Frontera Energy Corporation

Good morning, my name is Ludi and I'll be your conference facilitator today. Welcome to Frontera Energy's 3rd Quarter 2024 Operating and Financial Results Conference Call. All lines are currently on mute to prevent any background noise. I would like to remind you that this conference call is being recorded today and is also available through audio webcast on the company's website. Following the speaker's remarks, there will be time for questions. Analysts and investors are reminded that any additional questions can be directed to Frontera following today's call at ir.fronterraenergy.ca. This call contains forward-looking information within the meaning of applicable Canadian securities laws relating to activities, events, or developments the company believes or expects will or may occur in the future. Forward-looking information reflects the current expectations, assumptions, beliefs of the company based on information currently available to it. Although the company believes the assumptions are reasonable, forward-looking information is not a guarantee of future performance. Forward-looking information is 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 information. The company's MD&A for the quarter ended September 30, 2024, and the company's annual information form dated March 7, 2024 and other documents it files from time to time with securities regulatory authorities describe the risks, uncertainties, material assumptions, and other factors that could influence actual results. Any forward-looking information speaks only as of the date on which it is made and and the company disclaims any intent or obligation to update any forward-looking information except as required by law. I would now like to turn the call over to Mr. Gabriel D'Alba, Chairman of the Board of Frontera Energy. Mr. D'Alba, please go ahead.

Thank you, operator.

Good morning, everyone, and welcome to Frontera's third quarter 2024 operating and financial results conference call. Joining me on the call today are Rolando Cabrales, Frontera's CEO, and Rene Burgos, Frontera's CFO. Also available to answer questions at the end of the call, we have Victor Vega, VP Field Development, Reservoir Management and Exploration. Alejandra Bonilla, General Counsel. Ivan Arevalo, VP Operations. And Renata Campanaro, VP Marketing, Logistics and Business Sustainability. Thank you for joining us. Frontera remains focused on the execution of its strategic objectives and priorities. It is upstream, infrastructure, and Guyana business segment. The company's upstream business continues to perform according to plan, overcoming unforeseen social issues during the year. The company is gaining momentum, with crude production ramping up to average over 42,300 barrels per day, so far in the fourth quarter. And the company is targeting fourth quarter average daily production above 42,500 barrels per day. In its stand-alone and growing infrastructure business, the company continues to advance the strategic alternatives review in large areas this year. This process is actively ongoing with a virtual data room open and discussions with interested third parties underway. The company remains particularly excited about the long-term prospects of its Puerto Vallecas and Dry Caibo port facility and its strong pipeline of catalysts, including the Reficar connection, as well as the recently announced LPG input project with its JV partner, Gasco. With respect to its Gajana assets, the company and its joint venture partner remain committed to potential development of the Cronenheim block, as supported by the recent discoveries. While the company remains confident about the exciting potential of the current-time block, it is reviewing all available alternatives to safeguard its interest in the block and Guyana. Turning briefly to Frontera's financial health, I'm pleased to report that subsequent to the quarter, S&P reaffirmed the company's credit rating at B with a stable outlook, reflecting Frontera's strong credit quality and financial position, underpinned by the company's low leverage. The company ended this quarter with a total debt of $531.2 million and a healthy cash position, including restricted cash of $240.3 million. Frontera's solid financial position has supported the company's ability to deliver significant shareholder returns in 2024. Notably, after the quarter and with significant shareholder take-up, the company successfully executed on its 30 million SIDs, which saw over 90% of the company's shareholders participate. Together with the completion of the successful SID, the company has returned more than $53 million to shareholders in 2024, including $11.7 million in quarterly dividends, $3.9 million in declared quarterly dividends, and $7.8 million to the repurchase of its common shares through its NCID for an estimated aggregate yield of 10%. In addition to our quarterly dividend, the company announced yesterday its intentions to commence a new substantial issuer bid of up to $30 million, pursuant to which the company will offer to purchase, for cancellation, a portion of its common shares at a fixed price per share. The terms of the new SIV, including pricing, shall be communicated in due course, and the company expects that the new SIV will be completed in January 2025. Frontera remains committed to unlocking value for its stakeholders, including potential additional dividends, share buybacks, distributions, or bond buybacks, which will be based on the company's results, cash flow generation, and the company's strategic goals. I'd now like to turn the call over to Orlando Cabrales, Frontera's CEO, and Rene Burgos, Frontera's CFO, who will share their views on our third quarter results.

