Canadian oil explorer and producer, Frontera Energy Corporation has disclosed that it recorded net income of CA$102.2 million or CA$1.08/share in the first quarter of 2022, compared with net income of CA$629.4 million or CA$6.60/share in the prior quarter and a net loss of CA$14.1 million or CA$0.14/share in the first quarter of 2021.
Frontera holds a 33.33% stake in the Corentyne and Demerara Blocks offshore Guyana where CGX Energy is operator with 66.67%.
CGX, Frontera to inject up to US$130M for more exploration at Corentyne block
Frontera explained that the decrease in net income over the quarter was mainly due to issues with cargo sales.
The Canadian conglomerate also told shareholders and potential investors that capital expenditures were CA$113.5 million in the first quarter of 2022, compared with CA$135.5 million in the prior quarter and CA$14.4 million in the first quarter of 2021. Frontera said capital expenditures during the quarter included exploration activity in support of the Kawa-1 exploration well offshore Guyana, light and medium crude oil discoveries in Ecuador at the Jandaya-1 and Tui-1 exploration wells and maintaining a high-level of execution of development drilling in the company’s base Colombia operations.
CGX plugs, abandons Kawa-1 well; says that was its intention all along
Expounding on the company’s performance for 2022 Gabriel de Alba, Chairman of the Board of Directors, commented that Frontera continued to deliver strong results, in-line with full year production guidance of 40,000-43,000 boe/d and annual Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) guidance of CA$575-$625 million at US$90/bbl Brent.
As the company has uncapped exposure to higher oil prices, the Chairman explained that every US$10/bbl increase in average Brent price for the year equals approximately US$100 million additional EBITDA. “Frontera expects first quarter operational momentum to continue throughout the rest of the year, which is expected to drive higher production and profitability in subsequent quarters,” the Chairman concluded.
Government wants CGX to carry out work commitments on Berbice, Demerara blocks
Orlando Cabrales, Chief Executive Officer (CEO) of Frontera, agreed that the company delivered a strong performance as it increased production by 6.5% to 41,100 boe/d, recorded net income of CA$102.2 million, and increased its operating netback by 22% while net sales realised an increase in price by 17%. The CEO said, “We delivered EBITDA of CA$132.8 million, down quarter over quarter due to the timing of cargo sales in Q1 impacting volumes sold in Colombia and an increase in inventory which will be sold in subsequent quarters according to nomination and scheduling of cargos.”
In spite of the aforementioned setback, Cabrales was keen to note that Frontera is reviewing opportunities for increased production in the second half of the year.
CGX prepping for next target on Corentyne Block with initial cost pegged at US$93M
Frontera and CGX have sealed a US$35 million loan agreement that will see the JV partners plugging more funds in the Corentyne Block and the Berbice Deepwater Port along with other costs associated with the deal for their Guyana operations.
