FRONTERA ANNOUNCES THIRD QUARTER 2024 RESULTS

Recorded $16.6 million in Net Income and $26.8 million in Income from Operations

Declared Quarterly Dividend of C$0.0625 Per Share, or $3.9 Million in Aggregate, Payable on or around January 17, 2025

Generated $103.2 Million in Operating EBITDA and $124.1 Million in Cash Provided by Operating Activities

Delivered Average Daily Production of 40,616 Boe/d, Up 2% From the Prior Quarter, Averaged Approximately 42,300 Boe/d of Production in October

Targeting Q4 2024 Average Daily Production above 42,500 Boe/d

Reficar Connection Continues Advancing, Start-Up Expected December 2024

Starting September 1st, 2024, ODL Transportation Tariffs to increase by 7.8%

Generated $26.1 Million Quarterly Adjusted Infrastructure EBITDA $13.1 Million and Segment Income

Completed $30 Million Substantial Issuer Bid, Over 90% of Shareholders Participated

Announces Intention to Commence an Additional Substantial Issuer Bid For Up to $30 million

Intends to Renew NCIB For Another Year

CALGARY, AB, Nov. 6, 2024 /PRNewswire/ - Frontera Energy Corporation (TSX: FEC) ("Frontera" or the "Company") today reported financial and operational results for the third quarter ended September 30, 2024. All financial amounts in this news release are in United States dollars, unless otherwise stated.

Gabriel de Alba, Chairman of the Board of Directors, commented:

"Frontera remains focused on the execution of its strategic goals and priorities across its three business units: Upstream, Infrastructure and Guyana.

The Company's Upstream unit continues to perform according to plan, overcoming unexpected social issues during the year. The Company is gaining momentum with crude production ramping up to an average daily production for October of approximately 42,300 boe/d, and targeting fourth quarter production average daily above 42,500 boe/d.

Together with its financial advisor, Goldman Sachs, the Company continues to advance its strategic alternatives review for its standalone and growing Colombian Infrastructure business. 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 port business, Puerto Bahia, and its strong pipeline of catalysts including the Reficar connection as well as the recently announced LPG import project with its JV partner, Gasco.

With respect to its Guyana assets, the Company and its joint venture partner remain committed to the potential development of the Corentyne block as supported by our recent discoveries. While we continue to remain confident about the potential of the Corentyne block, the Company is reviewing all available alternatives to safeguard its interest in the block and Guyana.

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 total debt of $531.2 million and a healthy cash position (including restricted cash) of $240.3 million.

So far in 2024, Frontera has delivered on its commitment to enhance shareholder returns. Subsequent to the quarter and with significant shareholder take-up, the Company successfully completed on its $30.0 million substantial issuer bid which saw over 90% of the Company's shareholders participate. More importantly, and together with the successful substantial issuer bid, the Company will have returned in excess of $53 million to its shareholders, including $11.7 million of declared and paid quarterly dividends, $3.9 million in declared quarterly dividends and repurchased $7.8 million of its common shares through its normal course issuer bid, for an estimated aggregate yield of 11%.

Consistent with the Company's shareholder value focus and following the strong third quarter results, the Company is pleased to announce its intention to commence a new substantial issuer bid (the "New SIB") to purchase up to $30 million of the Company's outstanding shares. The Company shall continue to consider future investors initiatives, including potential additional dividends, distributions, or bond buybacks, based on the overall results of the businesses, cash flow generation and the Company's strategic goals"

Orlando Cabrales, Chief Executive Officer (CEO), Frontera, commented:

"Frontera recorded another strong quarter generating net income of $16.6 million and delivering Operating EBITDA of $103.2 million in line with our plan, despite lower average Brent prices and certain unexpected events during the quarter. We remain on track to meet our 2024 Production and EBITDA Guidance.

During the quarter, we increased our quarter-over-quarter average daily production by 2% to 40,616 boe/d led by strong performance from the Company's heavy oil assets. Our heavy oil assets performance was supported by successful drilling campaigns in both the CPE-6 and Sabanero blocks, and increased water disposal capacity in the CPE-6 block - where the Company achieved another daily production record reaching 8,810 boe/d. These gains were offset mainly by the effects of the 6-day national truckers strike and blockades.

Light and medium crude oil production increased, driven by increased production in Ecuador and well intervention activity performed during the first half of the year, which helped maintain light and medium crude production levels. Natural gas liquids production during the quarter increased following the completion and start-up of the compression facilities expansion and gas reinjection project at our VIM-1 block. Following the completion of the VIM-1 gas reinjection project, natural gas volumes produced at VIM-1 were reinjected, reducing natural gas production and sales volumes. Exploration activities for the VIM-1 block are expected to resume in early 2025 with the drilling of the Hidra-1 well following delays during 2024 associated to social issues. We continue to see additional activity on our VIM-1 block and remain excited about its prospects.

