NEWSROOM

Frontera Reports 10% Growth in Value of Proved Plus Probable (2P) Reserves to $2.1 Billion (C$27.95/Share), NPV10 After Tax
Feb 18, 2020

Added 26.2 MMBOE of Net 2P Reserves Achieving 112% Reserve Replacement Ratio

Fourth Quarter and Full Year 2019 Results Will Be Released After Market on Thursday, March 5, 2020, Followed by a Conference Call on Friday, March 6, 2020 at 10:00 A.M. EST

TORONTO, Feb. 18, 2020 /CNW/ - Frontera Energy Corporation (TSX: FEC) ("Frontera" or the "Company") today announced the results of its annual independent reserves assessment and provided notice of fourth quarter and full year 2019 financial results and conference call. All dollar amounts in this news release and the Company's financial disclosures are in United States dollars, unless otherwise noted. The financial and operational information contained below is based on the Company's unaudited expected results for the year ended December 31, 2019.

For the year ended December 31, 2019, the Company's reserves were independently evaluated by DeGolyer and MacNaughton ("D&M"), in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook maintained by the Society of Petroleum Evaluation Engineers (Calgary Chapter) ("COGEH") and National Instrument 51-101 Standards for Disclosure of Oil and Gas Activities ("NI 51-101") and are based on the Company's 2019 year-end estimated reserves as evaluated by D&M in their reserves report dated February 12, 2020 with an effective date of December 31, 2019 (the "Reserves Report"). Additional reserve information as required under NI 51-101 will be included in the Company's F1 Form which is expected to be filed on SEDAR on March 5, 2020. See "Advisory Note Regarding Oil and Gas Information" section in the "Advisories", at the end of this news release. Numbers in tables may not add due to rounding differences.

2019 Reserves Report Highlights

For the year ended December 31, 2019:

  • Added 26.4 MMboe of Proved plus Probable ("2P") reserves on a gross basis and 26.2 MMboe of 2P reserves on a net basis, representing a reserve replacement ratio of 102% and 112% respectively. 75% of the reserves replacement resulted from improved production performance at Quifa, which was driven by the additional water handling expansion project combined with stronger than previously modeled production from Sabanero, Guatiquia and Arrendajo, while positive exploration results and improved horizontal well performance at CPE-6 delivered the remainder.
     
  • An 11% increase in Proved Developed Producing ("PDP") reserves in Colombia to 39.6 MMboe. The addition of 27.2 MMboe of PDP reserves represents a 117% reserve replacement ratio for Colombian PDP on a gross basis. Colombia 2P reserve life index remains stable at 7.1 years, reflecting increased 2019 production and reserves.
     
  • Has a 2P Net Present Value ("NPV") of upstream assets, discounted at 10% after tax, of $2.1 billion, or C$27.95/share (C$33.17/share before tax), compared to $1.9 billion, or C$26.24/share as at December 31, 2018, representing an increase of 10% on a dollar value basis and 7% on a per share basis, or an increase in per share value of 12% on a constant currency basis.
     
  • Achieved a finding and development cost of $11.53/boe in 2019 on a 2P basis in Colombia with upstream reserves based capital expenditures of $289 million. Including changes in future development costs, 1P finding and development cost was $12.12/boe and $17.46/boe on a 2P basis in Colombia.
     
  • A 6% increase in net Proved plus Probable plus Possible ("3P") reserves, highlighting the improvement in the Company's longer term development prospects resulting from exploration success on the CPE-6 block during 2019.
     
  • The 2019 reserves evaluation does not include any of the positive impact associated with the recent announced exploration discovery on the La Belleza well on the VIM-1 block in the Lower Magdalena Valley, onshore Colombia.