Orlando?

Thank you, Gabriel. Good morning, everyone, and thank you for joining us for today's call. Crontera delivered another strong quarter, generating $16.6 million in net income and $103.2 million in operating EBITDA, in line with our plan, despite lower average rent prices and certain unexpected events that occurred during the quarter. we remain on track to meet our 2024 production and EBITDA guidance. We increase our quarter or quarter average daily production by 2% to 40,616 BOE per day, driven by strong performance from the company's heavy oil assets as we completed successfully drilling campaigns in both the CP6 and Sabanero blocks. and increased water disposal capacity in the CPE6 block, where the company achieved another daily production record reaching 8,810 barrels per day. We increased our light and medium crude oil production, driven by improved performance in Ecuador, and where international activity performed during the first half of the year, which helped maintain light and medium crude production levels. We also increased our natural gas liquid production during the quarter with the completion and startup of the compression facilities expansion and gas injection projects at our BIM-1 block. Following the completion of the BIM-1 gas injection project, natural gas volumes produced at BIM-1 were re-injected reducing natural gas production and sales volumes. And I am very pleased to report that our four-quarter production has averaged 42,300 barrels per day. We invested approximately $82 million in capital expenditures during the quarter, primarily to drill 15 development wells at Kifa, CP6, and Sabajero. At Kifan, the company invested in new flow line facilities for new well production and connection for the Sahara project. Also invested in the development facilities and increasing water handling capacity at the CP6 block. At the B1 block, all pre-drill activities related to civil work for the platform roads were completed for the ERA 1 exploration well. However, exploration drilling activities are expected to resume early next year following delays associated to social issues. Additionally, two new exploration wells were sanctioned for the Cachicamo block, expected to start in the fourth quarter of this year. The company is also engaged in pre-seismic and pre-drilling activities related to social and environmental studies in the Yandex 99 and BIM 46 blocks. In Ecuador, in our Perico block, performed two work hours and one well service to increase production during the quarter. Furthermore, as part of our continuing drive to simplify our business, Frontera and the ANH mutually agreed to terminate Card 1-5 and Card 1-6 blocks exploration contracts due to long-standing social and security restrictions in the contracted areas, reducing the company's exploration commitments by $53 million. In our infrastructure business, ODL continues to deliver strong operational and financial results, generating $68 million of EBITDA for the quarter. Net distributions to Frontera amounted to $12 million during the quarter, totaling $43 million year-to-date. At our Sahara project, we are currently processing approximately 50,000 bottles of water per day and expect to grow water handling capacity to 250,000 bottles by year-end, boosting heavy crude oil production at the Kifa block. I would now like to turn the call over to Rene Burgos, Fronteras CFO.

Thank you, Orlando.

