FRONTERA ANNOUNCES DEFINITIVE AGREEMENT WITH GEOPARK TO DIVEST ITS COLOMBIAN E&P ASSETS PORTFOLIO FOR A FIRM VALUE OF $622 MILLION

Core Viewpoint - Frontera Energy Corporation has entered into a definitive agreement with Geopark Limited to divest its Colombian exploration and production assets for a firm value of $622 million, transitioning Frontera into a focused infrastructure company while retaining its infrastructure business and interests in Guyana [1][2]. Transaction Details - The total cash consideration for the transaction is up to $400 million, which includes $375 million payable at closing and a $25 million contingent payment based on the achievement of specific development milestones [1][2]. - Geopark will acquire 100% of Frontera's Colombian upstream business, including oil and gas exploration and production assets, a reverse osmosis water treatment facility, and a palm oil plantation [1][2]. - The transaction implies a firm value of $622 million for the acquired assets, factoring in cash consideration and the assumption of existing debt [1][2]. Financial Implications - Following the transaction, Frontera plans to distribute approximately $370 million to shareholders, equating to CAD$7.18 per share, with the distribution details to be communicated before the shareholder meeting [1][2]. - The equity purchase price of $400 million represents a 25% premium to the 90-day volume-weighted average price (VWAP) and an 18% premium to the current stock price of Frontera [1][2]. - Frontera's infrastructure business is expected to generate an estimated $77 million in distributable cash flow for 2025, supported by a stable dividend stream from its investment in ODL [1][2]. Infrastructure Business Overview - Frontera retains full ownership of its infrastructure business, which includes a 35% equity interest in the Oleoducto de los Llanos Orientales S.A. (ODL) crude oil pipeline and a 99.97% equity interest in Sociedad Portuaria Puerto Bahia [2]. - The infrastructure business has generated over $194 million in distributable cash flows since 2023, with $77 million expected in 2025 alone [2]. - Puerto Bahia is set to enhance asset value and cash flow potential through several near-term growth projects, including LPG import facilities and an LNG regasification project [2]. Shareholder Engagement - The transaction requires approval from at least 66 2/3% of the votes cast by Frontera's shareholders at a special meeting, expected to be held in April 2026 [2]. - The independent members of Frontera's Board of Directors have unanimously determined that the transaction is fair and in the best interests of the company, recommending shareholder approval [2].