Frontera Energy Unveils Major CAD$40.5 Million Share Bid

Frontera Energy Corporation Initiates Substantial Issuer Bid

Frontera Energy Corporation (TSX: FEC) has launched a substantial issuer bid (the "Offer") to purchase up to 3,375,000 of its common shares at a purchase price of CAD$12.00 per share. This offer totals CAD$40,500,000 (approximately US$30,000,000). The initiative aims to enhance shareholder value and encourage participation from the company's shareholders.

Offer Overview and Shareholder Benefits

Assuming full participation from shareholders, this initiative could lead to a distribution of CAD$0.48 per share, translating to a 6.6% yield based on the stock’s value before the offer announcement. Already this year, Frontera Energy has successfully returned over US$52 million to its stakeholders through dividends, share buybacks, and bond repurchases.

Commencement and Details of the Offer

The Offer is set to begin on September 11, 2024, and will remain open until 5:00 PM on October 17, 2024, unless extended. Shareholders can choose the number of shares they wish to tender to the Offer, allowing flexibility in participation.

Funding and Payment Options

Frontera will fund the share repurchases with available cash, with the payment made in Canadian or US dollars. The price reflects the company’s commitment to its shareholders and includes an option for them to elect the currency they prefer for their payments.

Strategic Purpose Behind the Offer

This substantial issuer bid is part of Frontera’s ongoing strategy to maximize shareholder value. The board believes that the Offer represents an efficient channel for returning capital, especially following the positive results observed from capital distributions in recent quarters.

Previous Share Performance

Before announcing the Offer, on the last trading day, the stock closed at CAD$7.25 per share. The Offer could provide significant returns for shareholders who choose to participate, further bolstering investor confidence in Frontera's strategy and financial health.

Additional Initiatives and Future Outlook

As part of its strategic approach, Frontera is also considering additional dividends and other initiatives to benefit shareholders in the future. The company is committed to maintaining a strong financial position while proactively engaging in practices that return value to its investors.

Conditions and Tender Process

The Offer is optional, meaning shareholders can decide whether or not to participate. For those who do opt to tender, the process involves selecting how many shares to bring forward at the stated purchase price. Shares that are not bought will be returned to shareholders without penalty.

Financial Impact and Capital Adaptations

Furthermore, the company has re-evaluated its estimated “paid-up capital” to be CAD$14.98 per share, reflecting its commitment to responsible financial practices. This adjustment signals a dedication to transparency and accountability following a settlement related to prior structuring processes.

About Frontera Energy

Frontera Energy is a Canadian public enterprise engaged in oil and gas exploration, production, and sale within South America. The company’s diverse portfolio includes interests in 22 exploration and production blocks, affirming its role as a key player in regional energy markets. Frontera values responsible and ethical conduct in its operations while working to deliver sustainable value to its shareholders.

Frequently Asked Questions

What is the total amount of the issuer bid?

The total amount offered by Frontera is CAD$40.5 million (approximately US$30 million).

When does the issuer bid commence?

The issuer bid commences on September 11, 2024, and will remain open until October 17, 2024.

What payment options are available for shareholders?

Shareholders can select to receive payments in either Canadian or US dollars.

Is participation in the issuer bid mandatory?

No, participation in the issuer bid is optional for shareholders.

What is the estimated paid-up capital per share?

The estimated paid-up capital is re-determined to be CAD$14.98 per share.

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