I'd like to take a moment to highlight a few key financial aspects of our third quarter results. For the third quarter, the company recorded a net income of $16.6 million, or 20 cents per share. This quarter net income includes approximately $27 million in income from operations, plus from their shares of income from associates of $13 million from its share of income from ODL, and $6 million in income related to risk management contracts primarily related to our FX hedging positions. These incomes were offset primarily by roughly $18 million in net finance expenses and approximately $10 in income tax expenses, including $4 million in deferred income taxes. Operating EBITDA for the quarter was approximately $103 million. Compared to the prior quarter, our EBITDA was affected by lower realization price and higher transportation costs, partially offset by lower production costs during the quarter. So for this year, Fremdata has generated $311 million in operating EBITDA and remains on track to meet its 2024 consolidated operating EBITDA guidance of $400 and $450 million at $80 barrel Brent average price for the year. From a barrel standpoint, I would like to take a moment to share the key indicators related to our realized prices and cost. During the quarter, we saw weighted average Brent sales prices for Frontera are $77.95 and an average Vascona differential on our export sales of $4.92. For the third quarter, The purchase crude net margin was $3.05, higher than the $2.13 for the prior quarter. The quarter-over-quarter variance was a result of higher dilution needs for our heavy oil assets. Taking a closer look at our operating costs, our production, energy, and transportation costs per barrel for the quarter totaled $8.88, $5.00 and $12.12 respectively. This compares to $10.79, $4.74, and $10.92 in the prior quarter. The decrease in production costs quarter-over-quarter were driven primarily by higher production as well as lower well intervention activity during the quarter. On the energy front, The increase was a result of higher energy use during the quarter due to increased production from our heavy oil assets. On transportation cost, cost increased during the quarter due to trucking and pipeline tariff increases that occurred, as well as higher bonds transported. Our operating net back in the third quarter was $40.59 per VLE, compared with $46.40 per VLE in the prior quarter. The decrease was mainly a result of lower realized prices driven by lower benchmark oil prices, which fell over $6 on a quarter-over-quarter basis. Partially offset by lower royalties, paid in cash, and lower production costs. Unknown participant is now joining. That continues to show cash generation in the third quarter, with cash flows from operations totaling $124 million. including a $90 million tax refund associated with the company's 2023 income tax return and the receipt of $12 million in dividend and capital payments from ODL. On the infrastructure side, adjusted infrastructure EBITDA in the second quarter of 2024 was $26.2 million compared with $27.8 million in the third quarter. The quarter-over-quarter decrease was primarily due to lower liquid volume due in part to severe weather conditions and an increase in cost and G&E expenses in ODL due to inflationary pressures on services and wages in taxation. We expect these conditions to improve during the fourth quarter for both ODL and Puerto Vallarta. ODL volumes transported were 244,000 barrels per day during the third quarter compared to 249,000 in the second quarter, mainly due to lower volumes transported from the Llanos 34 block. As of September 30, 2024, the company reported a total cash position of $240 million, including $206 million in unrestricted cash. Turning now to risk management, our current risk management strategy continues to show how our hedging discipline supports our operations and planning. Frontera uses derivative instruments to manage exposure to all price and effect volatility. On the oil side, the company entered into hedges, successfully securing a 40% hedging ratio until February 2025, protecting against a potential drop in oil prices. For the remainder of 2024, the company has hedges with strike prices between $75 and $78 spread. For 2025, the company has entered into hedges at $70 spread for January and February. Frontera has also entered into foreign exchange rate hedges totaling $220 million, covering 40% of the company's expected peso exposure up to the third quarter of 2025, with puts between 4,100 pesos and 4,200 peso rates.

Apologies for the communication. Alright, we're back.

These changes provide the company with stability and will help mitigate impacts from future fluctuations while allowing the business to deliver on its targets. Finally, I'd like to provide an update on our Stakeholder Value Initiative. Under the current NCID, which commenced on November 21st, 2023, the company has referred to approximately 1.6 million common shares, or just over 2% of our total common shares were standing for cancellation, or approximately 9.5 million after November 7th. From then on, they would file with the PSX a notice of intention to commence a new SID once the current one expires. With respect to our quarterly dividend on October 16th from approximately $3.9 million or $6.25 per share of Canadian to shareholders, together with yesterday's results announcement, the Board declared a quarterly dividend of $6.25 per share of Canadian payable to shareholders of record as of January 3rd, 2025 on around January 17th, 2025. Additionally, the company recently announced the successful completion of its SIP announced in August of this year. The company purchased for cancellation close to 3.4 million common shares for an aggregate consideration of $30 million at a fixed price of $12 Canadian per share. The SIP was widely accepted as shown by the over 90% of the company shareholders participating. Furthermore, Frontera also announced its intention to commence A, new substantial issuer bid through which the company will offer to purchase up to $30 million of its common shares or cancellations at a fixed price. The terms of the new SAB, including price, will be determined in due course and the company expects that it will be completed in January 2025. The SAB will not be conditional upon any minimum number of shares being tendered and will be subject to conditions customary for a transaction of this nature. The company believes this format is the most efficient means to distribute capital to all of our shareholders and look forward to launching this process in a few weeks, next week. I would like to turn the call back now to Orlando.

