
finance debt via a new $120 million
loan facility with a group of lenders led by Macquarie Capital,
which extended the tenor of the borrowings and provided for up to
$30 million in additional funding to
pursue strategic investment opportunities within its Midstream
business. With the refinancing complete, Frontera's standalone
midstream business is fully capitalized with funding to grow.
Subsequent to the quarter, the Company designated Frontera Energy
Guyana Holding Ltd. and Frontera Energy Guyana Corp. as
unrestricted subsidiaries and released Frontera Energy Guyana Corp.
as a note guarantor for its senior bonds due 2028. The designation
is a positive forward step as the Company nears the completion of
its exploration obligations in Guyana and supports ongoing capital
discipline.
The Company remains focused on aligning its Upstream,
Midstream, and Guyana core
businesses to achieve the Company's strategic priorities and unlock
shareholder value."
Orlando Cabrales, Chief
Executive Officer (CEO), Frontera, commented:
"I'm pleased with Frontera's first quarter operational and
financial results. Despite community blockades in early February
which temporarily shut-in production at our Quifa and CPE-6
operations, the Company's first quarter production was largely
in-line with last quarter. YTD, we are delivering average daily
production of approximately 41,800 boe/d and in March and April we
averaged 42,500 boe/d. This is due to better than expected
performance from our new Cajua wells where current gross average
heavy oil production is 4,860 bopd, higher VIM-1 liquids and NGL
production, better performance at CPE-6, Coralillo 1 and 3 wells,
as well as the Tapiti-1 well.
The Company continues to focus on managing costs across the
business. Frontera's field breakeven of approximately $34 - $38/boe
ensures operational resilience even in volatile market conditions
and under varying oil price scenarios.
We expect improved profitability throughout the rest of the
year as we advance our development portfolio in Colombia and Ecuador, increase Quifa and CPE-6
water-handling infrastructure and facilities as we lay the
foundation for the Company's path to grow production to 50,000
boe/d, leverage our advantaged transportation and logistics
structure to maximize realized prices and mature our
self-sustaining and growing midstream business.
During the quarter, Frontera and its Joint Venture partner
spud the Wei-1 well and we are currently at 19,142 feet. We have
encountered oil-bearing intervals so far and are currently drilling
ahead to our planned total depth.
Importantly, during the quarter, Frontera was recognized for
a third consecutive year by Ethisphere as one of the World's Most
Ethical Companies in 2023. The Company was added to the 2023
Bloomberg Gender-Equality Index, achieved ISO certification in
Ecuador and was recognized by
Friendly Biz for our LGBT+ friendly workplace."
First Quarter 2023 Operational and Financial Summary
|
|
|
|
|
|
|
Q1
2023
|
Q4
2022
|
Q1
2021
|
|
|
|
|
|
Operational
Results
|
|
|
|
|
|
|
|
|
|
Heavy crude oil
production (1)
|
(bbl/d)
|
22,270
|
22,144
|
21,214
|
Light and medium crude
oil production (1)
|
(bbl/d)
|
16,518
|
17,073
|
17,248
|
Total crude oil
production
|
(bbl/d)
|
38,788
|
39,217
|
38,462
|
Conventional natural
gas production (1)
|
(mcf/d)
|
8,590
|
9,097
|
9,530
|
Natural
gas liquids production (1)
|
(boe/d)
|
1,291
|
993
|
966
|
Total production
(2)
|
(boe/d)
(3)
|
41,586
|
41,806
|
41,100
|
|
|
|
|
|
Inventory
Balance
|
|
|
|
|
Colombia
|
(bbl)
|
1,032,876
|
683,416
|
937,583
|
Peru
|
(bbl)
|
480,200
|
480,200
|
480,200
|
Ecuador
|
(bbl)
|
98,125
|
75,164
|
16,328
|
Total
Inventory
|
(bbl
|
1,611,201
|
1,238,780
|
1,434,111
|
|
|
|
|
|
Oil and gas sales, net
of purchases (4)
|
($/boe)
|
69.16
|
82.67
|
90.12
|
Realized (loss) on
risk management contracts (5)
|
($/boe)
|
(1.16)
|
(1.32)
|
(1.06)
|
Royalties
(5)
|
($/boe)
|
(3.36)
|
(6.04)
|
(7.58)
|
Other dilution costs
(5)
|
($/boe)
|
(0.09)
|
(0.07)
|
(0.12)
|
Net sales realized
price (4)
|
($/boe)
|
64.55
|
75.24
|
81.36
|
Production costs
(5)
|
($/boe)
|
(12.07)
|
(11.56)
|
(13.34)
|
Transportation costs
(5)
|
($/boe)
|
(11.20)
|
(10.55)
|
(9.72)
|
Operating netback per
boe (4)
|
($/boe)
|
41.28
|
53.13
|
58.30
|
|
|
|
|
|
Financial
Results
|
|
|
|
|
|
|
|
|
|
Oil and gas sales, net
of purchases (6)
|
($M)
|
189,376
|
261,059
|
228,826
|
Realized (loss) on
risk management contracts
|
($M)
|
(3,175)
|
(4,182)
|
(2,682)
|
Royalties
|
($M)
|
(9,213)
|
(19,076)
|
(19,244)
|
Other dilution
costs
|
($M)
|
(256)
|
(235)
|
(298)
|
Net sales
(6)
|
($M)
|
176,732
|
237,566
|
206,602
|
Net income (loss)
(7)
|
($M)
|
(11,330)
|
197,796
|
102,228
|
Per share –
basic
|
($)
|
(0.13)
|
2.29
|
1.08
|
Per share –
diluted
|
($)
|
(0.13)
|
2.25
|
1.05
|
General and
administrative
|
($M)
|
12,669
|
12,761
|
14,656
|
Outstanding Common
Shares
|
Number of
Shares
|
85,188,573
|
85,592,075
|
94,070,294
|
Operating EBITDA
(6)
|
($M)
|
91,922
|
144,994
|
132,998
|
Cash provided by
operating activities
|
($M)
|
845
|
138,312
|
114,748
|
Capital expenditures
(6)
|
($M)
|
131,452
|
134,165
|
113,545
|
Cash and cash
equivalents - unrestricted
|
($M)
|
162,272
|
289,845
|
257,373
|
Restricted cash short
and long-term (8)
|
($M)
|
30,877
|
23,202
|
66,146
|
Total cash
(8)
|
($M)
|
193,149
|
313,047
|
323,519
|
Total debt and lease
liabilities (8)
|
($M)
|
519,471
|
511,552
|
558,281
|
Consolidated total
indebtedness (Excl. Unrestricted Subsidiaries)
(9)
|
($M)
|
400,361
|
407,808
|
410,161
|
Net Debt (Excl.
