Sale to Parex shifts company focus to midstream assets and LNG.

Frontera Energy Corporation (TSX: FEC) announced a net loss from continuing operations of $663 million USD for the fourth quarter of 2025. This figure includes a non-cash impairment of $603 million USD related to the divestment of the company’s Colombian exploration and production (E&P) portfolio and a $17 million USD impairment regarding its Guyana interest. The company has scheduled a special meeting of shareholders for April 30, 2026, to vote on the divestiture of these assets to Parex Resources Inc. (TSX: PXT).

The definitive agreement for the divestiture establishes a firm value of approximately $750 million USD. The transaction includes up to $525 million USD in equity consideration. Following the completion of the sale, Frontera Energy Corporation intends to distribute approximately $470 million USD to shareholders, which equates to approximately CAD $9.18 per share. This distribution includes a $25 million USD contingent payment.

The divestment marks a strategic shift for the Calgary-based company as it transitions into an infrastructure-focused business model. The new structure is anchored by interests in the Oleoducto de los Llanos Orientales S.A. (ODL) pipeline and the Sociedad Portuaria Regional Puerto Bahía S.A. maritime terminal. For the full year of 2025, the infrastructure segment reported an adjusted EBITDA of $116.6 million USD and a distributable cash flow of $76.7 million USD.

“Frontera now enters its next phase as a more focused, cash-generative infrastructure company, well positioned to deliver durable returns.” — Gabriel de Alba, Chairman of the Board of Directors, Frontera Energy Corporation

A central component of this new strategy is the development of a potential liquefied natural gas (LNG) regasification project in partnership with Ecopetrol S.A. (NYSE: EC, BVC: ECOPETROL). Puerto Bahía has secured a take-or-pay agreement with Ecopetrol S.A., subject to certain conditions, for the project. The initiative is planned in two phases, starting with an initial capacity of approximately 126 million cubic feet per day (MMcfd), with projections to reach at least 300 MMcfd by 2029.

In terms of operational metrics for 2025, Frontera reported an average production of 39,011 barrels of oil equivalent per day (boed). The company recorded an operating EBITDA of $308 million USD for the year. Production costs averaged $9.23/boe, while energy costs were $5.49/boe and transportation costs reached $12.00/boe.

The year-end independent reserves assessment, conducted by DeGolyer and MacNaughton Corp, placed the company’s gross reserves at 94.4 million Boe for the 1P category and 133.8 million Boe for the 2P category. All of the company’s booked reserves as of December 31, 2025, are located within Colombia.

On the environmental and social front, the company reported that 70,162 tons of CO2 equivalent were absorbed through environmental compensation areas in 2025. Additionally, 35% of operational water was reused during the same period. The company also noted a total of $95.1 million USD in purchases from local goods and services suppliers.

Upon the anticipated closing of the arrangement in the second quarter of 2026, Frontera Energy will retain its midstream assets in Colombia and certain non-Colombian interests, including those in Guyana. The company expects to allocate $25 million USD from the sale proceeds to further fund its infrastructure business and strategic growth projects.

Frontera must pay a $25 million USD breakup fee to Geopark.

Frontera Energy Corporation (TSX: FEC) has entered into a definitive arrangement agreement to divest its Colombian upstream exploration and production (E&P) portfolio to Parex Resources Inc. (TSX: PXT) for a total firm value of approximately $750 million USD. The transaction follows the termination of a previous agreement with GeoPark Limited (NYSE: GPRK). Frontera opted for the Parex proposal after the Calgary-based independent producer offered $525 million USD in equity consideration, a $125 million USD increase over the prior GeoPark bid. As part of the transition, Frontera has paid a $25 million USD breakup fee to GeoPark.

The $525 million USD equity consideration includes an immediate $500 million USD cash payment upon closing and a $25 million USD contingent payment. The latter is dependent on the execution of a contractual amendment or binding agreement to extend the term of the Quifa Association Contract within 12 months.

