Frontera Energy Q2 2026 Earnings Report

Frontera Energy EPS Results

• Actual EPS: C$0.59
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Frontera Energy Revenue Results

• Actual Revenue: $69.16 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Frontera Energy Announcement Details

• Quarter: Q2 2026
• Date: 8/15/2026
• Time: After Market Closes
• Conference Call Date: Tuesday, August 18, 2026
• Conference Call Time: 9:00AM ET

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 Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Frontera completed its arrangement with Parex Resources, returning CAD 8.34 per share to shareholders and leaving the company focused on infrastructure assets with net leverage below one times adjusted EBITDA.
• Positive Sentiment: Second-quarter adjusted EBITDA rose 18% year over year to $30.5 million, while operating cash flow from continuing operations improved to $26 million; net debt declined to $114.2 million.
• Positive Sentiment: Puerto Bahia continued to gain momentum, with port revenue increasing to $14.6 million and RoRo cargo volumes up approximately 85% year over year, supported by strong automotive demand and rising LPG volumes.
• Positive Sentiment: The Puerto Bahia LNG project secured a seven-year take-or-pay agreement with Ecopetrol and a seven-year FSRU lease with Excelerate Energy, supporting the company’s target of achieving first gas in early 2027.
• Neutral Sentiment: Frontera arranged a $30 million Bancolombia loan facility and a letter of credit facility of up to $12.6 million to fund LNG project supplier advances and secure obligations under the FSRU agreements, increasing financial support for execution while adding project-related commitments.

Presentation

[Operator]

Good morning. My name is Vincent, and I will be your conference facilitator today. Welcome to Frontera Energy's second 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. 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. The company's MD&A for the three and six months ended June 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. 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. Mr. de Alba?

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

Thank you, operator. Good morning, everyone, and welcome to Frontera's second quarter 2026 operating and financial results conference call. Joining me today are Orlando Cabrales, Frontera's CEO, and Andrés Sarmiento, Frontera's CFO. Also available to answer questions at the end of the call are Alejandra Bonilla, our General Counsel, and Renata Campagnaro, our Vice President of Commercial and Projects. Thank you all for joining us. This quarter marked an important turning point for Frontera. On June 1st, 2026, we completed the plan of arrangement with Parex Resources. With the completion of the Parex transaction, CAD 8.34 per share was returned to our shareholders, an important realization of value and the culmination of a multiyear effort to simplify the company, unlock value for our shareholders, and establish a stronger foundation for Frontera's next chapter.

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

Frontera today is a fundamentally different company, simpler and focused on infrastructure with resilient cash-generating assets, leverage below one times adjusted EBITDA, and a differentiated growth opportunity through LNG at Puerto Bahia. Together, this positioned the company to be a meaningful player in Colombia's energy security. With that transformation now complete, the board's mandate is equally clear. Focus on growth, execute, allocate capital with discipline, and create long-term value for our shareholders. We also made important progress during the quarter on the next phase of Puerto Bahia's development. The take-or-pay agreement with Ecopetrol, together with the floating storage and regasification unit capacity secured with Excelerate Energy.

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

These are substantial advances that put forward the commercial and technical foundation of our LNG regasification project. Our focus now is execution, delivering the milestones required to achieve first gas in early 2027, continuing to grow our existing port business, and operating our assets safely and efficiently. With that, I'd now like to turn the call over to Orlando Cabrales, Frontera's CEO, and Andrés Sarmiento, Frontera's CFO, who will take you through our second quarter results in greater detail. Orlando?