Unrestricted Subsidiaries) (9)
|
($M)
|
279,843
|
178,534
|
199,303
|
1. References to heavy
crude oil, light and medium crude oil combined, conventional
natural gas and natural gas liquids in the above table and
elsewhere in this news release refer to the heavy crude oil, light
and medium crude oil combined, conventional natural gas and natural
gas liquids, respectively, product types as defined in National
Instrument 51-101 - Standards of Disclosure for Oil and Gas
Activities ("NI 51-101").
|
2. Represents W.I.
production before royalties. Refer to the "Further Disclosures"
section.
|
3. Boe has been
expressed using the 5.7 to 1 Mcf/bbl conversion standard required
by the Colombian Ministry of Mines & Energy. Refer to the
"Further Disclosures - Boe Conversion" section.
|
4. Non-IFRS ratio
(equivalent to a "non-GAAP ratio", as defined in National
Instrument 52-112 - Non-GAAP and Other Financial Measures
Disclosure ("NI 52-112" ). Refer to the "Non-IFRS and
Other Financial Measures'' section.
|
5. Supplementary
financial measure (as defined in NI 52-112). Refer to the "Non-IFRS
and Other Financial Measures'' section.
|
6. Non-IFRS financial
measure (equivalent to a "non-GAAP financial measure", as defined
in NI 52-112). Refer to the "Non-IFRS and Other Financial
Measures'' section.
|
7. Net (loss) income
attributable to equity holders of the Company.
|
8. Capital management
measure (as defined in NI 52-112). Refer to the "Non-IFRS and Other
Financial Measures'' section.
|
9. "Unrestricted
Subsidiaries" as of March 31, 2023, include CGX Energy Inc.
("CGX"), listed on the TSX Venture Exchange under the
trading symbol "OYL", Frontera ODL Holding Corp., including its
subsidiary Pipeline Investment Ltd. ("PIL"), Frontera BIC
Holding Ltd., and Frontera Bahía Holding Ltd. ("Frontera
Bahia"), including its subsidiary Sociedad Portuaria Puerto
Bahia S.A ("Puerto Bahia"). On April 11, 2023, Frontera
Energy Guyana Holding Ltd. and Frontera Energy Guyana Corp. were
designated as unrestricted subsidiaries. Refer to the "Liquidity
and Capital Resources" section on page 23 of the
PMD&A.
|
First Quarter 2023 Operational and Financial Results:
- The Company recorded a net loss of $11.3
million or $0.13/share in the
first quarter of 2023, compared with net income of $197.8 million or $2.29/share in the prior quarter and net income
of $102.2 million or $1.08/share in the first quarter of 2022. The
Company's first quarter net loss included an operating loss of
$2.7 million (including $30.3 million in impairment, exploration
expenses, and other costs), finance expenses of $15.2 million, foreign exchange loss of
$11.8 million, and income tax expense
$7.5 million partially offset by
$13.6 million of share of income from
associates and finance income of $4.3
million.
- Production averaged 41,586 boe/d in the first quarter of 2023,
compared to 41,806 boe/d in the prior quarter and 41,100 boe/d in
the first quarter of 2022. See the table above for production by
product type for the prior quarter and first quarter of 2022. First
quarter production was impacted by temporary production shut-ins at
the Company's Quifa and CPE-6 blocks in early February due to road
blockades in the municipality of Puerto
Gaitan, Meta Department, Colombia. Year to date to May 1, 2023 Frontera has averaged approximately
41,800 boe/d (consisting of 22,600 bbl/d of heavy crude oil, 16,500
bbl/d of light and medium crude oil, 8,500 mcf/d of conventional
natural gas and 1,200 boe/d of natural gas liquids). In March and
April 2023, Frontera averaged
approximately 42,500 boe/d consisting of consisting of 23,300 bbl/d
of heavy crude oil, 16,500 bbl/d of light and medium crude oil,
8,500 mcf/d of conventional natural gas and 1,200 boe/d of natural
gas liquids).
- Operating EBITDA was $91.9
million in the first quarter of 2023 compared with
$145.0 million in the prior quarter
and $133.0 million in the first
quarter of 2022. The decrease in operating EBITDA
quarter-over-quarter was primarily a result of lower commodity
prices and lower sales volumes.
- Cash provided by operating activities in the first quarter of
2023 was $0.8 million, compared with
$138.3 million in the prior quarter
and $114.7 million in the first
quarter of 2022. The decrease in cash provided by operating
activities quarter-over-quarter was primarily due to lower Brent
benchmark oil prices and fluctuations in working capital.
- The Company reported a total cash position of $193.1 million at March
31, 2023, compared to $313.0
million at December 31, 2022
and $323.5 million at March 31, 2022. During the quarter, the Company
invested $131.5 million in capital
expenditures including $75.7 million
in capital expenditures related to Guyana, $3.5
million in debt service payments and $4.2 million in share buybacks. In addition, the
company obtained net proceeds from the PIL Loan Facility of
$114.9, which was used to fully repay
the 2025 Puerto Bahia Debt.
- The Company's restricted cash position was $30.9 million at March 31,
2023 compared to $23.2 million
at December 31, 2022 and $66.1 million in the first quarter of 2022. The
increase in the Company's restricted cash position was primarily
due to funding a Debt Reserve Account related to the new PIL loan
facility.
- As at March 31, 2023, the Company
had a total inventory balance of 1,611,201 bbls compared to
1,238,780 bbls at December 31, 2022
and 1,434,111 bbls at March 31, 2022.
The Company actively manages its volumes, ending the quarter with
more than 370,000 bbls of increased inventory balance in the first
quarter compared to the prior quarter, which was subsequently sold
in the second quarter of 2023.
