Frontera Energy announced the appointment of a new CEO, presented the outlook for 2018 and the results of 2017

Herbert has over 36 years of experience in oil and gas exploration and development worldwide with BP, Talisman Energy, and Phillips Petroleum. In 26 years with BP, he was responsible for major exploration and development initiatives globally. Additionally, he worked in South America in Colombia, Mexico, and Venezuela. He holds a degree in science, with honors, in Geology from the University of Bristol.

• Starting April 2, Richard Herbert will be the new CEO of the company, and David Dyck will join Frontera Energy as CFO.
• The company's production in 2017 remained stable, at 70,082 bpe/d.
• The company added 27 million barrels of oil equivalent to the 2P reserves, which replaced the 105% of the produced volumes.
• The operating EBITDA was 11% above expectations for 2017.
• The company expects to drill between 125 and 135 development wells, and 11 to 15 exploratory wells in 2018.

Herbert has over 36 years of experience in oil and gas exploration and development worldwide with BP, Talisman Energy, and Phillips Petroleum. In 26 years with BP, he was responsible for major exploration and development initiatives globally. Additionally, he worked in South America in Colombia, Mexico, and Venezuela. He holds a degree in science, with honors, in Geology from the University of Bristol.

Additionally, David Dyck joins the company as CFO. He has over 29 years of experience and was recognized as CFO of the year in Canada by the Energy Executive Awards. Dyck has been Chief Financial Officer and Senior Vice President of Penn West Petroleum, Ltd., and previously was CFO of a private energy company.

On the other hand, Frontera Energy presented the outlook for 2018, as well as the results for 2017.

2018 Outlook

• The company expects net production, after royalties, to be between 65,000 and 70,000 barrels of oil equivalent per day (bpe/d).
• EBITDA is expected to be between US$375 and US$425 million, assuming an average Brent oil price of US$63 per barrel.
• Annual production costs per bpe are anticipated to be between US$12.00 and US$14.00, and transportation costs, excluding the impact of the time when the Bicentenario pipeline is unavailable, are expected to be between US$12.50 and US$14.50 per bpe.
• Frontera expects annual general and administrative (G&A) expenses to be between US$100 and US$110 million.
• In 2018, Frontera will make significant investments as it reallocates excess cash to position itself for growth in 2018.
• Investments will be between US$450 and US$500 million, representing a 101% increase from the previous year, which will be distributed as follows:

ACTIVITY	ESTIMATED
Maintenance and development drilling	225 – 240
Facilities and infrastructure	125 – 140
Exploration activities	100 – 120
Total	450 – 500
Figures in millions of dollars

• With these investments, it is expected to drill between 125 and 135 development wells, from 11 to 15 exploratory wells, and between 15 and 25 workover wells.

Gabriel de Alba, chairman of the Board of Directors, commented: «In 2017, management fulfilled its corporate strategy of generating value rather than volumes. As a result, Frontera is now positioned to grow in 2018. I want to take this opportunity to thank Barry Larson for successfully leading Frontera during this transformation phase.”.

2017 Results

• The company's average daily net production, after royalties, was 70,082 bpe/d, 32% lower than in 2016 as a result of the termination of the Rubiales contract.
• During 2017, the company added 27 million barrels of oil equivalent to the 2P reserves, which replaced the 105% of the 2P volumes produced that year.
• The value of the 2P reserves increased by 9% compared to the previous year, rising from US$2,300 to US$2,500 million.
• The company drilled 94 development wells and three exploratory wells in 2017, compared to 27 wells drilled in total in 2016.
• The net cash of US$356 million provided by operational activities in 2017 was 397% higher than the cash flow used in operations during 2016.
• The operating EBITDA was US$390 million and was 11% above the US$350 million expected for 2017.
• The cash flow from operations was US$267 million in 2017, 4% higher than the US$257 million of 2016.
• The operating netback increased by 23%, rising from US$17.89/bpe in 2016 to US$22.07/bpe in 2017.
• General and administrative expenses (G&A) were US$105 million in 2017, 27% lower than the previous year.
• Cash and cash equivalents were US$644 million in 2017, representing an increase of 28% compared to the previous year.
• Capital expenditures were US$236 million in 2017, 40% above those in 2016, as a result of the company's interest in investing capital to maintain stable production and reserves.
• In 2017, Fitch Ratings upgraded Frontera Energy's foreign currency issuer default rating to ‘B+’ from ‘B’. It also upgraded the company's senior secured notes rating to ‘BB-‘ from ‘B+’. Similarly, Standard & Poor's upgraded the corporate and issue credit rating to «BB-» from «B+».

“The Board of Directors is excited about the company's direction in 2018, as it seeks to continue creating value for our shareholders. In 2017, management fulfilled its defined strategy of sustainable growth in production, reserves, and cash generation,” concluded de Alba.

More information

medios@fronteraenergy.ca