Frontera Energy Corporation

Good morning, my name is Tracey and I'll be your conference facilitator today. Welcome to the Frontiera Energy's third quarter 2021 operating and financial results conference call. All lines are currently on mute to prevent any background noise. This call is scheduled for 60 minutes. I would like to remind you that this conference call is being recorded today and is also available through the audio webcast on the company's website. After the speaker's remarks, there will be time for questions. Analysts and investors are reminded that any additional questions can be directed to the company at ir.fronterienergy.ca. This call contains forward-looking statements which reflect the current expectations or beliefs of the company based on the information currently available. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the company to differ materially from those discussed in the forward-looking statements. certain material assumptions were applied in formulating such forward-looking statements. These assumptions and factors could cause actual results or events to differ materially from current expectations as disclosed in the company's Q3 MD&A, released November 3rd, 2021, under the Heading Risks and Uncertainties and under the Heading Risk Factors and elsewhere in the company's annual information form dated March 3rd, 2021. Any forward-looking statement speaks only as of the date on which it is made, and the company disclaims any intent or obligation to update any forward-looking statement. I would now like to turn the call over to Mr. Gabriel de Alba, Chairman of the Board of Frontera Energy.

Thank you, Operator, and thank you, everyone, for joining today's conference call to review Frontera's third quarter operating and financial results. Joining me on today's call are Orlando Cabrales, Frontera's Chief Executive Officer, Alejandro Pinheiros, Frontera's Chief Financial Officer. Also available to answer questions at the end of the call, we have Victor Vega, VP of Field Development, Reservoir Management and Exploration, and Ivana Arevalo, VP of Operations. Let me begin my remarks by highlighting that Frontera continues to make significant progress on its key strategic and operating priorities. Frontera is tightening and increasing its full-year operating EBITDA guidance from 325 to 375 million to now 360 to 380 million dollars. The company saw positive production growth momentum throughout and subsequent to the end of the quarter. Frontera is also reaffirming its year-end exit rate of over 40,000 barrels of oil equivalent per day. Frontera's production on November 2, 2021, was approximately 38,400 barrels per day. Frontera and its majority-owned subsidiary and joint venture partner, CGX, has put the Kiowa 1 well in the quarantine block in offshore Guyana. As of November 1, 2021, close to 78% of the plant footage has been drilled, and we will be moving to the three main geological targets. The joint venture continues to progress towards the total debt target in one of the most exciting exploration wells of 2021 and a potentially transformational catalyst for Frontera and CGX. Talking about other key strategic developments, subsequent to the end of the quarter, the conciliation agreement between Frontera, Senate, and Bicentenario was approved pending formalities. The approval fully resolves all outstanding transportation disputes in Colombia. It also removes the company's largest contingent liability. This opens the door for other strategic opportunities as we look to unlock value. The signators to the conciliation agreement are awaiting formal notification and documentation from the administrative tribunal of their decision. Once received, Frontera, Senate, and Bicentenario will complete the final steps and implement the settlement agreement. These are extremely positive developments for Frontera and its shareholders and reflect the significant progress that the company continues to make. Frontera is working to unlock some of the parts value from its production, exploration, and infrastructure assets. I will now turn the call to Orlando Cabrales, Frontera's CEO, and our CFO, Alejandro Pinheiros, who will share their views on our third quarter results. Orlando, please.