- Capital expenditures were approximately $131.5 million in the first quarter of 2023,
compared with $134.2 million in the
prior quarter and $113.5 million in
the first quarter of 2022. Capital expenditures in the first
quarter included $75.3 million on the
Wei-1 well offshore Guyana,
$32 million on development drilling
in the Quifa, Cajua, CPE-6 and Cubiro blocks, $12.4 million on exploration activities in
Colombia and Ecuador and $8.6
million on development facilities including construction of
a storage tank in the CPE-6 block and the expansion of fluid
transfer and the interconnection of fields in the Quifa block.
- The Company's net sales realized price was $64.55/boe in the first quarter of 2023, compared
to $75.24/boe in the prior quarter
and $81.36/boe in the first quarter
of 2022. The decrease in the Company's net sales realized price
quarter-over-quarter was primarily driven by the decrease in the
Brent benchmark oil price and higher differential prices, partially
offset by lower royalties.
- The Company's operating netback was $41.28/boe in the first quarter of 2023, compared
with $53.13/boe in the prior quarter
and $58.30/boe in the first quarter
of 2022. The decrease in operating netback quarter-over-quarter was
primarily due to lower net sales realized price as a result of
lower average Brent benchmark oil prices, higher differentials and
incremental increases in transportation costs.
- Production costs averaged $12.07/boe, within the Company's 2023 guidance
range, in the first quarter of 2023 compared with $11.56/boe in the prior quarter and $13.34/boe in the first quarter of 2022. The
increase in production costs quarter-over-quarter was primarily as
a result of inflationary pressures and increased tariffs on
products and services.
- Transportation costs averaged $11.20/boe, within the Company's 2023 guidance
range, in the first quarter of 2023 compared with $10.55/boe in the prior quarter and $9.72/boe in the first quarter of 2022. The
increase in transportation costs quarter-over-quarter was mainly
due to additional volumes transported and increased trucking
tariffs for 2023.
- The Company recorded a realized loss on risk management
contracts of approximately $3.2
million in the first quarter of 2023 compared to a realized
loss of approximately $4.2 million in
the prior quarter and a loss of $2.7
million in the first quarter of 2022. The realized loss on
risk management contracts in the first quarter of 2023 was
primarily a result of cash paid for premiums related to put options
settled during the period. See the Hedging section below for more
information.
- The Company has various uncommitted bilateral credit lines. As
of March 31, 2023, the Company had
increased its uncollateralized credit lines to $125.3 million, an increase of $6.9 million compared to December 31, 2022.
Continuing Progress On Frontera's ESG Strategy
On March 13, 2023 Frontera was
recognized for a third straight year by Ethisphere, a global leader
in defining and advancing the standards of ethical business
practices, as one of the 2023 World's Most Ethical Companies. In
2023, 135 honourees were recognized spanning 19 countries and 48
industries. Frontera was one of only two honourees in the oil and
gas industry.
On January 31, 2023 Frontera was
included in the 2023 Bloomberg Gender-Equality Index
("GEI"), a modified market capitalization-weighted index
developed to gauge the performance of public companies dedicated to
reporting gender-related data. This reference index measures gender
equality across five pillars: leadership & talent pipeline,
equal pay & gender pay parity, inclusive culture, anti-sexual
harassment policies, and external brand.
Frontera was also recognized in the first quarter as a Top 20
Best Places to Work in Colombia by
the Great Place to Work® Institute ("GPTW") and achieved ISO
certification for its operations in Ecuador and its recognition for operations
safety.
Enhancing Shareholder Return
Frontera remains committed to enhancing shareholder returns. As
part of its 2023 plan, the Company strives to unlock shareholder
value from its upstream Colombia
and Ecuador business, its
standalone and growing midstream business and its potentially
transformational offshore exploration program in Guyana
During the first quarter of 2023, under the Company's NCIB which
expired on March 16, 2023, Frontera
repurchased approximately 0.5 million of the Company's common
shares ("Common Shares") for cancellation for approximately
$4.1 million. In total, the Company
repurchased 4.3 million Common Shares (or approximately 89% of its
shares outstanding).
Consistent with its strategic priorities, the Company
successfully refinanced Puerto Bahía's existing legacy project
finance debt, via a new $120 million
loan facility with a group of lenders led by Macquarie Capital,
which extended the tenor of the borrowings and provided for up to
$30 million in additional funding to
pursue strategic investment opportunities within its Midstream
business. With the refinancing complete, Frontera's standalone
midstream business is fully capitalized with funding to grow.
Subsequent to the quarter, the Company designated Frontera
Energy Guyana Holding Ltd. and Frontera Energy Guyana Corp. as
unrestricted subsidiaries and released Frontera Energy Guyana Corp.
as a note guarantor for its senior bonds due 2028. The designation
is a positive forward step as the Company nears the completion of
its exploration obligations in Guyana and will ensure future capital
discipline.
Frontera's Three Core Businesses
Frontera has three core businesses: (1) its Colombia and Ecuador Upstream Onshore
business, (2) its standalone and growing Colombia Midstream
business, and (3) its potentially transformational Guyana
Exploration business offshore Guyana.
The Company is focused on unlocking shareholder value from its
business and is committed to providing greater clarity and insight
through its various disclosures including quarterly results press
releases such as this one.
1. Colombia and Ecuador
Upstream Onshore
During the quarter, Frontera produced 40,581 boe/d from its
Colombian operations (consisting of 22,270 bbl/d of heavy crude
oil, 15,513 bbl/d of light and medium crude oil, 8,590 mcf/d of
conventional natural gas and 1,291 boe/d of natural gas liquids).
The Company continued to diversify its production mix in the first
quarter of 2023, increasing natural gas liquids production to 1,291
boe/d, up 30% compared to 993 boe/d in the prior quarter and 966 in
the first quarter of 2022.
In the first quarter of 2023, the Company drilled 17 development
wells at Quifa, Cajua, CPE-6 and Cubiro blocks. This compares to 17
development wells in the prior quarter. In 2023, the Company
intends to drill 55 gross development wells.
Currently, the Company has 5 drilling rigs and 2 workover rigs
active at its Quifa, CPE-6, Cubiro and Corcel/Guatiquia blocks in
Colombia.
