Frontera Energy

Frontera was born on June 12, 2017 as a result of the restructuring process under the Canada Creditor's Arrangement Act (CCAA), developed by Pacific Exploration & Production (formerly Pacific Rubiales Energy Corp.).

In the framework of this process, in April 2016, Pacific Exploration & Production signed an agreement with Catalyst Capital Group Inc. to carry out a financial restructuring with the support of a committee compound of bondholders and some of the lenders.[2]

This reorganization ended on November 2, 2016 and contributed to a new strategic approach, a positive cash flow, a robust balance sheet and significantly reduced accounts payable.[3] Among the main changes implemented with the restructuring were:

At the end of the restructuring process, Frontera Energy Corp. adopted the motto “Avanzar es el camino”, due to the transformation that the company had as a result of this process. The new name responds to new corporate values: integrity, respect, commitment and sustainability.

Frontera Energy has a presence in Colombia, Ecuador, Guyana and Peru. In 2019 the company has reported an average production of 71,197 barrels of oil equivalent (bpe / d).[5]

The company has more than 30 blocks in Colombia, where it concentrates 90% of the operations[6], mainly in the Llanos Orientales basin, where its main fields are located: Quifa, Guatiquía and Cubiro.[7]

Frontera Energy is the second largest hydrocarbon producer in Colombia, after Ecopetrol, and the first private in the country. With a net production before average daily royalties of 65,053 in 2019[5], which has remain stable thanks to the management of the decline in mature fields and new discoveries.

On the other hand, the company operates two producing blocks in Peru, Lot 192 which is the largest in the country and Lot Z1 offshore. In 2019 they reported a net production before average daily royalties of 6.144.[5] In the case of Peru, production has been subject to the availability of the NorPeruano Pipeline, which has interrupted its operation several times in recent years.

In Guyana, the CGX company has the Corentyne and Demerara offshore blocks, in which Frontera has 33.3% interest and is planning exploratory activities by the end of 2019.

On March 13, 2019, the consortium formed by Frontera Energy (50%) and GeoPark (50%) reported the adjudication of the Perico and Espejo exploration blocks in the Intracampos Round of Ecuador. The blocks were acquired under an initial exploration contract for four years, with the option of extending the exploration period for two additional years.

For the year ended December 31, 2018, the company received evaluation reports of independent certified reserves for all its assets, with total net 2P reserves of 154.9 million barrels (24.6 million cubic metres) of oil equivalent.[8]

Due to a new vision of sustainable growth and high valuation of relations with interest groups, the company developed a sustainability model with six corporate commitments11:

• Operate with excellence and ensure the health and welfare of employees
• Act with coherence and transparency
• Work in harmony with the environment
• Contribute to the sustainable development of communities
• Develop the talent of employees to the maximum professional and personal potential, and promote respect for human rights
• Promote a sustainable supply chain

One of the main focuses of Frontera Energy is to build trust for its investors and the general public, and ensure sustainable development in their businesses, always with ethical conduct. To contribute with this purpose, the company has the following alliances:

Former Pacific Rubiales has been the focus of various controversies over the years, ranging from allegations of collusion with paramilitary death-squads, suppression of labor rights, manipulation of stock prices, and production figures, besides harassment of journalists through ad revenue pressure upon media companies to drop negative coverage.[9] In September 2011, workers at Pacific Rubiales went on a violent strike over wages in Rubiales.[10] Pacific Rubiales, who owned a 50% stake, suspended explorations for oil in Putumayo.[11][12]

It was alleged that paramilitary forces took some of that land by illegal means before transferring ownership over to Kappa Energy, a company that Pacific Rubiales had acquired in 2008. (The total reserves associated with Kappa Energy represented only a fraction of Pacific Rubiales total).[12] The complaints go back to 2001; the prosecution claimed that the real owners of the land were forcefully displaced. The defence called the land transfer agreements valid and disputed the validity of their claims (only one of them actually lived on the land). Working conditions were also criticized with as many as twenty people living in one tent, according to journalist Alfred Molano in a September 25, 2011 article in the El Espectador.[9][13]

In 2012 the company came under criticism for beginning oil exploration activities on land inhabited by the Matsés indigenous people of Peru.[14] It was argued that the deforestation of hundreds of seismic testing lines and the drilling of test wells would threaten water sources depended upon by the tribe, and that the activity would also risk exposing uncontacted tribes in the surrounding areas to disease.[15]