October 2024's actual average daily production totaled 42,300 boe/d.

We invested approximately $82 million in capital expenditures during the quarter primarily to drill 15 development wells at Quifa, CPE-6 and Sabanero, as well as to improve facilities and flowlines.

Additionally, as part of our continuing drive to simplify our business, Frontera and the ANH mutually agreed to terminate Caguan 5 and Caguan 6 blocks exploration contracts, due to long-standing social and security restriction in the contracted areas, reducing the Company's exploration commitments by $53 million.

In our Infrastructure business, ODL continues to deliver positive operational and financial results, generating $68 million of EBITDA for the quarter, resulting in $12 millionin net distributions to Frontera during the quarter (totaling $43 million year-to-date). In Puerto Bahia, construction of the connection to the Reficar refinery is over 60% complete, and we are confident that the connection shall become operational by the end of the year. With respect to our LPG import project, working groups have been assembled and detailed engineering work is underway.

At our SAARA project, we are currently processing approximately 50,000 barrels of water per day, and expect to grow water handling capacity to 250,000 barrels by year-end, boosting heavy crude oil production at the Quifa block.

Subsequent to the quarter, Frontera was recognized by the Great Place to Work Institute for its workplace environment. This recognition is a positive reflection of the entire Frontera team and our ongoing efforts to make Frontera a great place to work."

Third Quarter 2024 Operational and Financial Summary:

Third 2024 Operational and Financial Results:

• The Company recorded net income of $16.6 million or $0.20/share in the third quarter of 2024, compared with a net loss of $2.8 million or $0.03/share in the prior quarter and net income of $32.6 million or $0.38/share in the third quarter of 2023. Frontera's third quarter net income included $26.8 million income from operations, $13.4 million from share of income from associates, and $5.8 million related to income from risk management contracts, partially offset by finance expenses of $17.7 million and an income tax expense of $10.5 million (including $3.7 million of deferred income tax expenses).
• Production averaged 40,616 boe/d in the third quarter, up 2% compared to 39,912 boe/d in the prior quarter and 40,802 boe/d in the third quarter of 2023.

Heavy oil assets performance was supported by successful drilling campaigns in both the CPE-6 and Sabanero blocks, and increased water disposal capacity in the CPE-6 block - were the Company achieved another daily production record reaching 8,810 bbl/d. Production was offset mainly by the effects of the 6-day national truckers strike and blockades. Actual October 2024's average daily production totaled to approximately 42,300 boe/d.

Light and medium crude oil production increased, driven by increased production in Ecuador and well intervention activity performed during the first half of the year which helped maintain light and medium crude production levels. Natural gas liquids production during the quarter increased following the completion and start-up of the compression facilities expansion and gas reinjection project at our VIM-1 block. Following the completion of the VIM-1 gas reinjection project, natural gas volumes produced at VIM-1 were reinjected reducing natural gas production and sales volumes.