Thank you, Rene. Before I wrap up today's call, I would like to highlight that during the quarter, Frontera achieved 73% of its sustainability goals for the year. Frontera made purchases from local suppliers that represent around 11% of its total purchases, exceeding our annual goal of 9%. Additionally, our efforts to maintain close and empathic relationships with all of our stakeholders, including our employees, was recognized as Frontera received the Great Place to Work Award and ranked 17th as one of the best companies to work for in Colombia. Our work plan in favor of cybersecurity has been effective and we have managed to maintain our rate of material cybersecurity incidents at zero. And finally, we are continuing the strategic review process for our infrastructure business, where a virtual data room is available and discussions with potential third parties are ongoing. In addition, to unlock value for Porto Aria, where the construction of the connection to the Reficar Refinery is over 60% completed, and we are expecting that the connection shall become operational by the end of the year. With respect to the LPG import project, working groups have been assembled, and detail engineering work is underway. On our Guyana business, as Gabriel said in his remarks, We remain confident about the potential development of the quarantine block as supported by our discoveries and are reviewing all available alternatives to safeguard our interest in the block and Guyana. With that, I would like to conclude by saying thank you to Gabriel and Rene for the comments and thank you everyone for attending our call. We will now turn the call back to our operator who will open up Thank you.

And ladies and gentlemen, at this time, for those wishing to ask a question, please press the star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press the star followed by the number two. Once again, for anyone who would like to ask a question, please press the star one on your telephone keypad. One moment, please, for your first question. And your first question comes from the line of Darja Lema with Bloomberg Intelligence. Please go ahead.

Hi, good morning, Gabriele Orlando and Rene. Congratulations on a great quarter. I just wanted to ask you, I think the question which is on everyone's mind is, do you have any updates on the Guiana license and what are the alternative solutions you were mentioning you're going to explore?

Thank you.

Well, thank you for the question.

As I mentioned, we remain committed to the potential development of the block. And that belief is supported by the discourse. We are also confident that we have complied with all the obligations under the petroleum agreement. and the exploration license. And as I said, we are reviewing different alternatives to protect our interests in the license.

So I don't have more to say at this point in time. And of course, we will continue causing these matters with the boiling.

Okay, thank you. And do you have any timeline? When can we expect the next update on Guyana perhaps?

We don't have a timeline at this point in time, no.

Okay, thank you. And my second question is on production. I saw your production has been accelerating in October compared to already strong production from free Q. Do you see the same trend throughout the Q4 and perhaps early next year?

Yes, as we said, we are envisioning that the four-quarter production would be above 40,000 to 500,000 barrels, so we are confident based on the performance of the heavy oil assets and the increasing in water handling capacity at CP6 and KIFA, as well as the performance of Sabanero.

So we are confident for that. Thank you. That's all from me now. Thank you.

And your next question comes from the line of Christian Farah with KNG Securities. Please go ahead.

Hello. Well, thanks for the presentation and for taking the questions. I have four questions. I'd like to go quick. First question is we're observing higher quality differentials despite lower print prices. Are you seeing a normalization by the fourth quarter, or should we expect these high values to continue?

That's the first question.

What we've seen in the market, I think you're going to see consistency. We do not expect a high variation. Actually, we are quite excited about the heavy crude mix because of current status of geopolitics. So the short term is we will probably continue to see the levels that we're seeing today.