Beyond the cash equity, Parex will assume $390 million USD in existing Frontera liabilities. This includes $310 million USD in 2028 Senior Unsecured Notes and an $80 million USD prepayment facility with Chevron Products Company, a subsidiary of Chevron Corporation (NYSE: CVX).

Following the close of the deal, Frontera intends to distribute approximately $470 million USD to its shareholders, which equates to roughly $9.18 CAD per share based on current exchange rates and outstanding share counts. This distribution is subject to shareholder approval and the successful completion of the transaction.

Frontera is retaining its exploration interests in Guyana.

Shift to Infrastructure Focus

Upon completion, Frontera will pivot its corporate strategy to focus exclusively on energy infrastructure. Its remaining portfolio will be anchored by two primary Colombian assets:

• A 35% equity interest in Oleoducto de los Llanos Orientales S.A. (ODL), a critical crude oil pipeline.
• A 99.97% equity interest in Sociedad Portuaria Puerto Bahía, a multipurpose port facility in Cartagena.

The company will also retain its exploration interests in Guyana. Frontera’s infrastructure division generated approximately $77 million USD in distributable cash flow in 2025. Post-transaction, Frontera expects to maintain $50 million USD in cash reserves to fund growth projects, including a potential Liquefied Natural Gas (LNG) regasification project in partnership with Ecopetrol S.A. (NYSE: EC; BVC: ECOPETROL).

Orlando Cabrales, CEO of Frontera, noted that Parex is currently the largest independent operator in Colombia and a pre-existing partner in the VIM-1 block, which suggests operational continuity for the assets and employees involved.

The independent members of Frontera’s Board of Directors have unanimously recommended the deal. Major shareholders The Catalyst Capital Group Inc. and Gramercy Funds Management LLC, who collectively hold approximately 53% of Frontera’s outstanding shares, have signed support agreements to vote in favor of the arrangement.

Timeline and Approvals

The transaction is structured as a plan of arrangement under the Business Corporations Act of British Columbia. It requires the approval of at least two-thirds of the votes cast by Frontera shareholders at a forthcoming special meeting.

The deal is also subject to approval by the Supreme Court of British Columbia and relevant regulatory bodies in both Canada and Colombia. Parex will fund the acquisition through existing cash, credit facilities, and an underwritten financing commitment from Scotiabank (TSX: BNS; NYSE: BNS). Closing is anticipated in the second quarter of 2026.

Citi (NYSE: C) served as the financial advisor to Frontera, while BMO Nesbitt Burns Inc. provided a fairness opinion. Legal counsel was provided by Blake, Cassels & Graydon LLP and McMillan LLP.

Above photo: Frontera Energy’s Quifa field Meta Colombia. Photo credit: Frontera Energy.

The Board of Directors of Empresas Públicas de Medellín (EPM) approved a budget of $29.8 trillion COP for the 2026 fiscal year during its session on December 2, 2025. The budget is intended to guarantee the continued provision of public utility services—including energy, water, and natural gas—while addressing challenges related to regulatory demands, climate variability, the energy transition, and increasing consumer demand.

The budget allocates resources across all of EPM’s business segments, which include Power Generation, Transmission and Distribution, Gas, Water Provision, and Wastewater. The overall spending plan prioritizes projects focused on modernizing infrastructure, expanding service coverage, and optimizing operational efficiency.

Budget Distribution and Key Investments

The 29.8 trillion COP total budget is divided across four main areas, with investments receiving the largest allocation:

• Investment Expenses (48%): 14.1 trillion COP
  • Infrastructure investments: 4 trillion COP.
  • Long-term contracts for commercial operation and maintenance (registered as investment under current budgetary rules): 6 trillion COP.
  • Assets and inventory related to service provision and investments, provisions, and others: 3.2 trillion COP.
  • Capitalizations and other items: 907 billion COP.
• Functioning Expenses (28%): 8.5 trillion COP
  • This includes transfers to the District of Medellín totaling 2.4 trillion COP, taxes and contributions to the national and territorial governments totaling 1.2 trillion COP, and personnel expenses amounting to 1.6 trillion COP.
• Commercial Operation Expenses (10%): 3.1 trillion COP
  • This covers the purchase of energy, natural gas, and other inputs required to guarantee public service delivery.
• Debt Service (11%): 3.3 trillion COP
• Final Cash Availability (3%): 800 billion COP

