Frontera Energy has signed a definitive agreement to sell Frontera Petroleum International Holdings, consisting of its Colombian exploration and production (E&P) assets, to Geopark, with the equity valued at up to $400m.
The agreement is being conducted through a plan of arrangement under the Business Corporations Act in British Columbia, Canada.
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The deal is expected to conclude in the second half of 2026, subject to shareholder and regulatory approvals.
It includes an immediate payment of $375m upon closing, with an additional $25m contingent on achieving certain development milestones.
Upon completion, Frontera plans to distribute approximately $370m to its shareholders, pending approval.
Frontera Board of Directors chairman Gabriel de Alba said: “The board and management have focused on maximising shareholder value, unlocking approximately $1.1bn, including over $480m through dividends and buybacks.
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By GlobalData“We have also positioned the company to unlock further value through operational, strategic and debt reduction initiatives. The transaction represents a significant step and the culmination of this multi-year, shareholder-focused strategy to surface and monetise value in the E&P business.”
Geopark will assume Frontera’s outstanding debts, including $310m in unsecured notes due in 2028 and $80m from a prepayment facility with Chevron.
The transaction values Frontera’s Colombian assets at approximately $622m when considering both cash payments and assumed liabilities.
After the divestment, Frontera will maintain its infrastructure operations, supported by its stakes in ODL and Puerto Bahía, along with holdings in Guyana and various other markets outside Colombia.
The Puerto Bahia facility serves as a central operations hub, with projects under way to boost cash flow potential, including liquefied petroleum gas (LPG) import facilities and a liquefied natural gas (LNG) regasification project.
Meanwhile, ODL is a key midstream asset that transports a substantial portion of Colombian oil production.
These operations generated an estimated distributable cash flow of around $77m in 2025.
The company stated that the equity purchase price is 25% higher than the 90-day volume-weighted average price and 18% above the current share price.
Frontera CEO Orlando Cabrales said: “Following an exhaustive review of the company’s alternatives, we believe this transaction crystallises value for shareholders at an attractive premium for our Colombian E&P assets, converting exposure to oil prices into cash, and retaining upside through a stand-alone Infrastructure Business.
“The additional Infrastructure Business upside will come from our interest in ODL and Puerto Bahía as the backbone of our post‑transaction Frontera.
“Our Infrastructure Business already generates distributable cash flow of approximately $77m (2025E), supported by a stable dividend stream from ODL and an attractive growth profile at Puerto Bahía, including LPG import facilities, an LNG regasification project and containerised cargo expansion.”
In August 2025, Frontera reached an agreement to sell its 50% working interest in the Perico and Espejo blocks in Ecuador for a cash consideration of $7.8m.