All right. Thank you. My second question is regarding this $90 million tax refund that you got this quarter. Could you provide us some color on the reason behind this and if we should expect any changes any other tax refund for the incoming quarters? Thanks.

That's a good question. So as part of the ongoing process, we file taxes once a year. We file our taxes in early the first quarter. And then subsequently, if we do a refund, that refund is managed during the year. So the payment that we received in July or the third quarter is associated with our 2023 income tax filing. What I will point to is that from data has historically carried NOLs within its operation and you can see a balance of these within our deferred tax asset amounts that we carry in our balance sheet. This year we successfully were able to recover that amount onto our refund As we highlighted, moving forward, we still remain to have some additional tax assets that we expect to capture next year.

All right. Thank you. My third question is regarding these infrastructure business divestment. I want to know if you could comment a bit more on how the discussions are going and if you have Any plans for the use of the proceeds in case you decide to go through with the sale or spin-off? Thanks.

So I would say it's a little premature to talk about results. I think our goal here is to maximize the most value from these assets. And I think both Orlando and David said it well. We are positioning the company to unlock the most value for all of our investors. So as of today, I think Orlando highlighted that we have engage counterparties in discussions, we have a virtual data room open. And as soon as we have something to announce, we will announce it to the market and then kind of give them some guidance as to how would that be materialized. That said, and I think we also need to kind of, as our advisories point out, there is no guarantee that it certainly may occur. However, we are very excited about the potential value unlocking associated from our infrastructure assets.

All right. Thank you. And my last question is, while we've been seeing heavy share repurchases over the past months, are you planning on increasing your bond repurchases considering the low price so you can lock that profit in your P&L?

Thanks. I think that both Orlando and also Gabriel highlighted that all options are on the table. One of the things that we're visualizing is how do we deploy the cash generated from our business in a way to maximize value. We're very excited about the results from the first SIB and even more excited about the results of the second SIB. We have actually bought some bonds in the past. I think today we bought roughly $5 million and we will continue to, if the market's available, to continue to do some of those purchases. As to guidance going forward, it is certainly something on the radar. So you will need to kind of just stay tuned and see how these develop.

All right. Thank you so much. Yep. Thank you.

And your next question comes from the line of Joaquin Robert with Balance Capital. Please go ahead.

Oh, thank you for your presentation. It was good to see ODL getting the tariff bump, and we wanted to focus on this, because we understood that inflation updates on regulated career tolls have been suspended until .

You sound a little muffled. I'm sorry to interrupt you, but I really want to hear your question. Can you perhaps, like, speak a little bit more clearly on the phone?

Can you try again?

This is better, yes.

Okay, good. So it was good to see ODL getting the tariff bump, and we wanted to focus on this because we understood that inflation updates on regulated crude tolls have been suspended until integral tariff revisions took place, or at least that was the case for Senza. Is that suspension over, or the ODL pipe has a different remuneration scheme? If the latter is the case, Was the VAMP related to an inflation update or an integral tariff review or a contractual change with off-takers?

Look, that's a terrific question. And what I would say is excited to hear questions about our very exciting infrastructure assets in these calls. The tariff adjustment is in recognition from the government. There have been no adjustments as ordinarily scheduled. Ordinarily, the review should have happened two years ago. It didn't happen. The government currently is reviewing the framework under which some of these tariffs are adjusted. And at the request of the pipeline operators, it granted this adjustment, which, by the way, doesn't cover the full pass-through of inflation, but rather a portion of the inflation that we've seen over the past couple years. As an interim step, while the full process continues to be vetted, by all the stakeholders, this being consumers of pipelines, pipeline operators, and the government. So to answer your question, no, there is no final, there's no final, there's no completed tariff adjustment. It's ongoing. Yes, the tariffs were adjusted for both OSINSA and ODL. ODL starts on September, and OSINSA starts in January. And we continue to see an eye as to how this develops. And I would say this is very positive for our pipeline business, but not so positive for our oil business. So there's a balance here. But again, we're excited to receive this question, and thank you very much for it. Hopefully that clarifies your doubt.