• Operating EBITDA was $103.2 million in the third quarter of 2024 compared to $110.3 million in the prior quarter and $137.8 million in the third quarter of 2023. The decrease in operating EBITDA compared to the prior quarter was mainly due to lower realization price and higher transportation costs, net of realized FX partially offset by lower production costs (excluding energy cost) during the quarter.
• Cash provided by operating activities was $124.1 million in the third quarter 2024, compared to $149.8 million in the prior quarter and $154.0 million in the third quarter of 2023. During the quarter, the Company received $12.1 million in dividends and return of capital payments from its investment in the Oleoducto de los Llanos Orientales ("ODL") and also invested $82.4 million in capital expenditures.
• The Company reported a total cash position of $240.3 million at September 30, 2024, compared to $215.1 million at June 30, 2024 and $221.2 million at September 30, 2023. The Company's total cash position, as of September 30, 2024, includes approximately $90 million in tax refund proceeds associated to the 2023 income tax return.
• As at September 30, 2024, the Company had a total crude oil inventory balance of 1,315,384 bbls compared to 1,319,189 bbls at June 30, 2024. As of September 30, 2024, the Company had a total inventory balance in Colombia of 777,158 barrels, including 328,508 crude oil barrels and 448,650 barrels of diluent and others. This compared to 758,794 as of June 30, 2024, and 812,797 barrels as at September 30, 2023.
• Capital expenditures were approximately $82.4 million in the third quarter of 2024, compared with $80.2 million in the prior quarter and $74.1 million in the third quarter of 2023. During the third quarter, the Company drilled 15 development wells at its Quifa, CPE-6 and Sabanero blocks.
• The Company's net sales realized price was $66.70/boe in the third quarter of 2024, compared to $72.85/boe in the prior quarter and $74.13/boe in the third quarter of 2023. The decrease in the Company's net sales realized price quarter over quarter was mainly driven by lower Brent benchmark oil prices, increase in oil price differentials and higher purchased crude net margin, partially offset by lower royalties paid in cash and lower premiums paid on oil price risk management contracts.
• The Company's operating netback was $40.59/boe in the third quarter of 2024, compared with $46.40/boe in the prior quarter and $48.54/boe in the third quarter of 2023. The decrease was a result of lower net sales realized prices, and increase in transportation cost and energy cost, partially offset by a decrease in production costs (excluding energy cost).
• Production costs (excluding energy cost), net of realized FX hedge impact, averaged $8.88/boe in the third quarter of 2024, compared with $10.79/boe in the prior quarter and $8.82/boe in the third quarter of 2023. The decrease in production costs was driven by higher production and lower well intervention activities in the Light and Medium assets during the quarter.
• Energy costs, net of realized FX hedging impacts, averaged $5.11/boe in the third quarter of 2024, compared to $4.74/boe in the prior quarter and up from $5.04/boe in the third quarter of 2023. The increase during the quarter was a result of higher energy use related to the increase in heavy crude oil production.
• Transportation costs, net of realized FX hedging impacts averaged $12.12/boe in the third quarter of 2024, compared with $10.92/boe in the prior quarter and up from $11.73/boe in the third quarter of 2023. The increase in transportation costs during the quarter was primarily attributed to pipeline and truck tariffs increases that occurred during the quarter and higher volumes transported.
• ODL volumes transported were 243,997 bbl/d during the third quarter of 2024, compared to 249,196 in the second quarter of 2024, mainly due to lower production from Llanos 34 transported through the pipeline.
• Total Puerto Bahia liquids volumes were 46,964 bbl/d during the third quarter compared to 61,798 bbl/d the second quarter of 2024. The decrease in volumes during the quarter was mainly due to Low Navigability in the Magdalena River Expected to Rebound in Q4 2024.
• Adjusted Infrastructure EBITDA in the third quarter of 2024 was $26.2 million, compared to $27.8 million in the second quarter 2024. The decrease was mainly due to lower liquids and general cargo revenue from Puerto Bahia and an increase in cost and general and administrative expenses in ODL due to inflationary pressures on services and wages indexation.

Frontera's Sustainability Strategy

In 2024, Frontera has achieved 73% of its sustainability goals. In the third quarter, Frontera made purchases to local suppliers that represent 10,8% of its total purchases. These results exceed the annual goal of 9%.

Additionally, our efforts to maintain close and empathic relationships with all our stakeholders including our employees, Frontera was recognized with "the Great Place To Work" award and ranked 17th as one of the best companies to work 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 0.

Enhancing Shareholder Returns

Year-to-date, the Company has returned over $53 million of capital to its shareholders. Subsequent to the quarter the Company successfully completed its $30 million substantial issuer bid which saw over 90% of the Company's shareholders participate. The Company has returned $11.7 million of quarterly dividends, $3.9 million in declared quarterly dividends and repurchased $7.8 million of its common shares through its NCIB, for an estimated aggregate yield of 11%. The Company has also repurchased $5 million of its 2028 senior unsecured notes.

The Company continues to consider future investor initiatives, including potential additional dividends, distributions, or bond buybacks, based on the overall results of our businesses, cash flow generation and the Company's strategic goals.

August 2024 SIB: The Company purchased for cancellation for an aggregate purchase price of CAD$40.5 million (equivalent to $30 million) of its common shares at CAD$12.0/share, for a total of 3,375,000 shares repurchased. The substantial issuer bid attracted participation from over 90% of the Company's shareholders.

November 2024 SIB: On November 6, the Company announced its intention to commence the New SIB pursuant to which the Company will offer to purchase up to $30 million of its Common Shares for cancellation at a fixed price per share.

The Company intends to determine the terms of the New SIB, including pricing, in due course, and expects that the New SIB will be completed in January 2025. Commencement and/or completion of the New SIB is subject to receipt of a satisfactory liquidity opinion from a qualified financial adviser, approval of the Board of Directors, and obtaining any necessary exemptive relief under applicable securities laws in Canada. The New SIB will not be conditional upon any minimum number of shares being tendered and will be subject to conditions customary for transactions of this nature. The Company intends to fund the New SIB from current cash resources.

NCIB: Under the Company's current normal course issuer bid which commenced on November 21, 2023, Frontera is authorized to repurchase for cancellation up to 3,949,454 of its common shares ("Common Shares"). As of November 6, 2024, the Company has repurchased approximately 1,271,600 Common Shares for cancellation for approximately $7.8 million.

