Frontera Energy Corporation

Good morning, my name is Sergio and I'll be your conference facilitator today. Welcome to Frontera Energy's second quarter 2025 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 an audio webcast on the company's website. Following the speaker's remarks, there will be a time for questions. Analysts and investors are reminded that any additional questions can be directed to Frontera following today's call at IR at fronteraenergy.ca. This call contains forward-looking information within the meaning of applicable Canadian security 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, and 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 MDNA for the quarter ended June 2025, and the company's annual information from dated March 10, 2025, and the 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 the company disclaims any intent or obligation to update any forward-looking information except as required by law. I will now like to return the call over to Mr. Gabriel De Alba, Chairman of the Board of Frontera Energies. Mr. De Alba, please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Frontera's second quarter 2025 Operating and Financial Results Conference call. Joining me on today's call are Orlando Cabrales, Frontera's CEO, and René Burgos Diaz, 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, Ivana Cavalo, VP Operations, and Renata Campagnaro, VP Marketing, Logistics, and Business Sustainability. Thank you for joining us. Throughout the second quarter, despite ongoing volatility in the global economy and oil markets, Frontera remained focused on executing its strategic priorities. The company achieved strong operational results and completed important initiatives aimed at creating value for its shareholders and bondholders. The company delivered $76.1 million in operating EBITDA, generated $27.1 million in adjusted infrastructure EBITDA, and ended the quarter with a strong cash balance of $197.5 million. Additionally, the company prioritized returning capital to all investors via a successful $80 million tender offer and consent solicitation of its senior notes due in 2028. Through the consent solicitation, the company strengthened its financial flexibility and reduced outstanding debt obligations, reducing its upstream net debt by 20%. The amendments to the indenture allied Frontera's indenture with industry standards and offered targeted operational flexibility, supporting the delivery of sustainable business and reserve growth, including growth from inorganic transactions. Subsequent to the quarter, Frontera completed a Canadian $91 million substantial insurer bid, the largest in the company's history. The SIV had a .6% participation, demonstrating that the capital distribution strategy has proven to be effective and well received by the shareholders. The company also declared a quarterly dividend of $0.0625 per share, or approximately $3.5 million in aggregate, and initiated daily stock buybacks via a non-course insurer bid program. Over the last 12 months, Frontera returned over $144 million to shareholders through dividends and share buybacks, and also reduced its senior unsecured notes principle by more than 20%, highlighting its commitment to returning capital to all investors. In Guyana, the 90-day consultation and negotiation period, which was established following the 90-day consultation and negotiation period, the company received a letter reaffirming the government's vision that the current time license expired, but noted that it may consider a final meeting with the investors on a without prejudice basis in October 2025, and the joint venture will be informed as to whether such a meeting will occur in September 2025. Following the expiry of the 90-day consultation and negotiation period arising from the notice of intent, and in view of the uncertainty introduced by the government of Guyana, we have recognized an impairment of over $430 million related to our investment in the current time block in accordance with prudent accounting standards. The joint venture remains firmly of the view that its interest in and the license for the current time block remain in place and in good standing, and that the petroleum agreement has not been terminated. We remain committed to working with the government of Guyana to resolve these issues amicably, while preparing to assert and protect our legal and contractual rights to all available legal remedies as necessary. Looking ahead, Frontera will continue to consider all options to realize the full value of its assets and enhance their holdover value. In doing so, it will continue to consider initiatives in 2025 and beyond, including additional dividends, distributions, share or bond buybacks based on the overall results of the business, all prices, and the company's cash flow generation. Additionally, the company will consider all options to enhance the value of its common shares in the short term, and in so doing may consider other strategic initiatives or transactions. I'd like now to turn the call over to Orlando Cabrales, Frontera's CEO, and René Burgos, Frontera's CFO, who will share their views on our first quarter results. Orlando?

Thank you, Gabriel. Good morning, everyone, and thank you