Frontera Energy Corp. (FECCF,FEC.TO) on Friday said it has agreed to sell its Colombian upstream business to GeoPark Ltd. (GPRK) for an equity value of up to $400 million.
The deal is expected to close in the second half of 2026.
The deal supports Frontera's strategy to reposition as a focused infrastructure company while returning cash to shareholders.
The transaction includes $375 million payable at closing and a $25 million contingent payment linked to specified development milestones.
The company plans to distribute about $370 million, or CAD$7.18 per share, to shareholders following completion.
GeoPark will also assume $310 million of 2028 senior unsecured notes and $80 million under a Chevron prepayment facility, implying a firm value of $622 million for the acquired assets.
Following the divestment, Frontera will retain its infrastructure business, anchored by interests in ODL and Puerto Bahía, as well as assets in Guyana and other non-Colombian markets.
The infrastructure portfolio is expected to generate about $77 million in distributable cash flow in 2025, supported by stable dividends from ODL and growth projects at Puerto Bahía.
The equity purchase price represents a 25% premium to the 90-day VWAP and an 18% premium to the current share price, according to the company.
Frontera said cumulative dividends, buybacks, and proposed capital returns would total about $1.1 billion upon completion of the transaction.
On Thursday, Frontera Energy closed trading 0.46% higher at CAD 6.58 on the Toronto Stock Exchange.
For comments and feedback contact: editorial@rttnews.com
Business News
May 08, 2026 15:50 ET Manufacturing and services sector survey results and labor market data from main economies were the highlight on the economics news front this week. Factory orders and jobs report dominated the news flow in the U.S. Similarly, industrial production data from German garnered attention in Europe. In Asia, purchasing managers’ survey results from China and the central bank decision from Australia were in focus.