Enters into a Take-or-Pay Agreement with Ecopetrol for LNG Regasification Services for 126 MMcfd, Increasing to 300 MMcfd After Two Years
Enters Into Contract For The Lease of a Floating Storage and Regasification Unit, Including Related Operations And Maintenance Services
Frontera's LNG Project is Expected to Significantly Contribute to Colombia's Gas Supply and the Provision of Energy Security to The Country
Announces Executive Leadership Transitions and Changes to the Board of Directors
CALGARY, AB, June 1, 2026 /PRNewswire/ - Frontera Energy Corporation ("Frontera" or the "Company") (TSX: FEC) today formally became a fully focused, pure-play energy infrastructure company following the completion of the divestiture of its Colombian exploration and production assets to Parex Resources Inc. ("Parex") through its wholly-owned subsidiary Parex AcquisitionCo Inc. With the divestiture complete, Frontera is uniquely positioned as a focused infrastructure platform within Colombia's energy value chain anchored by the robust, long-term, predictable cash--flow generation from its ownership in Oleoducto de Los Llanos Orientales S.A. ("ODL") and a portfolio of strategic projects bringing additional growth in its 99.97% owned subsidiary, Sociedad Portuaria Puerto Bahía S.A. ("Puerto Bahía"), which together provide a differentiated value proposition in the infrastructure space.
Puerto Bahía has entered into a take-or-pay agreement with Ecopetrol S.A. ("Ecopetrol"), pursuant to which Puerto Bahía would provide integrated logistics and liquefied natural gas ("LNG") regasification services in Cartagena, Colombia. The agreement is to be developed in two phases, with initial regasification of 126 MMcfd starting in 2027, increasing to 300 MMcfd after the first two years.
In order to fulfill the contract and satisfy additional demand needs, Puerto Bahía entered into a contract with a US based company which is one of the world's largest Floating Storage and Regasification Unit ("FSRU") providers and operators, for the lease of a FSRU and the provision of related operations and maintenance ("O&M") services. The agreement provides Puerto Bahía with access to an FSRU with LNG regasification capacity of 500 MMcfd beginning in 2027 for an initial term of seven years, extendable for an additional five to eight years.
The take-or-pay agreement with Ecopetrol represents a committed, offtake volume intended to underwrite the FSRU lease contract. The project has meaningful upside through potential incremental third-party demand, supported by Colombia's growing natural gas supply deficit, weather-related supply pressures associated with El Niño conditions, and the additional regasification capacity expected to be provided by the contracted FSRU.
Gabriel de Alba, Chairman of the Board of Directors, Frontera, commented:
"Frontera has evolved into a focused energy infrastructure company at a critically important time for Colombia and the broader energy sector. The ODL pipeline, one of Colombia's most important energy infrastructure assets, provides stable and predictable cash generation, while Puerto Bahía represents a strategically located, difficult-to-replicate infrastructure platform with significant expansion potential. Together with a strong balance sheet, these assets position the Company to deliver a compelling combination of resilient cash flows, visible growth opportunities, and long-term value creation.
With approximately $64 million of cash on its balance sheet, expected ODL dividends of approximately $65 million this year, and multiple near-term catalysts supporting the expansion of Puerto Bahía, including the LNG regasification project, which has now entered the execution phase, Frontera is well positioned to capitalize on Colombia's growing energy infrastructure needs. We believe these strengths will enable the Company to preserve financial flexibility, advance value-enhancing growth initiatives, and reinforce its role as a critical participant in Colombia's energy infrastructure sector.
We believe Frontera Infrastructure is uniquely positioned as one of Colombia's leading independent energy infrastructure platforms, delivering sustainable long-term value for shareholders while supporting the country's evolving energy needs."
Orlando Cabrales Segovia, Chief Executive Officer (CEO), Frontera, commented:
"The Puerto Bahia agreements mark an important milestone in the advancement of the LNG project and further reinforces the strategic role of Puerto Bahia within Colombia's energy infrastructure. Through our partnership with Ecopetrol and one of the world's largest FSRU providers and operators, we are combining Puerto Bahía's established infrastructure and operating capabilities with a proven global LNG platform to provide a reliable and scalable solution to Colombia's growing natural gas supply needs.