 

2019 Year-End D&M Certified Gross Reserves Volumes(1)

Reserves Category

December 31, 2019

 

December 31, 2018

 

Percentage Change
2019 versus 2018

 

MBoe(2)

 

MBoe(2)

   

Proved Developed Producing (PDP)

40,285

 

39,054

 

3%

Proved Developed Not Producing

4,259

 

5,423

 

(21)%

Proved Undeveloped

70,857

 

71,329

 

(1)%

Total Proved (1P)

115,401

 

115,806

 

—%

Probable

55,789

 

54,789

 

2%

Total Proved Plus Probable (2P)

171,190

 

170,596

 

—%

Possible(3)

51,544

 

43,963

 

17%

Total Proved Plus Probable Plus Possible (3P)

222,734

 

214,559

 

4%

           

1Gross reserves represent Frontera's WI before royalties.

2See "Boe Conversion" section in the "Advisories", at the end of this press release.

3Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.

 

2019 Year-End D&M Certified Net Reserves Volumes(1)

Reserves Category

December 31, 2019

 

December 31, 2018

 

Percentage Change
2019 versus 2018

 

MBoe(2)

 

MBoe(2)

   

Proved Developed Producing (PDP)

37,050

 

35,327

 

5%

Proved Developed Not Producing

3,948

 

5,008

 

(21)%

Proved Undeveloped

63,757

 

64,524

 

(1)%

Total Proved (1P)

104,755

 

104,859

 

—%

Probable

52,932

 

50,085

 

6%

Total Proved Plus Probable (2P)

157,687

 

154,944

 

2%

Possible(3)

49,546

 

41,055

 

21%

Total Proved Plus Probable Plus Possible (3P)

207,233

 

196,000

 

6%

 

1Net reserves represent Frontera's WI after royalties.

2See "Boe Conversion" section in the "Advisories", at the end of this press release.

3Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.

 

The following tables provide a summary of the Company's oil and natural gas reserves based on forecast prices and costs effective December 31, 2019 as applied in the Reserves Report. The Company's net reserves after royalties incorporate all applicable royalties under Colombia and Peru fiscal legislation based on forecast pricing and production rates evaluated in the Reserves Report, including any additional participation interest related to the price of oil applicable to certain Colombian blocks, as at year-end 2019.

2019 Year-End D&M Certified Reserves Volumes by Product Type and Country

 

Reserves at December 31, 2019 (MMboe)(1)(6)

Country

Field

Proved (1P)

Probable

Proved Plus
Probable (2P)

 

Hydrocarbon Type

Gross

Net

Gross

Net

Gross

Net

 

Colombia

Quifa SW block

57.7

50.3

4.2

3.6

61.9

53.9

 

Heavy oil

Other heavy oil blocks(2)

28.7

27.3

26.1

25.7

54.8

53.0

 

Heavy oil

Light/medium oil blocks(3)

26.7

24.9

19.4

18.0

46.1

42.8

 

Light and medium oil and
associated natural gas

Natural gas blocks(4)

1.7

1.7

0.7

0.7

2.4

2.4

 

Natural gas

Sub-total

114.7

104.2

50.5

48.0

165.2

152.1

 

Oil and natural gas

Peru

Light/medium oil and
natural gas blocks (5)

0.7

0.6

5.3

5.0

6.0

5.6

 

Light and medium oil and
associated natural gas

 

Total at Dec. 31, 2019

115.4

104.8

55.8

53.0

171.2

157.7

 

Oil and natural gas

Total at Dec. 31, 2018

115.8

104.9

54.8

50.1

170.6

154.9

   

Difference

(0.4)

(0.1)

1.0

2.8

0.6

2.7

 

2019 Production

25.8

23.4

Total Reserves
Incorporated

26.4

26.2

 
                 

1See "Boe Conversion" section in the "Advisories", at the end of this press release.

2Includes Cajua, Jaspe, Quifa North, Sabanero, and CPE-6 blocks.

3Includes Cubiro, Cravo Viejo, Canaguaro, Guatiquia, Casimena, Corcel, Neiva, Cachicamo, Guaduas and other producing blocks.