Frontera also announces that the Company intends to file with the TSX a notice of intention to commence a normal course issuer bid for its Common Shares (the "NCIB"). Subject to the acceptance of the TSX, the Company would be permitted under the NCIB to purchase, for cancellation, up to that number of Common Shares equal to the greater of (a) 5% of the Company's issued and outstanding Common Shares, and (b) 10% of the Company's "public float" (as such term is defined in the TSX Company Manual), during the 12-month period following commencement of the NCIB. Purchases under the NCIB would not occur while the New SIB is outstanding.

Dividend: Pursuant to Frontera's dividend policy, Frontera's Board of Directors has declared a dividend of C$0.0625 per Common Share to be paid on or around January 17, 2025, to shareholders of record at the close of business on January 3, 2025.

This dividend payment to shareholders is designated as an "eligible dividend" for purposes of the Income Tax Act (Canada). This dividend is eligible for the Company's Dividend Reinvestment Plan to provide shareholders of Frontera who are resident in Canada with the option to have the cash dividends declared on their common shares reinvested automatically back into additional common shares, without the payment of brokerage commissions or services charges.

Bond Buybacks: During the three months ended September 30, 2024, the Company repurchased in the open market $1.5 million of its 2028 Unsecured Notes for cash consideration of $1.2 million including interest payable of $0.1 million. As a result, the Company recognized a gain of $0.3 million. The carrying value for the 2028 Unsecured Notes as of September 30, 2024, is $389.4 million. Year-to-date, the Company has repurchased $5 million of its 2028 Unsecured Notes.

Strategic Alternatives Review Processes: In May 2024, the Company launched a strategic alternatives review for its standalone and growing Colombian Infrastructure Business, which could result in a potential spin-off to Frontera shareholders, a total or partial sale or other business combination of Frontera's Colombian Infrastructure Business, and/or a strategic investment, therein by a third party. Frontera has retained Goldman Sachs & Co. LLC as financial advisor and may retain other advisors to assist the Board in evaluating the various strategic, business, and financial alternatives.

This process is actively ongoing with a virtual data room open and discussions with interested third parties underway. The Company will provide additional information as deemed appropriate.

In our Guyana exploration business, the Company and its joint venture partner remain committed to the potential development of the Corentyne block as supported by the recent discoveries. While the Company continues to remain confident about the potential of the Corentyne block, it is reviewing all available alternatives to safeguard its interests in the block and Guyana.

These processes are central to the Company's efforts to streamline its business and unlock the inherent value from the sum of its parts. Frontera believes the value of these assets is not reflected in the Company's current share price and these processes aim to drive value for shareholders. There can be no guarantee that these strategic alternatives review processes will result in a transaction.

Frontera's Three Core Businesses

Frontera's three core businesses include: (1) its Colombia and Ecuador Upstream Onshore business, (2) its standalone and growing Colombian Infrastructure business, and (3) its Guyana Exploration business offshore Guyana.

Colombia & Ecuador Upstream Onshore

Colombia

During the third quarter of 2024, Frontera produced 38,840 boe/d from its Colombian operations (consisting of 25,312 bbl/d of heavy crude oil, 11,018 bbl/d of light and medium crude oil, 3,192 mcf/d of conventional natural gas and 1,950 boe/d of natural gas liquids).

In the third quarter of 2024, the Company drilled 15 development wells at its Quifa, CPE-6 and Sabanero blocks and completed well interventions at 21 others.

Currently, the Company has 1 drilling rigs and 3 intervention rigs active at its Sabanero, Quifa and Cravoviejo blocks in Colombia.

Quifa Block: Quifa SW and Cajua

At Quifa, third quarter 2024 production averaged 16,778 bbl/d of heavy crude oil (including both Quifa and Cajua). The Company drilled 3 wells in the block during the third quarter of 2024 and invested new and improved flow lines facilities in the block for new well production and the SAARA project connection.

Year to date, the Company has handled an average of approximately 1.6 million barrels of water per day in Quifa including SAARA.

CPE-6

At CPE-6, third quarter 2024 production averaged approximately 7,459 bbl/d of heavy crude oil, increasing 7% from 6,947 bbl/d during the second quarter of 2024 and achieving another record quarterly production in CPE-6. During the quarter, the company also achieved record daily production of 8,810 bbl/d.

The Company drilled 9 development wells during the quarter, the company also invested in the expansion of the development facilities and increasing water handling capacity at the CPE-6 block.

Year to date, the Company has handled an average of approximately 245 thousand barrels of water per day in CPE-6.

The Company's current water handling capacity in CPE-6 is approximately 300 Mbwpd, on track to increase to 360 thousand bwpd by year-end.

Other Colombia Developments

At Guatiquia, production during the third quarter 2024 averaged 5,801 bbl/d of light and medium crude compared with 5,539 bbl/d in the second quarter of 2024.