Of the 4 trillion COP earmarked for infrastructure investments, 1.3 trillion COP is designated for the second phase of the Hidroituango Hydroelectric Project, a significant infrastructure development for the nation’s energy stability.

Financing and Operational Focus

The 2026 budget is projected to be financed primarily through 18.3 trillion COP (62%) in current revenues from services provided (energy, gas, water, and wastewater). This will be supplemented by 3.5 trillion COP (12%) from loans, with the remaining 26% sourced from dividends received from subsidiaries, accounts receivable recovery, and the initial cash balance.

The budget focuses on specific initiatives across EPM’s segments:

• Power Generation: Includes the expansion of generation infrastructure and the implementation of a master plan for fire protection at generation plants. Resources are also allocated for the modernization of the Guadalupe-Troneras power stations.
• Energy Transmission and Distribution: Focuses on infrastructure expansion and maintenance, replacement of cables and transformers across all voltage levels, and the control of non-technical energy losses.
• Water and Wastewater: Key projects include the Orfelinato – Villa Hermosa Pumping System, the expansion of the Yulimar circuit, and the modernization of the Ayurá water treatment plant. The budget also funds the construction, intervention, and repair of water and sewer networks.
• Gas: Initiatives include optimizing operations through the utilization of biogas from the La Pradera facility.

John Maya Salazar, General Manager of EPM, stated that the budget is aimed at enhancing operational efficiency, strengthening resource management, and ensuring service quality within a context of regulatory, climatic, and market challenges.

Headline photo courtesy EPM

Colombian propane gas distributor Colgas was recognized at the 2025 edition of Xposible Colsubsidio with the “Companies that Transform Society” award, a distinction granted to organizations with business models that integrate sustainability and social development. The recognition specifically highlighted the company’s corporate purpose and the execution of its “Empowering the Entrepreneurial Spirit” (Potenciar el Espíritu Emprendedor) project, an initiative designed to strengthen entrepreneurs and strategic allies within its value chain.

The 2025 iteration of Xposible Colsubsidio, a program led by Colsubsidio, received a total of over 500 submissions from business initiatives nationwide. The Colgas initiative was selected for its demonstrated capacity to generate value, promote business practices that meet social responsibility criteria, and contribute to the nation’s productivity.

Unusual for companies in Latin America, Colgas pledges to pay small business suppliers within 7 days of invoicing.

Didier Builes, General Manager of Colgas, indicated that the recognition validates the company’s corporate strategy. “At Colgas, we work to boost the entrepreneurs in our country, offering them concrete tools to grow and transform their businesses. This award motivates us to continue building opportunities that positively impact thousands of Colombian families,” Builes stated.

The “Empowering the Entrepreneurial Spirit” project by Colgas incorporates several strategic actions aimed at the formalization and growth of Small and Medium Enterprises (SMEs). Measures implemented include a program that guarantees payment to SME suppliers within 7 days, as well as financial inclusion initiatives designed to facilitate the sustainability of the small businesses associated with the company.

Furthermore, the program includes the Colgas Corporate University for Entrepreneurs (Universidad Corporativa de Emprendedores Colgas), a training platform that has provided instruction to collaborators and allies in areas such as sales, digital marketing, financial management, safety, and the secure use of Liquefied Petroleum Gas (LPG).

Colgas noted that this award reinforces its strategic positioning as an entity that supports productivity and entrepreneurship in Colombia. The company reaffirmed its focus on developing an ecosystem aimed at generating opportunities for the growth of small and medium businesses in the territories where it operates.