Frontera to sell Colombian operations to Parex in $750m deal

Frontera Energy has signed a definitive statement with Parex Resources for the merchantability of its Colombian exploration and accumulation (E&P) assets successful a woody worthy $750m, inclusive of debt.

Under the terms, Parex volition get these assets for an equity information of up to $525m, with $500m owed astatine closing and an further $25m payable contingent upon an hold of the Quifa relation declaration wrong 12 months.

Parex volition besides presume Frontera’s $310m successful 2028 elder unsecured notes and its $80m Chevron prepayment facility, bringing the full transaction worth to astir $750m.

Frontera Energy CEO Orlando Cabrales said: “As the largest autarkic relation successful Colombia with a beardown narration with cardinal Colombian stakeholders and nonstop cognition of our assets though our VIM-1 partnership, Parex brings beardown operational and fiscal capabilities and continuity for our employees, partners and communities.

“For Frontera, this transaction marks the opening of our adjacent section arsenic a pure-play infrastructure institution with astir $77m successful distributable currency flows, aggregate near-term maturation catalysts astatine Puerto Bahia, including the LPG [liquefied petroleum gas] import facilities, the imaginable LNG [liquefied earthy gas] regasification task and containerised cargo expansion, and a beardown way to returning superior to our shareholders.”

The statement follows Parex's revised connection offering an other $125m successful equity information compared to a erstwhile statement with GeoPark, which had been announced connected 29 January 2026.

As a result, Frontera terminated its woody with GeoPark and paid a $25m interruption interest successful enactment with the statement terms.

Frontera intends to administer astir $470m, including the contingent payment, to shareholders aft closing, taxable to shareholder support and aft accounting for payments specified arsenic the GeoPark interruption fee, reserved superior for maturation projects and transaction costs.

This organisation is expected to beryllium astir C$9.18 per share.

The company’s remaining concern volition absorption connected infrastructure assets. This includes a 35% involvement successful the Oleoducto de los Llanos Orientales pipeline and a 99.97% involvement successful Sociedad Portuaria Puerto Bahia, on with different non-Colombian holdings specified arsenic those successful Guyana.

Upon completion of the transaction, Frontera estimates it volition clasp astir $50m successful currency and equivalents to enactment strategical initiatives wrong its infrastructure business. This includes assessing a imaginable LNG regasification task with Ecopetrol.

The statement volition proceed nether the Business Corporations Act (British Columbia) by mode of a program of statement and is scheduled to adjacent successful Q2 2026.