Frontera Energy Corp. will pivot to a focused infrastructure company after shareholders approved the sale of its Colombian oil and gas production assets to Parex Resources Inc. for an enterprise value of $750 million, a move that includes returning up to $470 million to investors.
"Frontera achieved an important milestone with shareholder approval of the plan of arrangement and return of capital, related to the sale of its Colombian E&P asset to Parex Resources," Gabriel de Alba, Chairman of the Board, said in a statement. "The standalone and refocused Frontera infrastructure business, anchored by its ownership in ODL and Puerto Bahia, generates stable long-term cash flows and provides multiple near-term growth catalysts."
The company reported net income from its continuing infrastructure operations of $13.1 million, or $0.18 per share, for the first quarter of 2026 on revenue of $26.8 million. Adjusted EBITDA from the infrastructure assets was $28.5 million. The divested exploration and production business, now classified as discontinued operations, generated a net loss of $28.5 million in the quarter.
The transaction and strategic shift are intended to unlock significant value for investors, with the company noting the strategy will have unlocked approximately $1.3 billion of capital. Frontera will retain about $50 million in cash to support growth projects, including an LNG regasification project with Ecopetrol. The deal is expected to close in May 2026.
Infrastructure Highlights
Frontera's infrastructure business consists of a 99.97% interest in the Puerto Bahía port and a 35% equity stake in the Oleoducto de los Llanos (ODL) pipeline. In the first quarter, Puerto Bahía generated $12.7 million in revenue, driven by a 109% year-over-year increase in roll-on/roll-off cargo volumes. The ODL pipeline investment contributed $14.2 million to Frontera's income. ODL declared net dividends of $64.7 million to Frontera for 2026.
Discontinued Operations
The assets being sold to Parex produced an average of 36,700 barrels of oil equivalent per day in the first quarter. The operating netback for these assets was $41.79 per boe, up from $28.36 per boe in the prior quarter, benefiting from higher commodity prices.
The sale to Parex marks a significant transformation for Frontera, shifting its focus from energy production to the more stable, cash-flow-generative infrastructure sector. Investors will watch for the completion of the transaction in May and the subsequent distribution of capital, which will serve as the next major catalyst for the company.
This article is for informational purposes only and does not constitute investment advice.
