Frontera Energy Corporation disclosed on Wednesday morning that it recorded a net income or profit of US$13.5 million or US$0.14 per share in the second quarter of 2022. This is a significant drop when compared with a net income of US$102.2 million or US$1.08/share in the prior quarter.
During the quarter, the company was keen to note that it invested heavily in its key assets. It said US$73 million was funneled into its exploration, production, and development facilities in Colombia and Ecuador, US$41 million was dedicated to debt service obligations (including US$21 million for Puerto Bahia’s equity contribution agreement obligations), it returned US$20 million in capital to shareholders, invested an additional US$20 million in its potentially transformative exploration opportunity in Guyana, and recorded US$40 million in capital expenditure (CAPEX) related working capital adjustments.
Gabriel de Alba, Chairman of the Board of Directors, commented that his firm continued to perform ahead of plan, substantially delivering on its financial and operating objectives in the first six months of 2022, while extending its track record of Environmental, social, and corporate governance (ESG) delivery and focusing on enhancing shareholder returns through its ongoing share buyback.
Subsequent to the quarter, Alba recalled that Frontera had announced a transaction with CGX that will increase the company’s working interest in the Corentyne block offshore Guyana, to 68% and secure funding of up to US$130 million for the Joint Venture’s second exploration well, Wei-1, which is anticipated to be spud in October.
In light of the company’s “strong operational and financial performance” in the first half of this year and the momentum it expects to carry into the second half of the year, Frontera, he said, will be tightening its 2022 production guidance to 41,000-43,000 barrels of oil-equivalent per day (boe/d). It will also increase its operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) guidance to US$675-US$700 million as a result of an increase in assumed Brent prices at US$100/bbl.
The company also reiterated its cost guidance including production costs of US$11.00-US$12.00/boe and transportation costs of US$10.00-US$11.00/boe.