In the Cubiro block production averaged 1,447 bbl/d of light and medium crude oil in the second quarter of 2024 compared with 1,491 bbl/d in the second quarter of 2024.

At VIM-1 (Frontera 50% W.I., non-operator), production averaged 1,934 boe/d of light and medium crude oil in the third quarter of 2024 compared to approximately 1,856 boe/d of light and medium crude oil in the second quarter of 2024.

At the Sabanero block, the Company the company drilled 3 development wells, and invested in the expansion of the block facilities.

Colombia Exploration Assets

At the VIM-1 block, all pre-drill activities related to civil work for the platform and roads were completed for the Hidra-1 exploration well, while the well is drill-ready, social-related issues have resulted in the decision to pause the spud of the well to 2025.

Pre-drilling activities for two new exploration wells in the Cachicamo block were sanctioned, the first well Papilio-1 expected to spud in December 2024 and the second well Greta Norte-1 in January 2025. The Company is also engaged in pre-seismic and pre-drilling activities related to social and environmental studies in the Llanos-99 and VIM-46 blocks.

Ecuador

In Ecuador, third quarter 2024 production averaged approximately 1,776 bbl/d of light and medium crude oil compared to 1,655 bbl/d in the prior quarter. In the Perico block, the Company performed 2 workovers and 1 well service, increasing production during the quarter and invested in the purchase of facilities.

In the Espejo block, the Espejo Norte-A1 well was drilled, reaching a total depth of 9,912 feet MD. Integration of core data, logging while drilling, and pressure data indicated 7 feet of net pay in the M1 sands. The initial test produced approximately 100 bopd gross, after testing the well was deemed non-economic and is currently under evaluation. In addition, the Espejo Sur-B3 exploration well, drilled during the second quarter of 2024, is undergoing a long-term test with a production of over 500 bbl/d and a BSW of 72%.

2. Infrastructure Colombia

Frontera's Infrastructure Colombia Segment includes the Company's 35% equity interest in the ODL pipeline through Frontera's wholly owned subsidiary, PIL and the Company's 99.97% interest in Puerto Bahia. Starting in 2024, the Infrastructure Colombia Segment also include the Company's reverse osmosis water treatment facility ("SAARA") and its palm oil plantation ("ProAgrollanos").

On Puerto Bahia, construction of the connection to the Reficar refinery is over 60% complete, and shall become operational by the end of the year. With respect to our LPG import project, working groups have been assembled and detailed engineering work is taking place.

Frontera processed 49,589 barrels of water per day at its SAARA reverse osmosis water-treatment facility during the quarter and expect to grow water-handling capacity to 250,000 barrels by year-end.

The Company continues to execute on its strategic priorities supporting the long-term growth and sustainability of its businesses.

Infrastructure Colombia Segment Results

Adjusted Infrastructure EBITDA in the third quarter of 2024 was $26.2 million, compared with $27.8 million during the second quarter of 2024. The decrease was mainly due to lower liquids and general cargo revenue from Puerto Bahia and an increase in cost and general and administrative expenses in ODL due to inflationary pressures on services and wage indexation.

Segment capital expenditures for the three months ended September 30, 2024, were $13.9 million mainly related to investments at Puerto Bahia including: (i) the Reficar Connection Project, including engineering and civil works, expenses related to rights of way, among others, (ii) tank maintenance, and (iii) general cargo terminal equipment and facilities; and the SAARA project.

The following table shows the volumes pumped per injection point in ODL:

The following table shows throughput for the liquids port facility at Puerto Bahia:

The following table shows the barrels of water per day treated and irrigated in SAARA and field performance indicators for Proagrollanos:

Hedging Update

As part of its risk management strategy, Frontera uses derivative commodity instruments to manage exposure to price volatility by hedging a portion of its oil production. The Company's strategy aims to protect 40-60% of its estimated net after royalties' production using a combination of instruments, capped and non-capped, to protect the revenue generation and cash position of the Company, while maximizing the upside, thereby allowing the Company to take a more dynamic approach to the management of its hedging portfolio.

The following table summarizes Frontera's hedging position as of November 6, 2024.

The Company is exposed to foreign currency fluctuations primarily arising from expenditures that are incurred in COP and its fluctuation against the USD. As of November 6, 2024, the Company had the following foreign currency derivatives contracts:

Third Quarter 2024 Conference Call Details

A Conference call for investors and analysts will be held on Thursday, November 7, 2024, at 11:00 a.m. Eastern Time. Participants will include Gabriel de Alba, Chairman of the Board of Directors, Orlando Cabrales, Chief Executive Officer, Rene Burgos, Chief Financial Officer, and other members of the senior management team.