[Orlando Cabrales Segovia, CEO at Frontera Energy]

Thank you, Gabriel. Good morning, everyone, and thank you for joining us for today's call. Our second quarter results reflect the successful completion of our multiyear transformation and the solid underlying performance of our infrastructure assets. Let me start with Puerto Bahia. Port revenues were $14.6 million in the second quarter compared with $12.7 million in the prior quarter and $11.3 million in the second quarter of 2025. Puerto Bahia has established itself as a key strategic partner to the automotive sector in Colombia, with RoRo cargo volumes up approximately 85% year-over-year and 26% quarter-over-quarter. April 2026 established a new all-time record, handling 17,200 units in a single month, reflecting the strong underlying demand momentum, while LPG volumes continued to ramp up during the quarter. Turning to our ODL pipeline investment, we received $26.8 million in ODL dividends during the second quarter of 2025.

[Orlando Cabrales Segovia, CEO at Frontera Energy]

During the quarter, ODL declared an additional return of capital of $5.2 million. On our LNG regasification project, Puerto Bahia has entered into a seven-year take-or-pay agreement with Ecopetrol to provide integrated logistics and LNG regasification services in Cartagena. The agreement will be developed in two phases, with an initial two-year regasification capacity of 126 million cu ft per day starting in 2027, increasing to 300 million cu ft per day thereafter. To fulfill the contract, Puerto Bahia has also contracted with Excelerate Energy for the lease of a floating storage and regasification unit for an initial term of seven years, extendable for an additional five to eight years. 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 for the company. I'd like to take a moment to highlight a few key financial aspects of our second quarter results. For the second quarter, the company recorded an adjusted EBITDA of $30.5 million, compared to $28.5 million in the prior quarter, and $25.9 million in the second quarter of 2025, representing 18% growth year-over-year. Cash provided by operating activities from continuing operations was $26 million in the quarter, compared to cash use of $5 million in the prior quarter and cash use of $6.6 million in the second quarter of 2025. Turning now to our balance sheet and liquidity. As at June 30, 2026, the company had a total cash balance of $56.3 million.

[Andrés Sarmiento, CFO at Frontera Energy]

Net debt was $114.2 million, down from $123.7 million at December 31, 2025, and our net debt to adjusted EBITDA ratio improved to 0.98x compared to 1.35x a year ago. Last 12 months, our distributable cash flow was $78.8 million as at June 30, 2026, compared to $21.4 million at March 31st, 2026, and $71.4 million a year ago. On capital allocation, we returned CAD 8.34 per common share to shareholders on June 23rd, 2026, in connection of the Parex arrangement. Capital expenditures from continuing operations were $1.5 million for the quarter and $2.5 million for the six months. During the quarter, investments in Puerto Bahia included $0.5 million toward the LPG project and $0.2 million toward the LNG project.

[Andrés Sarmiento, CFO at Frontera Energy]

To support the LNG project, Bancolombia approved a $30 million loan facility to Puerto Bahia, of which $10 million were 2026, with additional $20 million disbursements made subsequent to quarter and on July 2026. Proceeds are being used for advances to suppliers of the LNG project. Also subsequent to quarter end, the company entered into a letter of credit facility agreement with Macquarie Bank Limited for up to $12.6 million as security for our obligations under the FSRU international leasing agreement and operation service agreement with Excelerate Energy. I would now like to turn the call back over to Orlando.

[Orlando Cabrales Segovia, CEO at Frontera Energy]

Thank you, Andrés. Before I conclude today's call, I would like to reiterate that with our transformation now complete, Frontera Energy enters this next phase as a simplified, standalone infrastructure platform with a strong balance sheet, leverage below one time adjusted EBITDA, and a clear growth pathway through the LNG regasification project at Puerto Bahia, where we are targeting first gas in early 2027. I want to thank our employees for their continued dedication throughout this transformative period for the company. 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, who will open it up for questions.

[Operator]

At this time, for those wishing to ask a question, please press star then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Again, if you wish to ask a question, please press star then the number one on your telephone keypad. There are no questions at this time. I will turn the call back over to Orlando Cabrales.

[Orlando Cabrales Segovia, CEO at Frontera Energy]

Okay. Thank you, operator. Thank you again, everyone, for attending this call. Have a good day.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect.

Participants

Executives

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