4Includes La Creciente block.

5Includes onshore Block 192 and offshore Block Z1.

6Gross refers to Frontera's WI before royalties. Net refers to Frontera's WI after royalties.

 

2019 2P Reserves Reconciliation

 

Oil Equivalent Gross 2P
Reserves (MMboe)(1)(2)

Oil Equivalent Net 2P
Reserves (MMboe)(1)(2)

December 31, 2018

170.6

154.9

Net Additions(3)

7.0

7.0

Economic and Technical Revisions

19.3

19.2

Production(4)

(25.8)

(23.4)

December 31, 2019

171.2

157.7

 

1See "Boe Conversion" section in the "Advisories", at the end of this press release.

2Gross refers to Frontera's WI before royalties. Net refers to Frontera's WI after royalties.

3Includes discoveries, extensions and improved recoveries.

4Production represents the production for the twelve month period ended December 31, 2019 for assets with associated reserves. Production associated with exploration and evaluation assets are included in production volumes for financial reporting purposes.

 

Five Year Crude Oil Price Forecast - D&M Reserves Reports(1)

(US$/bbl)

2019

 

2020

 

2021

 

2022

 

2023

 

2024

 

Brent Oil Price Forecast - 2019

65.92

 

69.47

 

71.65

 

73.72

 

75.58

 

77.39

 

Brent Oil Price Forecast - 2020

64.16 (2)

 

66.33

 

67.94

 

70.06

 

71.66

 

73.27

 
                         

1The 2019 price forecast reflects prices used in the December 31, 2018 reserves report and the 2020 price forecast reflects prices used in the December 31, 2019 reserves report.

2Reflects the actual 2019 Average Brent Oil Price.

 

Colombia Reserve Life Index ("RLI")(1)

 

December 31, 2018(2)

December 31, 2019(3)

Total Proved (1P)

4.9 years

4.9 years

Total Proved Plus Probable (2P)

7.1 years

7.1 years

Total Proved Plus Probable Plus Possible (3P)

8.9 years

9.2 years

 

1RLI does not have a standardized meaning and may not be comparable to similar measures presented by other companies, and therefore should not be used to make such comparisons.

2Calculated by dividing the amount of relevant gross reserves category by the average 2018 Colombia daily production of 62,861 boe/d, annualized.

3Calculated by dividing the amount of relevant gross reserves category by the average 2019 Colombia daily production of 63,625 boe/d, annualized.

 

Net Present Value Before Tax Summary - D&M Reserve Report (2020 Brent Forecast)(1)

Reserves Category

December 31, 2018

 

December 31, 2019

 

December 31, 2019

 
 

NPV10 ($ 000's)(2)

 

NPV10 ($ 000's)(2)

 

NPV10 (C$/share)(3)

 

Proved Developed Producing (PDP)

730,921

 

844,515

 

11.14

 

Proved Developed Not Producing

86,388

 

72,282

 

0.95

 

Proved Undeveloped

610,844

 

809,323

 

10.68

 

Total Proved (1P)

1,428,153

 

1,726,120

 

22.77

 

Probable

778,327

 

788,289

 

10.40

 

Total Proved Plus Probable (2P)

2,206,480

 

2,514,409

 

33.17

 

Possible(4)

664,724

 

875,175

 

11.54

 

Total Proved Plus Probable Plus Possible (3P)

2,871,204

 

3,389,584

 

44.71

 
 

1See "Advisories" at the end of this press release. The forecast prices used in the calculation of the present value of future net revenue are based on the D&M January 1, 2019 and D&M January 1, 2020 price forecasts. The D&M January 1, 2020 price forecast will be included in the Company's NI 51-101F1 disclosure for 2019.

2Includes future development capital ("FDC") as at December 31, 2018 of $1,153 million for 1P and $1,624 million for 2P and FDC as at December 31, 2019 of $1,173 million for 1P and $1,773 million for 2P.