Analysts and investors are invited to participate using the following dial-in numbers:

A replay of the conference call will be available until 11:59 p.m. Eastern Time on November 14, 2024.

About Frontera:

Frontera Energy Corporation is a Canadian public company involved in the exploration, development, production, transportation, storage and sale of oil and natural gas in South America, including related investments in both upstream and midstream facilities. The Company has a diversified portfolio of assets with interests in 22 exploration and production blocks in Colombia, Ecuador and Guyana, and pipeline and port facilities in Colombia. Frontera is committed to conducting business safely and in a socially, environmentally and ethically responsible manner.

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Social Media

Follow Frontera Energy social media channels at the following links:

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Facebook: https://es-la.facebook.com/FronteraEnergy/
LinkedIn: https://co.linkedin.com/company/frontera-energy-corp.

Advisories:

Cautionary Note Concerning Forward-Looking Statements

This news release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, the Company's strategic alternatives review process for its Colombian Infrastructure business and its interests in the Corentyne block in Guyana, the Company's belief that the value of its assets is not reflected in the current stock price and the ability of such strategic processes to drive value for shareholders, the Company's goal of enhancing shareholder value by returning capital to security holders, the Company's current intentions regarding commencement of the New SIB, the amount of capital returned to shareholders under the New SIB, the timing of completion of the New SIB, the terms of the New SIB and the Company's intention to announce further details regarding the New SIB, expectations with respect to the NCIB and regulatory approval thereof, the Company's intent to consider future shareholder initiatives, the timing of the completion of the connection project between Puerto Bahia and Reficar, the future water handling capacity in CPE-6 and at SAARA, the Company's exploration and development plans and objectives, including its drilling plans and the timing thereof, estimates and/or assumptions in respect of the Company's capital expenditure program (including Company's guidance), production levels, profitability, costs, future income generation capacity, cash levels (including the timing and ability to release restricted cash), regulatory approval, and the Company's hedging program and its ability to mitigate the impact of changes in oil prices) are forward-looking statements.

These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to the Company. 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, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the ability of the Company to successfully conclude on a timely basis or at all one or both of its strategic review processes; volatility in market prices for oil and natural gas; uncertainties associated with estimating and establishing oil and natural gas reserves and resources; liabilities inherent with the exploration, development, exploitation and reclamation of oil and natural gas; uncertainty of estimates of capital and operating costs, production estimates and estimated economic return; increases or changes to transportation costs; expectations regarding the Company's ability to raise capital and to continually add reserves through acquisition and development; the Company's ability to access additional financing; the ability of the Company to maintain its credit ratings; the ability of the Company to: meet its financial obligations and minimum commitments, fund capital expenditures and comply with covenants contained in the agreements that govern indebtedness; political developments in the countries where the Company operates; the uncertainties involved in interpreting drilling results and other geological data; geological, technical, drilling and processing problems; timing on receipt of government approvals; fluctuations in foreign exchange or interest rates and stock market volatility and the other risks disclosed under the heading "Risk Factors" and elsewhere in the Company's annual information form dated March 7, 2024 filed on SEDAR+ at www.sedarplus.ca.

Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.

This news release contains future oriented financial information and financial outlook information (collectively, "FOFI") (including, without limitation, statements regarding expected average production), and are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraph. The FOFI has been prepared by management to provide an outlook of the Company's activities and results, and such information may not be appropriate for other purposes. The Company and management believe that the FOFI has been prepared on a reasonable basis, reflecting management's reasonable estimates and judgments, however, actual results of operations of the Company and the resulting financial results may vary from the amounts set forth herein. Any FOFI speaks only as of the date on which it is made, and the Company disclaims any intent or obligation to update any FOFI, whether as a result of new information, future events or results or otherwise, unless required by applicable laws.

No Offer or Solicitation

The New SIB referred to in this news release has not yet commenced. This news release is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to sell Common Shares. The solicitation and the offer to buy Common Shares will only be made pursuant to a formal offer to purchase and issuer bid circular, a letter of transmittal, a notice of guaranteed delivery and other related documents to be filed with the applicable Canadian securities' regulatory authorities. The offer to purchase pursuant to the New SIB will not be made to, nor will tenders be accepted from or on behalf of, holders of Common Shares in any jurisdiction in which the making or acceptance of offers to sell Common Shares would not be in compliance with the laws of that jurisdiction.

Non-IFRS Financial Measures

This press release contains various "non-IFRS financial measures" (equivalent to "non-GAAP financial measures", as such term is defined in NI 52-112), "non-IFRS ratios" (equivalent to "non-GAAP ratios", as such term is defined in NI 52-112), "supplementary financial measures" (as such term is defined in NI 52-112) and "capital management measures" (as such term is defined in NI 52-112), which are described in further detail below. Such measures do not have standardized IFRS definitions. The Company's determination of these non-IFRS financial measures may differ from other reporting issuers and they are therefore unlikely to be comparable to similar measures presented by other companies. Furthermore, these financial measures should not be considered in isolation or as a substitute for measures of performance or cash flows as prepared in accordance with IFRS. These financial measures do not replace or supersede any standardized measure under IFRS. Other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures.