Quifa and Cajua
Production from the Quifa and Cajua blocks averaged
approximately 16,829 bbl/d of heavy crude in the first quarter of
2023 compared to approximately 16,470 bbl/d of heavy crude oil in
the fourth quarter of 2022. The Company drilled 12 production wells
(seven wells at Quifa and five wells at Cajua) on the blocks in the
first quarter of 2023. During the quarter, the Company also
expanded fluid transfer and the interconnection of fields in the
Quifa block.
Increasing water handling capacity at Quifa is key to Frontera's
efforts to grow production at Quifa. The Company's current water
handling capacity is approximately 1.5 million bwpd. In 2023,
Frontera began commissioning SAARA (previously Agrocascada), its
reverse osmosis water treatment facility. As of April 2023, the plant has already processed 1.5
million barrels of water as part of its commissioning program,
providing irrigation source water to the Company's nearby
ProAgrollanos palm oil plantation.
At Cajua, the Company drilled five horizontal wells in the first
quarter which increased gross average production to 3,873 bopd of
heavy crude in March compared to 2,226 bopd in December 2022. Current gross average production
at Cajua is 4,860 bopd.
CPE-6
At CPE-6, production averaged approximately 4,850 bbl/d of heavy
crude oil in the first quarter 2023 compared with approximately
5,214 bbl/d in the fourth quarter of 2022. First quarter production
was impacted by temporary production shut-ins at the Company's
Quifa and CPE-6 blocks in early February due to road blockades in
the municipality of Puerto Gaitan,
Meta Department, Colombia. During
the quarter, the Company drilled four production wells and
constructed an additional storage tank which will increase on-site
storage capacity to 20,000 bbls.
Guatiquía
At Guatiquia, production averaged approximately 7,333 bbl/d of
light and medium crude oil in the first quarter of 2023 compared
with approximately 7,941 bbl/d in the fourth quarter of 2022. The
Company completed a workover of the Coralillo 3 well in February,
increasing production by 500 bbl/d and supporting additional
opportunities for potential production growth from existing wells
and new wells in the area.
Cubiro
During the quarter, the Company drilled three producing wells
(two horizontal and one vertical) in the Cubiro block (Copa 36H,
Copa 32H and Copa K Norte 1), increasing production by 360 bopd of
39° API light oil to 2,145 bbl/d in the first quarter of 2023,
successfully implementing new solids control technology in the
completion of the horizontal sections of the wells.
VIM-1
At VIM-1 (Frontera 50% W.I., non operator), production averaged
1,675 bbl/d of light and medium crude oil in the first quarter of
2023 compared to approximately 1,370 bbl/d of light and medium
crude oil in the fourth quarter of 2022. During the quarter, the
operator successfully began gas reinjection, increasing liquids
production to approximately 4,000 bbl/d.
VIM-22
At VIM-22, the Chimi-1 and Winner-1 wells were spudded on
February 16, 2023 and March 30, 2023 respectively. Non-commercial gas
was found in the Tubara Formation, however interpretation of
logging while drilling logs and integration with drilling data
concluded that the wells did not contain commercial net hydrocarbon
pay. The wells were subsequently plugged and abandoned. Also during
the quarter, the Company completed civil works for the Tubara Sur-1
exploratory well. During the three months ended March 31, 2023, the Company recorded an
impairment charge of exploration and evaluation assets in
Colombia of $15.2 million as a result of the Company's
decision to proceed with steps to relinquish the VIM-22 block,
which remains subject to approval by the Agencia Nacional de
Hidrocarburos ("ANH").
VIM-46
At VIM-46, the Company has begun pre-seismic and pre-drilling
activities to the environmental management plan in advance of
completing a 100 km2 3D seismic acquisition program.
Socialization and land permitting is expected to commence in
August 2023.
Llanos 99
At Llanos 99, the Company successfully completed the acquisition
of 165 km2 of 3D seismic, without security or social
issues between the end of February and the end of April 2023. The Company is currently completing
the restoration phase of the operation. Social and administrative
closure is anticipated to be completed in the second quarter of
2023. The Company is also advancing consultation activities and an
environmental impact study as part of the environmental permitting
process for future exploration drilling.
Llanos 119
At Llanos 119, Frontera has begun pre-seismic activities related
to the environmental management plan in advance of completing an 80
km2 seismic acquisition program. Socialization and land
permitting is expected to commence in August
2023. Pre-drilling activities including land permitting,
civil work designs and goods and services contracting procedures
are underway in advance of civil works activities which are
expected to begin in December 2023
for the Solopiña Norte-1 well.
Ecuador
In Ecuador, first quarter 2023
gross production averaged approximately 2,010 bbl/d of light and
medium crude oil, compared to approximately 2,492 bbl/d in the
fourth quarter of 2022. Frontera's share of production in
Ecuador for the three months ended
March 31, 2023 was 1,005 bbl/d of
medium crude oil compared to 1,246 bbl/d in the prior quarter.
At the Perico block (Frontera 50% W.I. and operator), the
Company has drilled three out of four exploration commitment wells
(Jandaya-1, Tui-1 and Yin-1 exploration wells), which are currently
on long-term test as the Company completes environmental impact
assessments in advance of obtaining production environmental
licenses. Pre-drilling activities for the Yin Sur-1 exploratory
well is underway, which the Company expects to drill in the third
quarter of 2023.
At the Espejo block (Frontera 50% W.I. and non-operator), the
operator has drilled two out of four commitment wells (Pashuri-1
and Caracara-1 exploration wells), where preliminary logging
information from both wells indicates the presence of hydrocarbons.
The Pashuri-1 well has been producing from U sandstone since
November 2022. Current production is
305 bopd with 38.5% watercut at stable conditions. Further analysis
is being carried out and the operator is currently interpreting a
new 3D seismic survey data to define the location of the third
exploratory commitment well.
Peru
During the three months ended March 31,
2023, the Company recognized an asset retirement obligation
expense resulting from the acquisition of the remaining 51% working
interest ("W.I"). in Block Z1 in Peru from BPZ Resources Inc.