Yes, thank you. And your next question comes from the line of Juan Barrios with Big Tech. Please go ahead. Juan Virgis, you might be on mute. Yeah, do you hear me? Is it better now? Is it better?

Hello?

Yes, we can hear you.

Yes. We can hear you. Yes, perfect. Thank you very much. Congrats for the results. I know that you have said that you're not sharing some information, but maybe we ask on a different way, and if you cannot, it's fine. But regarding the M&A process of the pipeline, Is it anything that you could share regarding number of people in the data room? Is the data room still open for potential new buyers or any timing of it? Anything you can share on that? That's the first question. And then the second question is regarding Puerto Bahia. I know that Puerto Bahia has a little bit more than $100 million linked to that port. Just confirming that any potential... divestment would be together with that debt, right? And then I have a final question, but maybe those together, if you can.

Let me take the first one and René can take the second one. As I said, and Gabriel said it as well, the VDR is open. We are having active participation from different interested parties. Discussions are ongoing. Nothing more that we can report at this point in time, but that is the indication that we're here today.

Okay.

And Juan, on your second question about the debt, just to clarify, the company has roughly 100, actually it's $110 million of debt today. That debt sits at our infrastructure holding company called Pipeline Investment Limited, which is the owner of our ODL shares. And it's also part owner of our interest in Porto Valle, because we hold Porto Valle three different vehicles. Our 99.97% interest. Depending on the outcome of a transaction, that debt could certainly be fully repaid, but it would be outcome dependent. Does that clarify your question?

Yes. Yes, okay, but maybe just to be sure, so there's no chance that if you sell it, that debt remains at Frontera, at the holding?

The debt is not at Frontera, the debt is not guaranteed by Frontera, so Frontera acts as a sponsor in this transaction, but as a debtor or guarantor. Depending on the actual transaction, there could be a piece of debt that remains, but It is outcome dependent. It will ultimately depend on the transaction that the board chooses and will accept to move forward on.

Perfect. And the last question is regarding 2025. Are you sharing any sort of, I don't know, soft guidance or indication about CAPEX for next year and volumes?

No, not at this point in time. We are working on that. So we will do it in the near future.

Okay. And you cannot share if it will be lower or same or above the current level, right?

Okay. I think the one thing that we already shared is how we're looking to end the year. So we can point to where our production is. And I think that the other thing that I would add is that the, you know, under Orlando and the board's leadership, our goal is on sustainable and cash flow over volume. So you should see, you know, more of the same. But again, we're finalizing numbers and having the discussions internally. And as soon as those are available, we will look to kind of share that with the rest of the world.

Okay. All right. I was referring in particular about CAPEX, sorry.

But that's okay. Okay. Thank you very much. Thank you, Juan. Thank you.

And your next question comes from the line of Diego Espinosa with BTG PAC Tool. Please go ahead.

Hi. Thank you for taking my questions. Can you hear me? Yes, sir. Perfect.

Just have a couple of questions. Most of the questions have been already answered. Just if you can give us some color of how much on share buybacks you already done so far this year. How much do you expect in million dollars? Just understand the amount related to cash flow. You expect to do during the fourth quarter and the first quarter of 2025. If you can give me some color on that just to understand.

Terrific question. So, so far this year, we've completed through the NCIB, and this is going to include some data from last year, right, because we launched it in November. But we've done 1.6 million shares of our NCIB, roughly costing us a little bit under $10 million. In addition to that, we did the SAB that we completed in August. So we bought 3.4 million shares. That's a total of 5 million shares. And we bought those shares for, again, $30 million. So it's about $40 million. And now we just announced today our intention to launch an additional SAB. We haven't arrived at a price for that SAB, only an amount or a volume. We expect this to be widely accepted just like the other one was. But that will be for an additional $30 million for a total of close to $70 million. And that's what's going to get us through at least through January of 2025.

