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Highlights

  • Frontera’s Q2 2024 revenue declined 3.6% to USD 279.5 million due to lower consolidated production
  • Net income fell to USD 3.1 million, significantly down from USD 79.8 million last year
  • Frontera plans production growth to 40,000-42,000 boe/d by the end of 2024

Frontera Energy Corporation (TSX: FEC), with a market cap of CAD 680.99mn, is a crude oil and natural gas company based in Canada.

In Q2 2024, the company posted a decline in net revenue at USD 279.5 million compared to USD 289.8 million in Q2 2023 (pcp), reflecting a year-over-year decrease of 3.6%. This reduction was largely attributed to lower consolidated production during the quarter. Additionally, income from operations fell to USD 45.2 million, down 18.7% from the previous year’s USD 55.6 million.

Net income before income tax dropped to USD 29.5 million in Q2 2024, a substantial decrease of 64.2% from USD 82.4 million in pcp. The company faced a net loss of USD 3.1 million, contrasting sharply with a net income of USD 79.8 million in Q2 2023. This shift was primarily driven by increased income tax expenses.

Recent Business Update

Frontera has recently announced a dividend of CAD 0.0625 per common share. It is slated to be paid on or around October 16, 2024, to shareholders recorded as of the close of business on October 2, 2024.

As of June 30, 2024, the company reported a total crude oil inventory of 1,319,189 barrels, an increase from 1,278,763 barrels as of March 31, 2024. Within this inventory, the total balance in Colombia amounted to 758,794 barrels, which includes 405,789 barrels of crude oil and 353,004 barrels of diluent and other materials.

Company Outlook

Frontera plans to grow production in a range of ~40,000 -42,000 boe/d by the end of 2024. Furthermore, at USD 80/bbl, the company expects to clock an operating EBITDA in the range of USD 400 mn - 450 mn.

Top 10 Shareholders:

The top 10 shareholders of Frontera collectively own approximately 57.57% of the total shares. The largest stake is held by Catalyst Capital Group Inc. at around 41.31% followed by Gramercy Advisors, L.L.C. at about 13.42%.

Price Information

The stock price of FEC has increased by approximately 1.63% over the past week and about 8.44% over the last month. Additionally, the stock is currently trading above the average of its 52-week high of CAD 12.41 and its 52-week low of CAD 7.13.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is October 3, 2024. The reference data in this report has been partly sourced from EODHD/Others.