Frontera Energy Q3 2026 Earnings Results & Report

Frontera Energy EPS Results

• Actual EPS: C$0.24
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Frontera Energy Revenue Results

• Actual Revenue: C$79.96 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Frontera Energy (TSE:FEC) is a Canadian public company dedicated to energy-focused investments in South America, including a significant footprint in midstream assets in Colombia, such as Puerto Bahia and the ODL pipeline as well as exploration and development assets with interests in 18 blocks in Colombia and Guyana. Frontera has entered into a transaction pursuant to which its interest in the 17 blocks in Colombia together with its Proagrollanos and Agrocascada assets, are being sold, with closing expected in the second quarter of 2026. Frontera is committed to conducting business safely and in a socially, environmentally and ethically responsible manner.

Frontera Energy Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Third-quarter adjusted EBITDA rose 16% year over year to $34.8 million, with net income of $11.7 million, reversing the prior quarter’s loss. Revenue and other income also increased to $33 million from $27.9 million a year earlier.
• Positive Sentiment: Puerto Bahía port revenue grew to $15.6 million, led by a 21% quarter-over-quarter increase in general cargo and more than tripling LPG throughput. ODL transported approximately 242,000 barrels per day and continued to provide a stable source of cash distributions.
• Positive Sentiment: The Puerto Bahía LNG project was 71% complete and remains on track to start operations in February 2027 under an Ecopetrol take-or-pay agreement; LPG phase two was also sanctioned, with operations targeted for 2028. A potential 150–300 MW gas-fired power plant and further dry-cargo growth are under evaluation, but remain subject to approvals and commercial arrangements.
• Positive Sentiment: Net debt fell to $107.2 million from $114.2 million at the end of June, while the company reported $83.9 million in cash and cash equivalents. Puerto Bahía drew a $30 million revolving facility and a separate $7.7 million term-facility disbursement to fund LNG-project capital expenditures.
• Negative Sentiment: Management has not yet provided EBITDA guidance for the LNG or LPG projects, project hurdle rates, or a framework for future capital returns or dividends. It said more project-specific financial guidance is expected at the beginning of 2027.

Presentation

[Operator]

Good morning. My name is Vanessa, and I will be your conference facilitator today. Welcome to Frontera Energy's third quarter 2026 operating and financial results conference call. All lines are currently on mute to prevent any background noise. I would like to remind you that this conference call is being recorded today and is also available through an audio webcast. Following the speaker's remarks, there will be time for questions.

[Operator]

Analysts and investors are reminded that any additional questions can be directed to Frontera following today's call at ir@fronterainfrastructure.ca. This call contains forward-looking information within the meaning of applicable Canadian securities laws relating to activities, events, or developments the company believes or expects will or may occur in the future. Forward-looking information reflects the current expectations, assumptions, and beliefs of the company based on information currently available to it.

[Operator]

Although the company believes the assumptions are reasonable, forward-looking information is not a guarantee of future performance. Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the company to differ materially from those discussed in the forward-looking information.

[Operator]

The company's MD&A for the three and nine months ended September 30, 2026, and the company's annual information form 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.

[Operator]

Any forward-looking information speaks only as of the date on which it is made, and the company disclaims any intent or obligation to update any forward-looking information except as required by law. I would now like to turn the call over to Mr. Gabriel de Alba, Chairman of the Board of Frontera Energy.

[Gabriel de Alba, Chairman of the Board at Frontera Energy]

Thank you, Vanessa. Good morning, everyone, and welcome to Frontera's third quarter 2026 operating and financial results conference call. Joining me on today's call are Orlando Cabrales, Frontera's CEO, Andrés Sarmiento, Frontera's CFO, and also available to answer questions at the end of the call, we have Alejandra Bonilla, General Counsel, and Renata Campagnaro, VP Commercial and Projects. Thank you all for joining us.

[Gabriel de Alba, Chairman of the Board at Frontera Energy]

Let me begin my remarks by highlighting that Frontera's third quarter results show an infrastructure platform that is delivering stronger financial performance and cash flow in its high-value and high-growth assets. Adjusted EBITDA grew 16% year-over-year to $34.8 million, and the company recorded net income of $11.7 million. ODL continues to provide a stable stream of cash distributions with $25.6 million in ODL dividends, net of taxes received during the quarter, and $52.4 million year-to-date.

[Gabriel de Alba, Chairman of the Board at Frontera Energy]

Puerto Bahía continues to consolidate its position as a strategic energy and logistics hub on Colombia's Caribbean coast with significant opportunities for growth and long-term value creation. Looking at near-term catalysts, the LNG project, backed by the take-or-pay agreement with Ecopetrol, is on track to start operations in February 2027. The project positions the company to help address Colombia's growing natural gas supply deficit, and it opens the door to additional third-party demand.