Subsequent to the quarter, the Company reached an agreement to
finalize the sale of Frontera Energy OffShore Perú, the 100%
consolidated entity that owns the 100% W.I. in Block Z1, for a
payment of $10 million to a third
party, subject to completion of certain conditions precedent. As a
result of this transaction, the Company expects to no longer
recognize any asset retirement obligation related to Block Z1 and
to generate a $35.8 million asset
retirement obligation recovery once the agreement is finalized.
2. Midstream Colombia
Frontera has investments in certain infrastructure and midstream
assets, including storage, port and other facilities in
Colombia and the Company's
investments in pipelines ("Midstream Colombia Segment").
The Midstream Colombia Segment principally includes a 35% equity
interest in the Oleoducto de los Llanos Orientales S.A.
("ODL") pipeline through Frontera's wholly-owned subsidiary,
Pipeline Investment Limited ("PIL") and the Company's 99.80%
interest in Puerto Bahia.
About ODL and Puerto
Bahia
The ODL pipeline is a 260-kilometre, 24-inch pipeline with
throughput capacity of 300,000 bbl/d at 18° API that transports
Frontera's heavy crude oil from the Quifa SW and Cajua fields and
part of the CPE-6 field, as well as other third-party production
from the Llanos basin, including from Ecopetrol, Hocol, Geopark and
Parex, and connects the OCENSA pipeline at Cusiana and Monterrey to
the export terminal in Coveñas. Ecopetrol's Cenit Transporte y
Logística de Hidrocarburos S.A.S. owns the remaining 65% of
ODL.
Puerto Bahia is a
state-of-the-art liquids and dry cargo facility port terminal
strategically located on a 155-hectare site in the Bay of
Cartagena.
Midstream Colombia Segment Results
|
March
31
|
($M)
|
2023
|
2022
|
Revenue
|
11,146
|
10,332
|
FEC liquids port
facility
|
1,664
|
1,452
|
Third party liquids
port facility
|
5,832
|
5,358
|
General
Cargo
|
3,650
|
3,522
|
Cost
|
(5,117)
|
(4,679)
|
General administrative
expenses
|
(1,342)
|
(1,671)
|
Depletion, depreciation
and amortization
|
(1,232)
|
(1,476)
|
Restructuring,
severance and other costs
|
(103)
|
(174)
|
Puerto Bahia Income
from operations
|
3,352
|
2,332
|
Share of income from
associates - ODL
|
13,572
|
9,094
|
Segment
income
|
16,924
|
11,426
|
Segment cash flow from
operations activities
|
7,608
|
17,024
|
The Company's Midstream Colombia Segment income increased
$5.5 million for the three months
ended March 31, 2023 to $16.9 million, compared with $11.4 million in the same period of 2022. For the
three months ended March 31, 2023,
the Puerto Bahia liquids terminal revenues increased by 10%
compared with the same period of 2022. The liquids terminal
revenues during the first quarter of 2023 and 2022, correspond to
67% and 66% of total revenues, respectively. General cargo terminal
revenues increased by 4% compared with the same period in 2022, due
to higher volumes of breakbulk cargo.
Cash provided by operating activities of the Midstream Colombia
Segment for three months ended March 31,
2023 was $7.6 million compared
to $17.0 million in the same period
of 2022, the reduction is mainly due to $9.0
million of dividends collected during first quarter of 2022,
while $18.2 million of dividends were
collected following the quarter end, in April 2023.
|
Three months
ended
March
31
|
($M)
|
2023
|
2022
|
Adjusted Midstream
Revenue(1)
|
38,231
|
23,003
|
Adjusted Midstream
Operating Cost(1)
|
(7,741)
|
(6,296)
|
Adjusted Midstream
General and administrative(1)
|
(2,314)
|
(2,312)
|
Adjusted Midstream
EBITDA
|
28,177
|
14,395
|
|
1. Non-IFRS
financial measure (equivalent to a "non-GAAP financial measure", as
defined in NI 52-112). Refer to the "Non-IFRS and Other Financial
Measures'' section.
|
The Adjusted Midstream EBITDA for the first quarter of 2023 was
$28.2 million compared to
$14.4 million in the same period of
2022, with the increase a result of the Company's increased
indirect ownership interest in ODL from 59.93% to 100% as of
September 2022, higher volumes
transported at the pipeline facility and handled at the liquids
terminal facility.
For additional information regarding the Company's Midstream
segment please refer to the Company's MD&A.
Puerto Bahia
Puerto Bahía continues to streamline its cost structure, and
increased its operating margin to 30% in the three months ended
March 31, 2023, from 23% in the same
period of 2022. This cost reduction is the result of the
implementation of efficiency initiatives such as an optimized
tariff model for logistic operators, the substitution of hired
services for in-house solutions, and the negotiation of contracts
with suppliers.
In the first quarter of 2023, the roll-on roll-out business
continued to increase its market share by capturing new car brands
and by entering the transshipment business. As a result, total
roll-on roll-out units increased by 25% in the first quarter of
2023, when compared with the same period in 2022. In the liquids
terminal, revenues increased by 10% in the first quarter of 2023,
when compared with the same period in 2022, driven by increased
throughput volumes.
Puerto Bahia has an $8 million capital program for 2023, up from
$1.5 million in 2022, which is
focused on port infrastructure and acquiring the necessary
equipment to capture mature business opportunities. In addition,
Puerto Bahia is strengthening its
project and engineering team to expand its execution capabilities,
while also advancing the necessary permits and licensing for the
new business operations, which includes the expansion of the port
utilized area.
3. Guyana Exploration
On January 23, 2023 Frontera and
CGX, joint venture partners (the "Joint Venture") in the
Petroleum Prospecting License for the Corentyne block offshore
Guyana (the "License"),
announced the spud of the Wei-1 well (the "Well"), on the
Corentyne block, approximately 200 kilometres offshore from
Georgetown, Guyana. The Well, planned to be drilled to a
total depth of 20,500 feet, to date has been successfully drilled
to a depth of 19,142 feet (5,834 metres). The Wei-1 well is located
approximately 14 kilometres northwest of the Joint Venture's
previous Kawa-1 light oil and condensate discovery.
The Well has encountered oil-bearing intervals in the western
channel fan complex of the northern portion of the Corentyne block
in formations of Maastrichtian and Campanian ages. A comprehensive
logging campaign in the Maastrichtian and Campanian intervals
indicated the presence of oil, confirmed by downhole analysis.
