What Frontera Energy (FEC) Said on Its Q3 Earnings Call

Key Points

• Adjusted EBITDA rose 16% year over year to $34.8 million, while net income from continuing operations fell to $11.7 million from $17.6 million.
• Puerto Bahía revenue increased to $15.6 million, and its estimated $80 million–$100 million LNG regasification project was 71% complete, with operations targeted for February 2027.
• Frontera’s net debt declined to $107.2 million from $114.2 million at the prior quarter-end; quarterly capital spending was $19.5 million, including $17.7 million for the LNG project.

Frontera Energy TSE: FEC reported a 16% year-over-year increase in third-quarter adjusted EBITDA as its Puerto Bahía port generated higher revenue and the company advanced a liquefied natural gas project targeted to begin operations in February 2027.

Adjusted EBITDA rose to $34.8 million from $30.1 million a year earlier, while net income from continuing operations fell to $11.7 million, or $0.17 per share, from $17.6 million, Chief Financial Officer Andrés Sarmiento said. Total revenues and other income increased to $33 million from $27.9 million.

Chairman Gabriel de Alba said the results reflected stronger financial performance and cash flow from the company’s infrastructure assets. Frontera received $25.6 million in dividends from its ODL pipeline investment during the quarter, net of taxes, bringing the year-to-date total to $52.4 million.

Puerto Bahía Growth and LNG Progress

Puerto Bahía port revenue rose to $15.6 million from $14.6 million in the second quarter and $12 million a year earlier, CEO Orlando Cabrales said. Growth was led by the general cargo terminal, which increased more than 21% from the prior quarter. The port handled 49,575 roll-on/roll-off units and 15,303 tons of break bulk cargo.

Liquefied petroleum gas, or LPG, throughput more than tripled quarter over quarter to 13,792 tons. Frontera also signed short-term take-or-pay agreements to handle approximately 10,000 barrels per day of additional diesel and fuel oil imports into Colombia, as well as agreements with Ecopetrol for four tanks initially intended for fuel oil and other fuels.

Cabrales said the LNG regasification project at Puerto Bahía was 71% complete. The estimated $80 million to $100 million project is expected to begin operations under a take-or-pay agreement with Ecopetrol, initially regasifying 126 million cubic feet per day and increasing to 300 million cubic feet per day after the first two years.

Puerto Bahía has contracted with Excelerate Energy to lease a floating storage and regasification unit with capacity of about 500 million cubic feet per day. Cabrales said Excelerate expects to use another vessel from its fleet in the near term in response to the conflict in the Arabian Gulf, supporting the project’s planned start.

Frontera also plans to launch a process to identify additional third-party LNG volumes. The company has not yet provided an estimate of the project’s incremental EBITDA, Cabrales told Bison Interests analyst Brendan Cumming, but said the beginning of next year would be an opportunity to provide guidance.

Additional Projects and ODL Outlook

Frontera sanctioned the second phase of its LPG project and awarded an engineering, procurement and construction contract for a 29,500-ton refrigerated storage facility. Operations are targeted to begin in 2028. The first phase began operating in March 2026 with handling capacity of up to 10,000 tons per month.

The company is also evaluating a 150-megawatt to 300-megawatt thermal power plant anchored by the LNG project. Cabrales said a final investment decision would depend on firm energy obligations, regulatory approvals, environmental permits and long-term commercial arrangements. Frontera is also evaluating opportunities at its dry cargo terminal.

ODL transported approximately 242,000 barrels per day during the quarter, and Frontera’s share of its income was $17.2 million, Cabrales said. Responding to a question from Developer Capital CEO Jordan Steiner, he said the increase in volumes from the prior quarter was mainly attributable to Ecopetrol’s Caño Sur field. Cabrales said he expected more business-friendly oil and gas policies under Colombia’s new government could support additional exploration activity.

Debt, Spending and Guidance

At September 30, Frontera had $83.9 million in cash and equivalents and $191.1 million in total debt and lease liabilities. Net debt declined to $107.2 million from $114.2 million at June 30 and $123.7 million at the end of 2025.

Capital expenditures from continuing operations rose to $19.5 million for the quarter, including $17.7 million for the LNG project. Sarmiento said Bancolombia’s $30 million revolving facility for Puerto Bahía had been fully drawn, while a separate term facility disbursed $7.7 million after quarter end. The proceeds are being used to fund LNG capital spending.

Asked about LPG earnings guidance and the company’s internal investment hurdle rate, Cabrales and Sarmiento said Frontera had not disclosed those figures. Management expects to provide more project-specific information with its 2027 guidance. Cabrales also said the company had not announced a return-of-capital framework or dividend plan as it transitions from a combined exploration and production and infrastructure business into a pure infrastructure company.

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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