[Gabriel de Alba, Chairman of the Board at Frontera Energy]

In parallel, the company sanctioned phase II of the LPG project during the quarter, with operations targeting to start in 2028. Beyond these projects, the company continues assessing further opportunities, including a gas-fired power generation plant anchored by the LNG project. It also continues to evaluate organic and inorganic growth opportunities at the general cargo terminal to realize its upside potential and strengthen its position in the dry cargo segment.

[Gabriel de Alba, Chairman of the Board at Frontera Energy]

Together, all these initiatives give Frontera a clear path to increase EBITDA and grow cash flow, all while investing in a high-value asset base with long-term contracts while preserving a conservative balance sheet. I would now like to turn the call over to Orlando, Frontera's CEO, and Andrés Sarmiento, Frontera's CFO, who will share their views on our third quarter results. Orlando?

[Orlando Cabrales, CEO at Frontera Energy]

Okay, let me continue. Thank you, Gabriel. Good morning, everyone, and thank you for joining us for today's call. Our third quarter results reflect the solid performance of our infrastructure assets and continued execution on our growth projects. Let me start with Puerto Bahía. Port revenues were $15.6 million in the third quarter, compared with $14.6 million in the prior quarter and $12 million in the third quarter of 2025.

[Orlando Cabrales, CEO at Frontera Energy]

Growth was led by our general cargo terminal, which increased over 21% quarter-over-quarter. RoRo units handled in the port reached 49,575, and break bulk volumes grew to 15,303 tons. LPG volumes more than tripled quarter-over-quarter, reaching 13,792 tons of throughput. During the quarter, we also signed new short-term take-or-pay agreements to handle approximately 10,000 bpd of increased diesel and fuel oil imports into Colombia, driven by thermal power generation needs associated with El Niño.

[Orlando Cabrales, CEO at Frontera Energy]

We also signed four tanks in take-or-pay with Ecopetrol, initially for fuel oil and other fuels. Turning to our ODL pipeline investment, volumes transported increased to approximately 242,000 bpd and our share of ODL income was $17.2 million. On our LNG regasification project, we continue to execute according to plan, and the project is now 71% complete. During the quarter, we advanced the jetty modifications, the civil works for the connection to the gas pipeline system, and the acquisition of the mooring systems.

[Orlando Cabrales, CEO at Frontera Energy]

Operations are expected to begin in February 2027 under the take-or-pay agreement with Ecopetrol, with initial regasification of 126 million cubic feet per day, increasing to 300 million cubic feet per day after the first two years. The estimated cost of the project is between $80 million and $100 million.

[Orlando Cabrales, CEO at Frontera Energy]

To fulfill the contract, Puerto Bahía has contracted with Excelerate Energy for the lease of a floating storage and regasification unit with capacity of approximately 500 million cubic feet per day for an initial term of seven years, extendable for an additional five to eight years. In response to the ongoing conflict in the Arabian Gulf, Excelerate expects to use another FSRU from its portfolio to serve the terminal in the near term, which assures that the project enters operation on time in 2027.

[Orlando Cabrales, CEO at Frontera Energy]

We will also soon launch an open process to identify incremental third-party LNG volumes, capitalizing on Colombia's growing natural gas supply deficit, weather-related supply pressures associated with El Niño conditions, and the additional regasification capacity of the FSRU. On LPG, operations started in March 2026 with handling capacity of up to 10,000 tons per month. We have now sanctioned phase II, awarding the EPC contract for a 29,500-ton refrigerated LPG storage facility, with operations targeted to start in 2028.

[Orlando Cabrales, CEO at Frontera Energy]

Finally, we are evaluating an entry into a power generation anchored by the LNG project, including the potential development of 150 MW to 300 MW thermal power plant. This remains in the evaluation phase and is subject to securing firm energy obligations, regulatory approvals, environmental permits, and long-term commercial arrangements before a final investment decision. We also continue to evaluate organic opportunities to strengthen our position in the dry cargo segment. I would now like to turn the call over to Andrés Sarmiento, Frontera's CFO.

[Andrés Sarmiento, CFO at Frontera Energy]

Thank you, Orlando and Gabriel, and good morning, everybody. Thank you as always for your interest and support of the company. I would like to take a moment to highlight a few key financial aspects of our third quarter results. For the third quarter, the company recorded adjusted EBITDA of $34.8 million compared to $30.5 million in the prior quarter and $30.1 million in the third quarter of 2025, representing 16% growth year-over-year.