Logging while drilling (LWD) and cuttings indicate the presence of
hydrocarbons in the upper portion of the Santonian; fluid samples
have not yet been fully obtained. Side-wall core samples will be
attempted in the Santonian interval when drilling resumes.
Preliminary indications from the secondary targets in the
Maastrichtian and Campanian are positive, however no assurance can
be given that these activities will ultimately produce hydrocarbons
in commercial quantities.
While performing additional well logging and data acquisition
operations, a wireline fluid sampling tool became stuck in the Well
and was not recovered. An open hole sidetrack will begin shortly
from below the last casing point and will progress to the planned
total depth. The Joint Venture expects to complete Wei-1 operations
within the original 4-5 month timeframe as announced on
January 23, 2023.
The Joint Venture has updated its Well total cost estimates to
$175-$190
million to successfully reach the target total depth, and
complete its drilling program. The increase in cost includes the
delays associated with the late arrival of the rig, costs
associated with fishing and sidetrack operations and associated
post well evaluations.
During the three months ended March 31,
2023, Guyana exploration
and infrastructure expenditures were $75.3
million compared to $53.5
million during the same period of 2022.
Hedging Update
As part of its risk management strategy, Frontera uses
derivative commodity instruments to manage exposure to price
volatility by hedging a portion of its oil production. Consistent
with this strategy, the Company entered into new put hedges
totaling 1,275,000 bbls to protect a portion of the Company's
production through June 2023. The
following table summarizes Frontera's 2023 hedging position as of
May 3, 2023.
Term
|
Type
of
Instrument
|
Open
Positions
(bbl/d)
|
Strike
Prices
Put/
Call
|
April
|
Put
|
14,333
|
70
|
May
|
Put
|
13,871
|
70
|
June
|
Put
|
13,833
|
70
|
2Q-2023
|
Total
Average
|
14,011
|
|
Frontera Energy Provides Notice of First Quarter 2023 Financial
Results Conference Call
A conference call for investors and analysts will be held on
Thursday, May 4, 2023 at 11:00 a.m. Eastern Time. Participants will
include Gabriel de Alba, Chairman of
the Board of Directors, Orlando
Cabrales, Chief Executive Officer, René Burgos, Chief
Financial Officer and other members of the senior management
team.
Analysts and investors are invited to participate using the
following dial-in numbers:
Participant Number (Toll Free North
America):
1-888-664-6383
Participant Number (Toll Free
Colombia):
01-800-518-4036
Participant Number (International):
1-416-764-8650
Conference ID:
49513969
Webcast
Audio:
www.fronteraenergy.ca
A replay of the conference call will be available until
11:59 p.m. Eastern Time on
May 11, 2023.
Encore Toll free Dial-in Number:
1-888-390-0541
International Dial-in Number:
1-416-764-8677
Encore
ID:
513969
About Frontera:
Frontera Energy Corporation is a Canadian public company
involved in the exploration, development, production,
transportation, storage and sale of oil and natural gas in
South America, including related
investments in both upstream and midstream facilities. The Company
has a diversified portfolio of assets with interests in 31
exploration and production blocks in Colombia, Ecuador and Guyana, and pipeline and port facilities in
Colombia. Frontera is committed to
conducting business safely and in a socially, environmentally and
ethically responsible manner.
If you would like to receive news releases via email as soon as
they are published, please subscribe here:
http://fronteraenergy.mediaroom.com/subscribe.
Advisories:
Cautionary Note Concerning Forward-Looking
Statements
This news release contains forward-looking information within
the meaning of Canadian securities laws. Forward-looking
information relates to activities, events or developments that the
Company believes, expects or anticipates will or may occur in the
future. Forward-looking information in this news release includes,
without limitation, statements regarding the Company's continued
commitment to aligning its Upstream, Midstream and Guyana core businesses to achieve its
strategic priorities and unlock shareholder value; statements
relating to the Company's guidance and objectives for 2023,
including its expectations regarding improved profitability
throughout the remainder of 2023; statements regarding the
Company's continued focus on managing costs and its field breakeven
figures; statements regarding the Company's path to a 50,000 boe/d
future; expectations regarding expected impacts of the Company's
reverse osmosis water treatment facility (SAARA - previously
Agrocascada) and increased water handling capacity at Quifa;
anticipated exploration, development and drilling activities and
seismic acquisition expectations regarding drilling of the Wei-1
well on the Corentyne block, including project evolution, drilling
objectives, timelines, target zones and anticipated cost estimates
for the Wei-1 well, statements regarding preliminary Wei-1 well
results date and additional analysis being conducted on well data.
statements regarding the anticipated sale of Frontera Energy
OffShore Perú, the 100% consolidated entity that owns the 100% W.I.
in Block Z1 and the resulting impacts therefrom; and expectations
with respect to the Company's hedging strategy. All information
other than historical fact is forward-looking information.
Forward-looking information reflects the current
expectations, assumptions and beliefs of the Company based on
information currently available to it and considers the Company's
experience and its perception of historical trends, including
expectations and assumptions relating to commodity prices and
interest and foreign exchange rates; the current and expected
impacts of the COVID-19 pandemic, actions of the Organization of
Petroleum Exporting Countries ("OPEC+") and the impact of
the Russia-Ukraine conflict, and the expected impact of
measures that the Company has taken and continues to take in
response to these events; expectations regarding the Company's
ability to manage its liquidity and capital structure and generate
sufficient cash to support operations, capital expenditures and
financial commitments; the performance of assets and equipment; the
Company's ability to achieve the increased oil and water handling
capacity at Quifa in the time frames indicated; the availability
and cost of labour, services and infrastructure; the execution of
exploration and development projects; the receipt of any required
regulatory approvals and outcome of discussions with governmental
authorities; the success of the Company's hedging strategy; and the
impact and success of the Company's ESG strategies.
