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Catalyst-backed Frontera to sell PEL power asset for $56 mln

Frontera Energy Corp (TSX: FEC) has agreed to sell its stake in Petroelectrica de los Llanos (PEL), owner of a 260-kilometre power transmission line that supplies power to Columbian oil fields and a pipeline. Frontera will sell the asset to EDEMSA for US$56 million. Most of the proceeds will be used for the company’s proposed buy of Pacific Midstream Ltd for US$225 million. Frontera, a Toronto-based explorer and producer of crude oil and natural gas in Latin America, last year closed a US$500 million restructuring deal with Canadian private equity firm Catalyst Capital Group and other creditors.


Frontera Announces the Sale of Petroelectrica de los Llanos for $56 Million

Additional Value Generated from Non-Core Asset Sale, Proceeds Used for Acquisition of PML

TORONTO, Oct. 26, 2017 /CNW/ – Frontera Energy Corporation (TSX: FEC) (“Frontera” or the “Company”) announces today that it has entered into an agreement to sell its interest in Petroelectrica de los Llanos (“PEL”) to an affiliate of Eléctricas de Medellín – Ingeniería y S.A.S (“EDEMSA”).

Consideration for the sale will be $56 million in cash, of which $50 million will be used as the first payment to the International Finance Corporation and related parties (the “IFC Parties”), in connection with the purchase of the IFC Parties’ common shares in Pacific Midstream Limited (“PML”) (the “IFC Transaction”). Further details on the IFC Transaction can be found in the Company’s press release dated October 16, 2017.

PEL owns a 260-kilometre power transmission line with 192 MW of authorized electricity demand which supplies power to the Rubiales and Quifa oil fields and the Oleoducto de los Llanos (“ODL”) pipeline. The disposition of PEL is not expected to result in any material change to the power consumption costs for the Company at Quifa or for the ODL.

The sale of PEL represents another non-core asset disposition for Frontera. Within the past 12 months, Frontera’s disposition of non-core assets has resulted in ~$148 million of cash proceeds, a reduction in exploration or environmental commitments of ~$147 million and the elimination of ~$52 million in stand-by letters of credit commitments.

Gabriel de Alba, Chairman of Frontera, commented, “We continue to execute on non-core asset sales such that proceeds can be used for more strategic initiatives while maintaining a strong cash position on our balance sheet.”

Barry Larson, Chief Executive Officer, commented, “Our Corporate Development team continues to be able to generate value from assets whose value is under appreciated by the market. This is the second step in a series of transactions expected to result in lower transportation costs and more flexible transportation options for the Company in the future.”

Jorge Fonseca, Vice President of Corporate Development, commented, “We would like to congratulate EDEMSA who was the successful bidder in our competitive process for PEL. We continue to evaluate all our assets in an effort to help reduce the discount between our core 2P reserves value and the Company’s enterprise value.”

About Frontera:

Frontera is a Canadian public company and a leading explorer and producer of crude oil and natural gas, with operations focused in Latin America. The Company has a diversified portfolio of assets with interests in more than 25 exploration and production blocks in Colombia and Peru. The Company’s strategy is focused on sustainable growth in production and reserves and cash generation. Frontera is committed to conducting business safely, in a socially and environmentally responsible manner.

The Company’s common shares trade on the Toronto Stock Exchange under the ticker symbol “FEC”.

For further information: Grayson Andersen, Corporate Vice President, Capital Markets, +57-314-250-1467,,

Photo courtesy of Petroelectrica de los Llanos SA