3Calculated by dividing the December 31, 2019 NPV10 value by 98,481,830 fully diluted shares outstanding as at December 31, 2019 and a USD:CAD foreign exchange rate of 1.2990:1. Per share valuations do not consider any value attributed to the Company's material ownership in midstream and infrastructure assets as well as any equity value for its ownership in CGX Energy Inc. (TSXV:OYL).

4Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10 percent probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.

 

Net Present Value After Tax Summary - D&M Reserves Report (2020 Brent Forecast)(1)(2)

Reserves Category

December 31, 2018

 

December 31, 2019

 

December 31, 2019

 

$ (000's), except per share data

NPV10 ($ 000's)(3)

 

NPV10 ($ 000's)(3)

 

NPV10 (C$/share)(4)

 

Proved Developed Producing (PDP)

694,152

 

758,397

 

10.00

 

Proved Developed Not Producing

80,710

 

64,842

 

0.86

 

Proved Undeveloped

577,208

 

725,158

 

9.57

 

Total Proved (1P)

1,352,070

 

1,548,397

 

20.42

 

Probable

566,372

 

570,464

 

7.52

 

Total Proved Plus Probable (2P)

1,918,443

 

2,118,861

 

27.95

 

Possible(5)

471,364

 

623,339

 

8.22

 

Total Proved Plus Probable Plus Possible (3P)

2,389,807

 

2,742,200

 

36.17

 
 

1See "Advisories" at the end of this press release. The forecast prices used in the calculation of the present value of future net revenue are based on the D&M January 1, 2019 and D&M January 1, 2020 price forecasts. The D&M January 1, 2020 price forecast will be included in the Company's NI 51-101F1 disclosure for 2019.

2The tax calculations used in the preparation of the Reserves Report are done at the field level in accordance with standard practice, and do not reflect the actual tax position at the corporate level which may be significantly different.

3Includes future development capital ("FDC") as at December 31, 2018 of $1,153 million for 1P and $1,624 million for 2P and FDC as at December 31, 2019 of $1,173 million for 1P and $1,773 million for 2P.

4Calculated by dividing the December 31, 2019 NPV10 value by 98,481,830 fully diluted shares outstanding as at December 31, 2019 and a USD:CAD foreign exchange rate of 1.2990:1. Per share valuations do not consider any value attributed to the Company's material ownership in midstream and infrastructure assets as well as any equity value for its ownership in CGX Energy Inc. (TSXV:OYL).

5Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10 percent probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.

 

Calculation of 2019 Reserve Metrics - Colombia Gross

 

Proved (1P)

 

Proved Plus Probable (2P)

 

Capital Expenditures ($ 000's)(1)

288,975

 

288,975

 

Capital Expenditures - Changes in FDC ($ 000's)(2)

20,566

 

148,340

 

Total Capital ($ 000's)

309,541

 

437,315

 
     

Reserve Additions (000's boe)(3)

25,538

 

25,053

 
     

F&D Costs ($/boe)(4)

11.32

 

11.53

 

F&D Costs ($/boe), including FDC(4)

12.12

 

17.46

 
 

1Calculated using unaudited estimated capital expenditure as at December 31, 2019. See "Unaudited Financial Information" section in the "Advisories", at the end of this press release.

2Total future development costs associated with Colombia are included in the table below.

3Gross reserves represent Frontera's WI before royalties.

4The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year. F&D costs are calculated as capital expenditures divided by reserve additions for F&D Costs ($/boe) and total capital divided by reserve additions for F&D Costs ($/boe), including FDC. F&D costs does not have a standardized meaning and may not be comparable to similar measures presented by other companies, and therefore should not be used to make such comparisons.