The Company discloses these financial measures, together with measures prepared in accordance with IFRS, because management believes they provide useful information to investors and shareholders, as management uses them to evaluate the operating performance of the Company. These financial measures highlight trends in the Company's core business that may not otherwise be apparent when relying solely on IFRS financial measures. Further, management also uses non-IFRS measures to exclude the impact of certain expenses and income that management does not believe reflect the Company's underlying operating performance. The Company's management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period and to prepare annual operating budgets and as a measure of the Company's ability to finance its ongoing operations and obligations.

Set forth below is a description of the non-IFRS financial measures, non-IFRS ratios, supplementary financial measures and capital management measures used in the MD&A.

Operating EBITDA

EBITDA is a commonly used non-IFRS financial measure that adjusts net income as reported under IFRS to exclude the effects of income taxes, finance income and expenses, and DD&A. Operating EBITDA is a non-IFRS financial measure that represents the operating results of the Company's primary business, excluding the following items: restructuring, severance and other costs, post-termination obligation, trunkline costs, payments of minimum work commitments and, certain non-cash items (such as impairments, foreign exchange, unrealized risk management contracts, and share-based compensation) and gains or losses arising from the disposal of capital assets. In addition, other unusual or non-recurring items are excluded from operating EBITDA, as they are not indicative of the underlying core operating performance of the Company.

A reconciliation of Operating EBITDA to net income is as follows:

Capital Expenditures

Capital expenditures is a non-IFRS financial measure that reflects the cash and non-cash items used by the Company to invest in capital assets. This financial measure considers oil and gas properties, plant and equipment, infrastructure, exploration and evaluation assets expenditures which are items reconciled to the Company's Statements of Cash Flows for the period.

Infrastructure Colombia Calculations

Each of Adjusted Infrastructure Revenue, Adjusted Infrastructure Operating Costs and Adjusted Infrastructure General and Administrative, is a non-IFRS financial measure, and each is used to evaluate the performance of the Infrastructure Colombia Segment operations. Adjusted Infrastructure Revenue includes revenues of the Infrastructure Colombia Segment including ODL's revenue direct participation interest. Adjusted Infrastructure Operating Costs includes costs of the Infrastructure Colombia Segment including ODL's cost direct participation interest. Adjusted Infrastructure General and Administrative includes general and administrative costs of the Infrastructure Colombia Segment including ODL's general and administrative direct participation interest.

A reconciliation of each of Adjusted Infrastructure Revenue, Adjusted Infrastructure Operating Costs and Adjusted Infrastructure General and Administrative is provided below.

Adjusted Infrastructure EBITDA

The Adjusted Infrastructure EBITDA is a non-IFRS financial measure used to assist in measuring the operating results of the Infrastructure Colombia Segment business.

Net Sales

Net sales is a non-IFRS financial measure that adjusts revenue to include realized gains and losses from oil risk management contracts while removing the cost of any volumes purchased from third parties. This is a useful indicator for management, as the Company hedges a portion of its oil production using derivative instruments to manage exposure to oil price volatility. This metric allows the Company to report its realized net sales after factoring in these oil risk management activities. The deduction of cost of diluent and Oil purchased is helpful to understand the Company's sales performance based on the net realized proceeds from its own production, the cost of which is partially recovered when the blended product is sold. Net sales also exclude sales from port services, as it is not considered part of the oil and gas segment. Refer to the reconciliation in the "Sales" section on page 10 of the MD&A.

Operating Netback and Oil and Gas Sales, Net of Purchases

Operating netback is a non-IFRS financial measure and operating netback per boe is a non-IFRS ratio. Operating netback per boe is used to assess the net margin of the Company's production after subtracting all costs associated with bringing one barrel of oil to the market. It is also commonly used by the oil and gas industry to analyze financial and operating performance expressed as profit per barrel and is an indicator of how efficient the Company is at extracting and selling its product. For netback purposes, the Company removes the effects of any trading activities and results from its Infrastructure Colombia Segment from the per barrel metrics and adds the effects attributable to transportation and operating costs of any realized gain or loss on foreign exchange risk management contracts. Refer to the reconciliation in the "Operating Netback" section on page 9.

