Frontera Energy has signed a definitive agreement with Parex Resources for the sale of its Colombian exploration and production (E&P) assets in a deal worth $750m, inclusive of debt.

Under the terms, Parex will acquire these assets for an equity consideration of up to $525m, with $500m due at closing and an additional $25m payable contingent upon an extension of the Quifa association contract within 12 months.

Parex will also assume Frontera’s $310m in 2028 senior unsecured notes and its $80m Chevron prepayment facility, bringing the total transaction value to approximately $750m.

Frontera Energy CEO Orlando Cabrales said: “As the largest independent operator in Colombia with a strong relationship with key Colombian stakeholders and direct knowledge of our assets though our VIM-1 partnership, Parex brings strong operational and financial capabilities and continuity for our employees, partners and communities.

“For Frontera, this transaction marks the beginning of our next chapter as a pure-play infrastructure company with approximately $77m in distributable cash flows, multiple near-term growth catalysts at Puerto Bahia, including the LPG [liquefied petroleum gas] import facilities, the potential LNG [liquefied natural gas] regasification project and containerised cargo expansion, and a strong path to returning capital to our shareholders.”

The agreement follows Parex's revised proposal offering an extra $125m in equity consideration compared to a previous arrangement with GeoPark, which had been announced on 29 January 2026.

As a result, Frontera terminated its deal with GeoPark and paid a $25m break fee in line with the agreement terms.

Frontera intends to distribute approximately $470m, including the contingent payment, to shareholders after closing, subject to shareholder approval and after accounting for payments such as the GeoPark break fee, reserved capital for growth projects and transaction costs.

This distribution is expected to be roughly C$9.18 per share.

The company’s remaining business will focus on infrastructure assets. This includes a 35% stake in the Oleoducto de los Llanos Orientales pipeline and a 99.97% interest in Sociedad Portuaria Puerto Bahia, along with other non-Colombian holdings such as those in Guyana.

Upon completion of the transaction, Frontera estimates it will retain around $50m in cash and equivalents to support strategic initiatives within its infrastructure business. This includes assessing a possible LNG regasification project with Ecopetrol.

The arrangement will proceed under the Business Corporations Act (British Columbia) by way of a plan of arrangement and is scheduled to close in Q2 2026.

The completion of the deal is pending customary conditions such as approval by at least two-thirds of Frontera’s shareholders, court sanction from the Supreme Court of British Columbia and necessary regulatory consents.

"Frontera to sell Colombian operations to Parex in $750m deal" was originally created and published by Offshore Technology, a GlobalData owned brand.

 

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