Frontera Energy to create upstream pure-play through infrastructure business spinoff
Frontera Energy Corp., Calgary, aims to unlock value and increase investor interest through a spin-off its Colombian infrastructure business, resulting in the creation of two independent companies, one focused on exploration and production, and the other on infrastructure.
In a release Nov. 13, Orlando Cabrales Segovia, chief executive officer, said the company has attracted interest from investors “who recognize the distinct strengths and value propositions of the upstream oil and gas and infrastructure businesses,” noting that “while the upstream oil and gas and infrastructure businesses are complementary, each has distinct operational profiles and life cycles, appealing to different investor bases.”
Upstream
Frontera Exploration & Production will become a pure-play upstream oil and gas exploration and production company. Frontera holds upstream assets in Colombia and Ecuador. The company’s Colombian assets include Quifa field in Puerto Gaitan in Llanos basin, CPE-6 block about 300 km southeast of Bogota in Llanos basin, and IM-1 block in the Lower Magdalena Valley.
Frontera is currently awaiting closing of a deal to divest its 50% working interests in Perico (operator) and Espejo (non-operator) blocks in Ecuador. The deal is pending satisfaction of closing conditions, including regulatory approvals for closing and operations takeover from the Ministry of Energy of Ecuador, and is expected to occur by second-quarter 2026. In its August release noting the potential $7.8-million sale, Frontera said support “a stronger focus on the higher-impact Colombian upstream operations.”
Infrastructure
The second company resulting from the spinoff is Frontera Infrastructure. The company will be an energy infrastructure business aiming to invest in near-term strategic projects at the Puerto Bahia maritime terminal on Cartagena Bay in Colombia.
Frontera's Infrastructure business includes a 35% equity interest in the Oleoducto de los Llanos Orientales SA (ODL) crude oil pipeline through subsidiary, FPI, and a 99.97% equity interest in Sociedad Portuaria Puerto Bahia.
ODL is a midstream infrastructure business with a 260-km onshore pipeline co-owned by FPI (35%) and Cenit Transporte y Logistica de Hidrocarburos SAS (65%) which connects oil-producing fields in the Llanos region with the Ocensa pipeline. In the last 12 months, ODL transported about 238,000 b/d of oil, or 30% of Colombia's total daily oil production.
The proposed spinoff is expected to close in first-half 2026 subject to shareholder approval.