We also continue to make meaningful progress across our energy infrastructure projects, including reaching a key milestone in the LPG project with the successful commencement of initial operations, which gives us the capacity to handle up to 10,000 tons per month. We are also evaluating the entry into power generation anchored by our LNG project, in particular, the potential development of a gas fired power plant at Puerto Bahia. At our container business, we also expect further growth beyond the current capacity of approximately 42,000 TEUs per annum. We continue to progress in several near-term growth projects in Puerto Bahia, while advancing long-term value creation for our shareholders.
I want to thank our management team as well as our employees for their valuable contributions over the years, and in particular Mr. Burgos and Mr. Arevalo for their leadership, dedication and service during their time with the organization."
EXECUTIVE LEADERSHIP TRANSITIONS
Mr. Orlando Cabrales Segovia will continue to serve as Chief Executive Officer, providing strategic continuity as the Company begins its next chapter following the divestiture to Parex. Ms. Alejandra Bonilla will likewise remain in her role as General Counsel & VP Legal, ensuring continued legal and governance continuity throughout and beyond the transition. Ms. Renata Campagnaro will transition to the role of VP, Commercial and Projects, effective today. In this capacity, she will be responsible for overseeing commercial strategy and project execution across the Company's core business. Ms. Campagnaro brings more than 40 years of experience in the oil and gas industry and has extensive expertise in marketing and supply operations, including O&G terminals.
Effective today, Mr. Andrés Sarmiento has been appointed Chief Financial Officer. Mr. Sarmiento brings more than 15 years of leadership experience across the energy, infrastructure and public policy sectors. He most recently served as VP, Corporate Sustainability & People at Frontera, where he gained broad exposure to corporate strategy, business transformation and strategic initiatives. He previously served as Secretary General of Naturgas, (Colombia's natural gas business association), where he also acted as Interim President. In addition, he served as Economic Advisor to the Colombian Minister of Energy, supporting energy policy and strategic energy initiatives. Mr. Sarmiento is an economist and holds a master's degree in Energy, Mining and Finance from Imperial College London.
Mr. Rene Burgos Diaz and Mr. Ivan Arevalo are departing from their positions as Chief Financial Officer and VP of Operations, respectively, following the closing of the strategic transaction with Parex. Frontera thanks them for their leadership, dedication and contributions during their time with the organization, and wishes them all the best in their future endeavors. Mr. Burgos will support an orderly transition to this next phase.
APPOINTMENT OF ROCCO DIPUCCHIO TO THE BOARD OF DIRECTORS
Mr. Orlando Cabrales Segovia has decided to step down from the Board of Directors in connection with his transition to lead the Company's infrastructure business. Effective today, Frontera is pleased to welcome Mr. Rocco DiPucchio as its newest member of the Board of Directors, replacing Mr. Cabrales. Mr. DiPucchio is Chief Operating Officer & Managing Director at The Catalyst Capital Group Inc., holds a Juris Doctor from Osgoode Hall Law School at York University and was previously a senior partner at Lax O'Sullivan Lisus Gottlieb LLP, where he specialized in corporate and commercial litigation. His appointment reflects the Company's continued commitment to strong governance and strategic leadership.
The composition of the remainder of the Board of Directors remains unchanged.
BUSINESS HIGHLIGHTS
ODL Pipeline Investment (35% equity ownership)
Frontera owns a 35% equity investment in the ODL pipeline, which connects Rubiales, Quifa, Caño Sur, Llanos-34, and other blocks to the Monterrey and Cusiana Stations in the department of Casanare, Colombia.
ODL is a key midstream infrastructure asset in Colombia, transporting approximately 30% of the country's oil production and serving the Llanos basin, which holds roughly 70% of Colombia's proven crude oil reserves. Supported by its strategic location, established operating track record and resilient cash flow profile, ODL represents a very high-quality infrastructure asset with a strong market position and the potential to capture additional revenue opportunities within its area of influence.
Puerto Bahia (99.97% equity ownership)
Frontera owns a 99.97% equity interest in Puerto Bahía, a strategically located multi-purpose maritime and logistics terminal in Cartagena, Colombia, adjacent to the Bocachica access channel in Cartagena Bay.
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