The following is a description of each component of the Company's operating netback and how it is calculated. Oil and gas sales, net of purchases, is a non-IFRS financial measure that is calculated using oil and gas sales less the cost of volumes purchased from third parties including its transportation and refining costs. Oil and gas sales, net of purchases per boe, is a non-IFRS ratio that is calculated using oil and gas sales, net of purchases, divided by the total sales volumes, net of purchases. A reconciliation of this calculation is provided below:

Non-IFRS Ratios

Realized oil price, net of purchases, and realized gas price per boe

Realized oil price, net of purchases, and realized gas price per boe are both non-IFRS ratios. Realized oil price, net of purchases, per boe is calculated using oil sales net of purchases, divided by total sales volumes, net of purchases. Realized gas price is calculated using sales from gas production divided by the conventional natural gas sales volumes.

Net sales realized price

Net sales realized price is a non-IFRS ratio that is calculated using net sales (including oil and gas sales net of purchases, realized gains and losses from oil risk management contracts and less royalties). Net sales realized price per boe is a non-IFRS ratio which is calculated dividing each component by total sales volumes, net of purchases. A reconciliation of this calculation is provided below:

Purchase crude net margin

Purchase crude net margin is a non-IFRS financial measure that is calculated using the purchased crude oil and products sales, less the cost of those volumes purchased from third parties including its transportation and refining costs. Purchase crude net margin per boe is a non-IFRS ratio that is calculated using the Purchase crude net margin, divided by the total sales volumes, net of purchases. A reconciliation of this calculation is provided below:

Production costs (excluding energy cost), net of realized FX hedge impact, and production cost (excluding energy cost), net of realized FX hedge impact per boe

Production costs (excluding energy cost), net of realized FX hedge impact is a non-IFRS financial measure that mainly includes lifting costs, activities developed in the blocks, processes to put the crude oil and gas in sales condition and the realized gain or loss on foreign exchange risk management contracts attributable to production costs. Production cost, net of realized FX hedge impact per boe is a non-IFRS ratio that is calculated using production cost (excluding energy cost), net of realized FX hedge impact divided by production (before royalties). A reconciliation of this calculation is provided below:

Energy costs, net of realized FX hedge impact, and production cost, net of realized FX hedge impact per boe

Energy costs, net of realized FX hedge impact is a non-IFRS financial measure that describes the electricity consumption and the costs of localized energy generation and the realized gain or loss on foreign exchange risk management contracts attributable to energy costs. Energy cost, net of realized FX hedge impact per boe is a non-IFRS ratio that is calculated using energy cost, net of realized FX hedge impact divided by production (before royalties). A reconciliation of this calculation is provided below:

Transportation costs, net of realized FX hedge impact, and transportation costs, net of realized FX hedge impact per boe

Transportation costs, net of realized FX hedge impact is a non-IFRS financial measure, that includes all commercial and logistics costs associated with the sale of produced crude oil and gas such as trucking and pipeline, and the realized gain or loss on foreign exchange risk management contracts attributable to transportation costs. Transportation cost, net of realized FX hedge impact per boe is a non-IFRS ratio that is calculated using transportation cost, net of realized FX hedge impact divided by net production after royalties. A reconciliation of this calculation is provided below:

Supplementary Financial Measures

Realized (loss) gain on oil risk management contracts per boe

Realized (loss) gain on oil risk management contracts includes the gain or loss during the period, as a result of the Company´s exposure in derivative contracts of crude oil. Realized (loss) gain on oil risk management contracts per boe is a supplementary financial measure that is calculated using Realized (loss) gain on risk management contracts divided by total sales volumes, net of purchases.

Royalties per boe

Royalties includes royalties and amounts paid to previous owners of certain blocks in Colombia and cash payments for PAP. Royalties per boe is a supplementary financial measure that is calculated using the royalties divided by total sales volumes, net of purchases.

NCIB weighted-average price per share

Weighted-average price per share under the 2023 NCIB is a supplementary financial measure that corresponds to the weighted-average price of common shares purchased under the 2023 NCIB during the period. It is calculated using the total amount of common shares repurchased in U.S. dollars divided by the number of common shares repurchased.

Capital Management Measures

Restricted cash short- and long-term

Restricted cash (short- and long-term) is a capital management measure, that sums the short-term portion and long-term portion of the cash that the Company has in term deposits that have been escrowed to cover future commitments and future abandonment obligations, or insurance collateral for certain contingencies and other matters that are not available for immediate disbursement.

Total cash

Total cash is a capital management measure to describe the total cash and cash equivalents restricted and unrestricted available, is comprised by the cash and cash equivalents and the restricted cash short and long-term.

Total debt and lease liabilities

Total debt and lease liabilities are capital management measures to describe the total financial liabilities of the Company and is comprised of the debt of the 2028 Unsecured Notes, loans, and liabilities from leases of various properties, power generation supply, vehicles and other assets.

Definitions:

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SOURCE Frontera Energy Corporation