Perfect.

So $30 million, which is a conditional cash flow that will be used to share buybacks until January 2025. Okay. And then the next question is rather potential additional dividends. I know that you have $240 million in cash right now. Can you give some cover on the use of that cash or...

Look, the two things, we will continue with our quarterly dividend, obviously subject to our board's decision. And the other thing is, as I said in my notes, the SAB is an efficient way for us to distribute capital to all of our shareholders. And that's why when we think about the level of participation of, I think it was 92% of all of our shareholders participated in our SIV. So we're using both dividends and SIV as a means to return this capital to our shareholders in a way that we believe is most efficient. But again, to answer your question, we believe that we will continue with our quarterly dividends subject to any other decision that may be determined by our board.

And I think that, I think that the message from Gabriel and myself have been, I mean, clear in terms of that, based on the company's results, the cash flow generation and the strategic goals of the company, we will continue exploring the returns to our investors in share buybacks, dividends, and bond buybacks.

Okay. Okay, perfect. And

The last question is, when I look at your cash flow generation, I saw that around $60 million in working capital pressures consumption there. Can you give us some color about that?

If it would be transitory or what is related to that? $60 million.

If I really can take this one offline and I can look into it off the top of my head, I'll give you one second.

Okay, perfect. That's it. Thank you for taking my questions. Yes. Thank you.

And once again, if you would like to ask a question, please press the star one on your telephone keypad. Your next question comes from the line of Juan Cruz with Morgan Stanley. Please go ahead.

Good morning, Team Frontera. Congrats on the results. Two questions. First one, with regards to the infrastructure asset sale, can you let us know if you're working with one potential buyer or is it multiple potential acquirers? That's number one. And number two, with regards to the bonds that you have purchased and intend to purchase going forward, is the intention to keep those bonds outstanding or do you want to cancel them?

That's it. Can you repeat the question a second, please?

Yeah, and the second question is with regards to the bonds that you have purchased in the market and that you intend to purchase in the future, do you want to – are you intending to keep those bonds outstanding, or do you intend to cancel them?

On the first one, and you can take the second one. I mean, it is a competitive process. Okay. So it is a competitive process. Just to address your first question.

Does that mean that there's more than one potential interested party?

Competitive means more than one. That's what I would assume. If you want me to get one, I can look up a website dictionary. Competitive definitely means more than one.

Well, it could be a competition of one.

And you won just by being the only one. There's no competition. There's no competition, sir. Right. On your other question, look, no, the bonds that we repurchased, the intention is for those to be canceled.

You intend to cancel them.

Okay, cool. Excellent. Thank you. Thank you. And once again, if you would like to ask a question, please press star one.

Your next question comes from the line of Joe DiDonato with CGX. Please go ahead.

Hi, this question is for Gabriel. I think the whole issue with CGX, I think the shareholders have been extremely patient, waiting well over a year for any kind of information regarding what's going on. I don't seem to understand why everything has to be so cryptic and so secretive. I have been invested with CGX since the year 2000. We're going on 25 years soon. And I'm looking for a bit more information than we are working to try to unlock potential. We had two excellent discoveries that were flubbed. and a lot of people's opinions in terms of delivery of information to the public. Enough is enough. You need to explain yourself a little bit better today, please.

And Joe, thank you very much for the question. I think this is not the channel for that question. This is a channel for you guys to actually go chat with the team at PGX. But look, understood, listened, and thank you for your question.

Gabriel runs or is a board of director on CGX, and Frontera is a major shareholder of CGX.

I don't understand why the secrecy. Look, Joe, there's no secrecy.

We cannot speak on behalf of CGX. So again, I'll point you to questions about CGX and the shareholders. I'll point them to CGX.

Thank you. Thank you.

Thank you, presenters. And there are no further questions at this time. Should you have any further questions, please email ir at fronterraenergy.ca. This concludes the call. Thank you all for participating. You may now disconnect.