Although the Company believes that the assumptions inherent
in the forward-looking information are reasonable, forward-looking
information is not a guarantee of future performance and
accordingly undue reliance should not be placed on such
information. Forward-looking information is subject to a number of
risks and uncertainties, some that are similar to other oil and gas
companies and some that are unique to the Company. The actual
results may differ materially from those expressed or implied by
the forward-looking information, and even if such actual results
are realized or substantially realized, there can be no assurance
that they will have the expected consequences to, or effects on,
the Company. The Company's annual information form dated
March 1, 2023, its annual
management's discussion and analysis for the year ended
December 31, 2022, and other
documents it files from time to time with securities regulatory
authorities describe the risks, uncertainties, material assumptions
and other factors that could influence actual results and such
factors are incorporated herein by reference. Copies of these
documents are available without charge by referring to the
company's profile on SEDAR at www.sedar.com. All forward-looking
information speaks only as of the date on which it is made and,
except as may be required by applicable securities laws, the
Company disclaims any intent or obligation to update any
forward-looking information, whether as a result of new
information, future events or results or otherwise.
Non-IFRS Financial and Other Measures
This news release contains various "non-IFRS financial
measures" (equivalent to "non-GAAP financial measures", as such
term is defined in NI 52-112), "non-IFRS ratios" (equivalent to
"non-GAAP ratios", as such term is defined in NI 52-112),
"supplementary financial measures" (as such term is defined in NI
52-112), and "capital management measures" (as such term is defined
in NI 52-112), which are described in further detail below. Such
financial measures do not have standardized IFRS definitions. The
Company's determination of these financial measures may differ from
other reporting issuers and they are therefore unlikely to be
comparable to similar measures presented by other companies.
Furthermore, these financial measures should not be considered in
isolation or as a substitute for measures of performance or cash
flows as prepared in accordance with IFRS. These financial measures
do not replace or supersede any standardized measure under IFRS.
Other companies in our industry may calculate these financial
measures differently than we do, limiting their usefulness as
comparative measures. The Company discloses these financial
measures, together with measures prepared in accordance with IFRS,
because management believes they provide useful information to
investors and shareholders, as management uses them to evaluate the
operating performance of the Company. These financial measures
highlight trends in the Company's core business that may not
otherwise be apparent when relying solely on IFRS financial
measures. Further, management also uses non-IFRS measures to
exclude the impact of certain expenses and income that management
does not believe reflect the Company's underlying operating
performance. The Company's management also uses non-IFRS measures
in order to facilitate operating performance comparisons from
period to period and to prepare annual operating budgets and as a
measure of the Company's ability to finance its ongoing operations
and obligations.
Set forth below is a description of the non-IFRS financial
measures, non-IFRS ratios, supplementary financial measures and
capital management measures used in this news release.
Operating EBITDA
EBITDA is a commonly used measure that adjusts net income
(loss) as reported under IFRS to exclude the effects of income
taxes, finance income and expenses, and depletion, depreciation and
amortization expense. Operating EBITDA is a non-IFRS financial
measure that represents the operating results of the Company's
primary business, excluding the following items: restructuring,
severance and other costs, post-termination obligation and payments
of minimum work commitments and certain non-cash items (such as
impairments, foreign exchange, unrealized risk management contracts
and share-based compensation) and gains or losses arising from the
disposal of capital assets. In addition, other unusual or
non-recurring items are excluded from operating EBITDA, as they are
not indicative of the underlying core operating performance of the
Company. Since the three and six months ended June 30, 2022, the Company changed the
composition of its Operating EBITDA calculation to exclude certain
unusual or non-recurring items as post-termination obligations and
payments of minimum work commitments, which could distort future
projections as they are not considered part of the Company's normal
course of operations.
A reconciliation of net income to operating EBITDA is as
follows:
|
Three Months
Ended
March
31
|
($M)
|
2023
|
2022
|
|
|
|
|
|
Net income
|
(11,330)
|
102,228
|
|
Finance
Income
|
(4,301)
|
(607)
|
|
Finance
expenses
|
15,221
|
12,235
|
|
Income tax expense
(recovery)
|
7,520
|
(12,751)
|
|
Depletion, depreciation
and amortization
|
66,713
|
38,784
|
|
Expense of impairment,
recovery of asset retirement obligation and others
|
29,896
|
(4,429)
|
|
Post-termination
obligation
|
157
|
228
|
|
Shared-based
compensation non-cash portion
|
(499)
|
5,088
|
|
Restructuring,
severance and other costs
|
1,572
|
331
|
|
Share of income from
associates
|
(13,572)
|
(9,094)
|
|
Foreign exchange loss
(income)
|
11,760
|
(3,642)
|
|
Other (income)
loss
|
(6,305)
|
6,019
|
|
Unrealized gain on risk
management contracts
|
(4,825)
|
(1,144)
|
|
Non-controlling
interests
|
(85)
|
(248)
|
|
Operating
EBITDA
|
91,922
|
132,998
|
|
Capital Expenditures
Capital expenditures is a non-IFRS financial measure that
reflects the cash and non cash items used by a company to invest in
capital assets. This financial measure considers oil and gas
properties, plant and equipment, infrastructure, exploration and
evaluation assets expenditures. Refer to the reconciliation in the
"Capital Expenditures" section on page 21 of the MD&A.
Operating Netback and Oil and Gas Sales, Net of
Purchases
Operating netback is a non-IFRS financial measure and
operating netback per boe is a non-IFRS ratio. Operating netback is
used to assess the net margin of the Company's production after
subtracting all costs associated with bringing one barrel of oil to
the market. It is also commonly used by the oil and gas industry to
analyze financial and operating performance expressed as profit per
barrel and is an indicator of how efficient the Company is at
extracting and selling its product. For netback purposes, the
Company removes the effects of any trading activities and results
from its midstream segment from the per barrel metrics. Refer to
the reconciliation in the "Operating Netback" section on page 7 of
the MD&A. Refer to the "Operating Netback and Oil and Gas
Sales, Net of Purchases" section on pages 20 and 21 of the MD&A
for a description of each component of the Company's operating
netback and how it is calculated. Oil and gas sales, net of
purchases, is a non-IFRS ratio that is calculated using oil and gas
sales less the cost of volumes purchased from third parties
including its transportation and refining cost, divided by the
total sales volumes from D&P assets, net of purchases. Refer to
the reconciliation in the "Operating Netback and Oil and Gas Sales,
Net of Purchases'' section on pages 20 and 21 of the
MD&A.
Net Sales
Net sales is a non-IFRS financial measure that adjusts
revenue to include realized gains and losses from risk management
contracts while removing the cost of other dilution activities.