[Andrés Sarmiento, CFO at Frontera Energy]

Adjusted EBITDA margin was 52%. Net income from continuing operations was $11.7 million, or $0.17 per share, compared to a net loss of $4 million in the prior quarter and a net income of $17.6 million in the third quarter of 2025. Total revenues and other income were $33 million compared to $31.3 million in the prior quarter and $27.9 million a year ago.

[Andrés Sarmiento, CFO at Frontera Energy]

Cash provided by operating activities from continuing operations was $21.5 million in the quarter, compared to $26 million in the prior quarter and $20.6 million in the third quarter of 2025. Turning now to our balance sheet and liquidity, and at September 30, 2026, the company had a cash and cash equivalents of $83.9 million. Total debt and lease liabilities of $191.1 million. Net debt was $107.2 million, down from $114.2 million at June 30, 2026, and $123.7 million at December 31, 2025.

[Andrés Sarmiento, CFO at Frontera Energy]

On the financing side, Bancolombia approved a $30 million revolving facility for Puerto Bahía, and we have now fully drawn it through three $10 million disbursements between June and July. After quarter end in October, Bancolombia also disbursed $7.7 million under a separate term facility. Interest on all of this loan is paid annually, with principal due in a single payment at maturity.

[Andrés Sarmiento, CFO at Frontera Energy]

The proceeds are being used to fund capital expenditures for our LNG project. Last 12 months, infrastructure distributable cash flow was $87 million, and as of September 30, 2026, compared to $78.8 million at June 2026, and $77.9 million a year ago.

[Andrés Sarmiento, CFO at Frontera Energy]

These differences are driven by the timing of ODL distribution payments between periods, rather than by changes in underlying operating performance. Capital expenditures from continuing operations were $19.5 million for the quarter, compared to $7.8 million in the prior quarter, and $3.9 million in the third quarter of 2025, and $28.3 million for the nine months.

[Andrés Sarmiento, CFO at Frontera Energy]

Investment in the LNG project was $17.7 million, mainly related to modifications of the jetty, including civil works for its connection to the gas pipeline system, access platforms, and other equipment to support FSRU operations, as well as the acquisition of mooring and mooring systems. Other Puerto Bahía investments were $1.8 million, including the LPG project, cargo terminal facilities, and software licenses. I would now like to turn the call back to Orlando.

[Orlando Cabrales, CEO at Frontera Energy]

Thank you, Andrés. Before I conclude today's call, I would like to reiterate that Frontera is executing on its growth projects to increase asset value and cash flow generation. The LNG project at Puerto Bahía on track to start operations in February of 2027, and phase II of the LPG project, with longer-term opportunities in power generation and the dry cargo. With that, I would like to conclude by saying thank you to Gabriel and Andrés for their comments, and thank you everyone for attending our call. I will now turn the call back to our operator.

[Operator]

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised.

[Operator]

Should you wish to decline from the polling process, please press the star followed by the two. If you're using a speakerphone, please lift the handset first before pressing any keys. Once again, that is star and one to queue up with a question. I do not see any questions at this time. Pardon me, we had someone queue up just now. Our first question is from Brendan Cumming with Bison Interests.

[Brendan Cumming, Analyst at Bison Interests]

Hey, guys. Thanks for taking my question. I am curious if you could provide any guidance on the incremental EBITDA uplift once the LNG starts going in February 2027.

[Orlando Cabrales, CEO at Frontera Energy]

Yes, thank you for the question. We have not provided that to the market yet, but certainly at the beginning of next year, that would be a good opportunity to provide guidance to the market as we normally do. But at this point of time, we have not provided any financial metrics on the project yet.

[Brendan Cumming, Analyst at Bison Interests]

Okay. Got it. Thank you.

[Orlando Cabrales, CEO at Frontera Energy]

Thank you.

[Operator]

And thank you. Our next question is from Jordan Steiner with Developer Capital.

[Jordan Steiner, CEO at Developer Capital]

Hey, guys. Morning. Question on ODL. ODL has been fairly flat for a number of years, but now with the recent change in government, and it looks like there is going to be some new auctions for leases and mineral rights, what is your outlook, and can we get back to growth?

[Orlando Cabrales, CEO at Frontera Energy]

No, I mean, certainly ODL is a wonderful piece of business. It has been, I mean, very stable, as you said, over the years, very stable dividends over the years. The pipeline is very well located, and the fields that feed the pipeline represent 30% of the production in Colombia, 70% of the 1P reserves of the country. So, it is very well located, and the incremental volumes that we see from last quarter to the third quarter were mainly due to Caño Sur, which is a new field that Ecopetrol is operating.

