Frontera Energy Corporation has made a turnaround, reporting net income of US$32.6 million, or US$0.38 per share, in the third quarter of 2023. This performance marks a recovery from the net loss of US$26.9 million, or US$0.30 per share, experienced in the same quarter of the previous year.
The net income includes an operating income of US$65.0 million, a share of income from associates amounting to US$13.7 million, a foreign exchange gain of US$4.3 million, and finance income of US$1.9 million. These gains were slightly offset by finance expenses of US$16.4 million, other expenses of US$1.2 million, and income tax expenses totaling US$15.3 million.
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Frontera’s production averaged 40,802 barrels of oil equivalent per day (boe/d) in the third quarter, showcasing a diverse output mix. This production consisted of 24,097 barrels per day (bbl/d) of heavy crude oil, 13,964 bbl/d of light and medium crude oil, 5,250 thousand cubic feet per day (mcf/d) of conventional natural gas, and 1,820 boe/d of natural gas liquids.
The decrease in production was mainly attributed to lower light and medium crude oil production in Colombia, following the relinquishment of the Neiva and Orito blocks to Ecopetrol. However, these were partially offset by a record quarterly CPE-6 production, reactivation of the Sabanero block, and successful Jandaya-1 well stimulation in Ecuador.
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The company’s financial stability was further strengthened by an Operating EBITDA (earnings before interest, taxes, depreciation and amortization) of US$137.8 million, an 18% increase from the prior quarter. This increase can be attributed to higher Brent oil prices and improved differentials during the quarter, although partially offset by higher production and transportation costs.
Frontera’s capital expenditures were reported at US$74.1 million in the third quarter of 2023, marking a significant reduction from the previous quarter’s US$154.9 million, as the company and its partner, CGX Energy, wrapped up drilling operations at Wei-1 in Guyana. The third quarter of 2023 saw Frontera continuing to make headway in its Guyana business. The company confirmed the discovery of oil reserves in the Corentyne block, which is expected to bolster its future prospects.
Gabriel de Alba, Chairman of the Frontera board of directors, commented: “In parallel with the third-party laboratory confirmation of our significant light oil and sweet medium crude discovery at Wei-1, the Joint Venture, with support from Houlihan Lokey, is reviewing strategic options for its potentially transformational Guyana exploration business, the Corentyne block, including a potential farm down, as it progresses its efforts to maximize value from its investments in Guyana.”
Frontera holds a 72.7% stake in the Corentyne block in Guyana, which it shares with CGX Energy, the operator.