This is a useful indicator for management as the Company hedges a
portion of its oil production using derivative instruments to
manage exposure to oil price volatility. This metric allows the
Company to report its realized net sales after factoring in these
risk management activities. The deduction for other dilution costs
and cost of purchases is helpful to understand the Company's sales
performance based on the net realized proceeds from production net
of dilution, the cost of which is partially recovered when the
blended product is sold. Net sales also exclude sales from port
services, as it is not considered part of the oil & gas
segment. Refer to the reconciliation in the "Sales" section on page
8 of the MD&A.
Midstream Colombia Calculations
Each of Midstream Revenue, Midstream Operating Cost and
Midstream General and Administrative is a non-IFRS financial
measure, and each is used to evaluate the performance of the
Midstream Colombia Segment's operations. Midstream Revenue includes
revenues of the Midstream Colombia Segment including ODL's revenue
direct participation interest. Midstream Operating Cost includes
costs of Midstream Colombia Segment including ODL's cost direct
participation interest. Midstream General and Administrative
includes general and administrative costs of the Midstream Colombia
Segment including ODL's general and administrative direct
participation interest. Refer to the reconciliation in the
"Midstream Colombia Calculations" section on page 21 of the
MD&A. Midstream Cash and Midstream Debt is a non-IFRS financial
measure or contains a non-IFRS financial measure, and is used to
evaluate the performance of the Midstream Colombia Segment's cash
position and monitor the Midstream Colombia Segment's debt.
Midstream Cash includes cash of Midstream Colombia Segment
including ODL's cash direct participation interest. Midstream Debt
includes debt of the Midstream Colombia Segment including ODL's
debt direct participation interest. Refer to the reconciliation in
the "Midstream Colombia Calculations" section on page 21 of the
MD&A. Midstream EBITDA is a non-IFRS financial measure used to
assist in measuring the operating results of the Midstream Colombia
Segment business. Refer to the calculation of non-IFRS results of
the EBITDA Midstream Colombia segment on page 17 of the
MD&A.
Net Sales Realized Price
Net sales realized price is a non-IFRS ratio that is
calculated using net sales (including oil and gas sales net of
purchases, realized gains and losses from risk management contracts
less royalties and other dilution costs). Net sales realized price
per boe is a non-IFRS ratio which is calculated dividing each
component by total sales volumes, net of purchases. Refer to the
"Net sales realized price" section on page 22 of the MD&A for a
reconciliation of this calculation.
Production Cost Per Boe, Transportation Cost Per Boe,
Royalties Per Boe and Other Dilution Costs Per Boe
Production costs mainly include lifting costs, activities
developed in the blocks, and processes to put the crude oil and gas
in sales condition. Production cost per boe is a supplementary
financial measure that is calculated using production cost divided
by production (before royalties). Refer to the "Production cost per
boe" section on page 23 of the MD&A for a reconciliation of
this calculation. Transportation costs include all commercial and
logistics costs associated with the sale of produced crude oil and
gas such as trucking, pipeline and refining processing fees.
Transportation cost per boe is a supplementary financial measure
that is calculated using transportation cost divided by net
production after royalties. Refer to the "Transportation cost per
boe" section on page 23 of the MD&A for a reconciliation of
this calculation. Royalties include royalties and amounts paid to
previous owners of certain blocks in Colombia and cash payments for PAP. Royalties
per boe is a supplementary financial measure that is calculated
using the royalties divided by total sales volumes, net of
purchases. Other dilution costs include all costs associated with
the dilution services. Other dilution costs per boe is a
supplementary financial measure that is calculated using the Other
dilution costs divided by total sales volumes, net of
purchases.
Realized (loss) gain on risk management contracts per
boe
Realized (loss) gain on risk management contracts includes
the gain or loss during the period, as a result of the Company's
exposure in derivative contracts. Realized (loss) gain on risk
management contracts per boe is a supplementary financial measure
that is calculated using Realized (loss) gain on risk management
contracts divided by total sales volumes, net of purchases.
Working Capital
Working capital is a capital management measure to describe
the liquidity position and ability to meet its short-term
liabilities. Working Capital is defined as current assets less
current liabilities.
Restricted cash short and long-term
Restricted cash (short and long term) is a capital management
measure, that sum the short-term portion and long term portion of
the cash that the Company has in term deposits that have been
escrowed to cover future commitments and future abandonment
obligations or insurance collateral for certain contingencies and
other matters that are not available for immediate
disbursement.
Total cash
Total cash is a capital management measure to describe the
total cash and cash equivalents restricted and unrestricted
available and consists of the cash and cash equivalents and the
restricted cash short and long-term.
Total debt and lease liabilities
Total debt and lease liabilities are capital management
measures to describe the total financial liabilities of the
Company, and comprises the debt of unsecured notes, loans and
liabilities from leases of various properties, power generation
supply, vehicles and other assets,
Oil and Gas Information Advisories
This news release includes terms and phrases such as
"oil-bearing intervals" and "presence of hydrocarbons". Such terms
and phrases should not be interpreted to mean there is any level of
certainty in regards to the volume of oil, natural gas or
condensates present therein, or that such volumes may be produced
profitably or in commercial quantities.
Reported production levels may not be reflective of
sustainable production rates and future production rates may differ
materially from the production rates reflected in this news release
due to, among other factors, difficulties or interruptions
encountered during the production of hydrocarbons.
The term "boe" is used in this news release. Boe may be
misleading, particularly if used in isolation. A boe conversion
ratio of cubic feet to barrels is based on an energy equivalency
conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead. In this news
release, boe has been expressed using the Colombian conversion
standard of 5.7 Mcf: 1 bbl required by the Colombian Ministry of
Mines and Energy.
Definitions:
bbl(s)
|
Barrel(s) of
oil
|
bbl/d
|
Barrels of oil per
day
|
boe
|
Refer to "Boe
Conversion" disclosure above
|
boe/d
|
Barrel of oil
equivalent per day
|
Mcf
|
Thousand cubic
feet
|
W.I.
|
Working
Interest
|
Net
Production
|
Net production
represents the Company's working interest volumes, net of royalties
and internal consumption
|
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SOURCE Frontera Energy Corporation