[Orlando Cabrales, CEO at Frontera Energy]

As you said, I mean, the expectation is that with the new government, a much more business-friendly policies to the oil and gas sector, which is becoming a fundamental sector for the economy and for the new government. We may expect, I mean, additional exploration activities in the country and catching up from what we had before the last government.

[Jordan Steiner, CEO at Developer Capital]

All right, thanks. Just a couple follow-ups. On the LPG, it is ramping nicely. We are starting to see the volumes come through. I am just wondering if you have given any formal guidance to what fully ramped EBITDA looks like from that project.

[Orlando Cabrales, CEO at Frontera Energy]

We have not done that, but certainly that will be also part of the guidance that we will provide to the market at the beginning of next year.

[Jordan Steiner, CEO at Developer Capital]

Okay, thanks. Yeah, I think it is helpful. There are a lot of moving parts, and now that you have streamlined the business, just getting individual guidance on projects. Maybe let me ask it a different way that is more general. You guys approve projects, you run internal modeling. What is your internal hurdle rate for new capital put to work?

[Orlando Cabrales, CEO at Frontera Energy]

The new, Andrés?

[Andrés Sarmiento, CFO at Frontera Energy]

No, we have not provided this information to the market. Most importantly, as Orlando was saying, what we are going to do going forward in our guidance for 2027, we are going to be giving some more information with regards to a specific project.

[Jordan Steiner, CEO at Developer Capital]

All right, thanks. My guess is this is going to fall into the same bucket, but let us try. You have been extremely shareholder-friendly in the last 12 months. The transaction you executed, selling assets at full value, return capital, extremely shareholder-friendly.

[Jordan Steiner, CEO at Developer Capital]

Market is not really giving you credit for that. I think part of it, the reason why is the lack of guidance, so hopefully that changes when you put out a 2027 forecast. I guess my question is, as you start delevering the company, what is your view for a return of capital framework, and do you intend to start paying a dividend?

[Orlando Cabrales, CEO at Frontera Energy]

Well, I mean, certainly we have not provided anything to the market on that. As you said, I mean, we are transitioning the company from a combination of E&P infrastructure business into a pure infrastructure play. So, this year, I mean, has been amazing in that transformation of the company. As you said, I mean, capital reduction was a significant one for shareholders. That was a significant milestone.

[Orlando Cabrales, CEO at Frontera Energy]

But we are also absolutely excited with what we have in our hands with the infrastructure business. If you see the port, the port is a combination of different businesses, no? So, it is the current existing liquids business plus the dry terminal, mainly with RoRo operations, import of cars into the country. Puerto Bahía, bring about 50% of the total car imports in Colombia. Those are two businesses, existing business.

[Orlando Cabrales, CEO at Frontera Energy]

You have the two new ones, which are under execution, LPG and LNG, that are under execution. Management has been absolutely focused on that in the last months as we transition from E&P to an infrastructure company. There are two others, for a total of six businesses, where you have the power plant that we spoke about, that we are in this process of structuring that project, which is very exciting given the upcoming deficit of the electricity market.

[Orlando Cabrales, CEO at Frontera Energy]

So, similar to what we are seeing today with the gas markets, the projection going forward of supply and demand in the electricity market is getting very tight. So, it makes a lot of sense to have that power project. The sixth is the potential significant upside that the dry terminal has with container and non-containerized cargo.

[Orlando Cabrales, CEO at Frontera Energy]

It is very busy days, very exciting about the future, and we look forward to provide those financial metrics at the beginning of next year. Certainly, we have been maximizing shareholder return. We will continue to do that, so no doubt about it. Very excited about what we have in front of us and what is coming next.

[Jordan Steiner, CEO at Developer Capital]

All right. Thanks, guys. Appreciate it.

[Orlando Cabrales, CEO at Frontera Energy]

Thank you.

[Operator]

We have no further questions. At this time, I will turn the call over to the company for closing statements.

[Orlando Cabrales, CEO at Frontera Energy]

Thank you, Vanessa. Thank you for helping us here, and thank you for everybody to join the call.

[Operator]

Thank you, ladies and gentlemen. This concludes today's conference. We thank you for your participation. You may now disconnect.

Participants

Executives

• Gabriel de Alba, Chairman of the Board
• Orlando Cabrales, CEO
• Andrés Sarmiento, CFO

Analysts

• Brendan Cumming, Analyst at Bison Interests
• Jordan Steiner, CEO at Developer Capital