Frontera Energy Q2 Earnings Call Highlights

Key Points

• Frontera Energy completed its transformation into a standalone, infrastructure-focused company after finalizing its arrangement with Parex Resources, returning CAD 8.34 per share to shareholders.
• Puerto Bahia delivered stronger performance, with second-quarter revenue rising to $14.6 million and RoRo cargo volumes increasing 85% year over year; ODL also provided $26.8 million in dividends.
• The company advanced its Cartagena LNG regasification project through a seven-year Ecopetrol take-or-pay agreement and an FSRU lease with Excelerate Energy, while adjusted EBITDA rose 18% year over year to $30.5 million and leverage improved to 0.98 times.

Frontera Energy TSE: FEC said its second-quarter results reflected the completion of its transformation into a standalone infrastructure-focused company, supported by higher port revenue at Puerto Bahia, improved cash generation and progress on a planned LNG regasification project in Cartagena.

The company completed its plan of arrangement with Parex Resources on June 1. Chairman Gabriel de Alba said the transaction resulted in a return of CAD 8.34 per share to shareholders on June 23 and marked the culmination of a multiyear effort to simplify the business and unlock value.

“Frontera today is a fundamentally different company, simpler and focused on infrastructure with resilient cash-generating assets,” de Alba said. He added that the company’s focus is now on growth, execution and disciplined capital allocation.

Puerto Bahia revenue and cargo volumes rise

Chief Executive Officer Orlando Cabrales said Puerto Bahia generated port revenue of $14.6 million in the second quarter, up from $12.7 million in the prior quarter and $11.3 million in the second quarter of 2025.

The port continued to expand its role in Colombia’s automotive sector, with roll-on/roll-off, or RoRo, cargo volumes rising about 85% from a year earlier and 26% sequentially. Puerto Bahia handled a record 17,200 units in April, Cabrales said. LPG volumes also continued to ramp up during the quarter.

Frontera also received $26.8 million in dividends from its ODL pipeline investment, according to Cabrales. During the quarter, ODL declared an additional $5.2 million return of capital.

LNG project advances under Ecopetrol agreement

The company highlighted commercial and financing developments for its LNG regasification project at Puerto Bahia. Puerto Bahia entered into a seven-year take-or-pay agreement with Ecopetrol to provide integrated logistics and LNG regasification services in Cartagena.

The agreement is planned to proceed in two phases. The initial phase would provide regasification capacity of 126 million cubic feet per day for two years beginning in 2027, followed by capacity of 300 million cubic feet per day.

To support the contract, Puerto Bahia signed an agreement with Excelerate Energy to lease a floating storage and regasification unit, or FSRU, for an initial seven-year term. The lease may be extended for an additional five to eight years.

De Alba said the Ecopetrol agreement and the secured FSRU capacity provide the commercial and technical foundation for the project. Frontera is targeting first gas from the development in early 2027.

EBITDA, operating cash flow and leverage improve

Chief Financial Officer Andrés Sarmiento reported adjusted EBITDA of $30.5 million for the second quarter, compared with $28.5 million in the first quarter and $25.9 million in the second quarter of 2025. The year-over-year increase was 18%.

Cash provided by operating activities from continuing operations totaled $26 million, compared with cash used of $5 million in the previous quarter and cash used of $6.6 million a year earlier.

• Total cash was $56.3 million as of June 30, 2026.
• Net debt was $114.2 million, down from $123.7 million at Dec. 31, 2025.
• Net debt to adjusted EBITDA improved to 0.98 times from 1.35 times a year earlier.
• Last-12-month distributable cash flow was $78.8 million, compared with $21.4 million at March 31, 2026, and $71.4 million a year earlier.

Capital expenditures from continuing operations were $1.5 million during the quarter and $2.5 million for the first six months of 2026. Investments at Puerto Bahia included $0.5 million for the LPG project and $0.2 million for the LNG project.

Sarmiento said Bancolombia approved a $30 million loan facility for Puerto Bahia to support the LNG project. Of that amount, $10 million was available in 2026, while an additional $20 million was disbursed after quarter-end in July. The proceeds are being used for advances to LNG-project suppliers.

After the quarter ended, Frontera also entered into a letter-of-credit facility agreement with Macquarie Bank Limited for up to $12.6 million. The facility is intended to secure obligations under the FSRU leasing agreement and an operating services agreement with Excelerate Energy.

Cabrales said Frontera is entering its next phase with a simplified infrastructure platform, lower leverage and a growth pathway centered on the Puerto Bahia LNG project.

About Frontera Energy (TSE:FEC)

Frontera Energy Corporation 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.

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