Thank you. Thank you, Gabriel, and good morning, everyone. Frontera delivers solid financial and operational results in the third quarter, including delivering net income of $38.5 million. Compared to the second quarter, Frontera production increased 2%, Our operating net back per barrel increased 15%. Our net sales realized price increased 7%. The majority of the company's hedge ceilings from the second quarter have now rolled off, providing upside exposure to brand pricing. Transportation costs per barrel also decreased 8%. and production costs per barrel decreased 2.4%. Frontera also repurchased for cancellation 3.1 million shares for approximately $17 million. Operationally, the company drilled 15 wells and completed 27 work orders and well services during the quarter. At Kifan, the company drilled a new injector well, which increased water handling capacity and production. At CP6, we grew production to approximately 5,000 barrels per day. At the La Belleza discovery on BIM-1, the joint venture expects early gross production of 2,400 BOE per day to start in November of this year. In Ecuador, environmental licensing is complete. and road construction is underway in advance of spotting the Handaya One Exploration Well in the Perico Block in early December of this year. Subsequent to departure, Frontera sold its interest in Maureo and Prom Colombia, reducing work commitments by $17.2 million, streamlining its portfolio and exploration commitments and focusing on its core assets. Frontera also acquired approximately 45 million CGX common shares in connection with CGX rights offering, increasing Frontera's ownership in CGX to 76.98% on a non-diluted basis. I will talk about all these activities in more detail in a minute. But first, let me spend a few moments discussing the potentially transformational Kawa 1 well in offshore Guyana. Frontera, a majority-owned subsidiary and co-venture CGX, commenced drilling operations on the Kawa 1 exploration well on August 22nd of this year. Operations have proceeded on schedule and comprehensive planning by the joint venture has resulted in effective contingency planning and a final well plan and design that has allowed the well to progress without a major individual setback to date. Close to 78% of the plan footage has been drilled and the three main geological targets of the Kawawan well remain to be drilled. case and evaluated with current expectations on reaching total death consistent with the previous public disclosure of December 2021. Frontera and CGX hold over 1.4 million gross acres in the Guyana-Suriname Basin. Additional drill-ready prospects have been identified in the North Quarantine Area, and several exploration leads are being matured. Now I would like to discuss our Colombian operations. As Gabriel mentioned earlier, production average is 36,422 BOE per day, up to 2% compared to the prior quarter. The company continues to expect a year-end exit rate of over 40,000 barrels per day. Frontera's daily production on November 2nd was approximately 38,400, and the company's year-to-date average to November 2nd is approximately 37,600. IGAR production quarter over quarter was a result of production growth in the CP6 and KIFA blocks resulting from water handling improvements during the third quarter. Currently, the company has three drilling rigs and six work-over rigs active at its KIFA, Coralillo, and Abanico operations. In the third quarter of the year, the company drilled 15 wells and completed 27 work-overs and well services. Year-to-date, the company has drilled 28 wells and completed 86 work-overs and well services. At Kefa, current production is approximately 16,300 barrels per day, including both Kefa and Kahua. Frontera drilled one new injector well at Kefa and converted one inactive well into an ejector well, which the company expects will contribute to increased production volumes from the block through year end as water disposal volumes increase. Year to date, Frontera has drilled 13 development wells at Kefa, and the company expects to drill an additional 10 development wells in the fourth quarter. At CP6, current production is approximately 5,000 barrels per day due to continued drilling and construction of additional water handling facilities. At Guayaquil, the company successfully completed the Coralillo 4 and Coralillo 5 wells in the field, which are producing over 720 barrels per day. A third well in Coralillo, Coralillo 9, is currently being completed. On bin 1, the Planadas 1 exploration well has been drilled to a measured depth of 13,700 feet. Gas shows were encountered during drilling, and a detailed logging program is now underway to identify zones for testing. At La Belleza Discovery on BIM-1, the JV expects early gross production of 2,400 BOE per day, consisting of 1,400 barrels per day of light crude oil and 6 million cubic feet per day of conventional natural gas to commence in November of this year. In Ecuador, environmental licensing is complete and road construction is underway in advance of spotting the Handaya One Exploration Well in the Perico Block in early December 2021. This is the first well to be drilled in a block awarded in the Intracampus Bit Round back in 2019. Also in the Espejo Block, 3D seismic acquisition of 60 square kilometers is expected to start also in the fourth quarter of the year. I would now like to turn the call over to Alejandro Piñeros, Frontera Chief Financial Officer, to discuss our third quarter financial results.