 

Future Development Costs - Using D&M Forecast Prices and Costs(1)

Colombia ($ 000's)

Total Proved (1P)

 

Total Proved Plus Probable (2P)

 

2020

267,691

 

309,983

 

2021

207,017

 

313,163

 

2022

201,403

 

258,476

 

2023

172,711

 

228,033

 

2024

113,656

 

201,183

 

Beyond 2024

210,880

 

401,875

 

Total undiscounted

1,173,358

 

1,712,713

 
 

1See "Advisories" at the end of this press release. The forecast prices used in the calculation of future development costs are based on the D&M January 1, 2020 price forecasts. The D&M January 1, 2020 price forecast will be included in the Company's NI 51-101F1 disclosure for 2019.

 

Notice of Fourth Quarter and Full Year 2019 Results

Fourth quarter and full year 2019 results are expected to be released after market on Thursday, March 5, 2020 followed by a conference call for investors and analysts on Friday, March 6, 2020 at 8:00 a.m. (MST) and 10:00 a.m. (EST/GMT-5). Participants will include Gabriel de Alba, Chairman of the Board of Directors, Richard Herbert, Chief Executive Officer, David Dyck, Chief Financial Officer and select members of the senior management team.

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

Participant Number (International/Local):   

(647) 427-7450

Participant Number (Toll free Colombia):

01-800-518-0661

Participant Number (Toll free North America):   

(888) 231-8191

Conference ID:

7833979

Webcast Audio:                                                          

www.fronteraenergy.ca

 

A replay of the conference call will be available until 11:59 p.m. (EST/GMT-5) Friday, March 20, 2020.

Encore Toll Free Dial-in Number:                         

1-855-859-2056

Local Dial-in Number:                                                

(416)-849-0833

Encore ID:                                                      

7833979

 

About Frontera:

Frontera Energy Corporation is a Canadian public company and a leading explorer and producer of crude oil and natural gas, with operations focused in South America. The Company has a diversified portfolio of assets with interests in more than 40 exploration and production blocks in Colombia, Peru, Ecuador and Guyana. The Company's strategy is focused on sustainable growth in production and reserves. Frontera is committed to conducting business safely, in a socially and environmentally responsible manner. Frontera's common shares trade on the Toronto Stock Exchange under the ticker symbol "FEC".

If you would like to receive News Releases via e-mail as soon as they are published, please subscribe here: http://fronteraenergy.mediaroom.com/subscribe

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, statements regarding estimates and/or assumptions in respect of production, costs and revenue, reserve and resource estimates, potential resources and reserves) are forward-looking statements. In particular, statements relating to "reserves" are deemed to be forward-looking statements since they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and that the reserves can be profitably produced in the future. 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: uncertainty of estimates of capital and operating costs, production estimates and estimated economic return; uncertainties associated with estimating oil and natural gas reserves; failure to establish estimated resources or reserves; volatility in market prices for oil and natural gas; fluctuation in currency exchange rates; inflation; changes in equity markets; perceptions of the Company's prospects and the prospects of the oil and gas industry in Colombia and the other countries where the Company operates or has investments; uncertainties relating to the availability and costs of financing needed in the future; the uncertainties involved in interpreting drilling results and other geological data; and the other risks disclosed under the heading "Risk Factors" and elsewhere in the Company's annual information form dated March 13, 2019 filed on SEDAR at www.sedar.com. 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.

Unaudited Financial Information

This news release contains certain financial and operating information based on unaudited financial results for the year ended December 31, 2019. The limitations discussed above for "Cautionary Note Concerning Forward-Looking Statements" also applies to the unaudited financial results used in this news release. These estimated amounts may change as a result of the financial statements being audited which changes may be material. The Company anticipates filing its audited financial statements and related managements discussion and analysis for the year ended December 31, 2019 on SEDAR on March 5, 2020. Per share information is based on the total number of the Company's common shares outstanding at December 31, 2019 on a fully diluted basis.

Non-Standardized Measures

This news release includes non-standardized measures. Readers are cautioned that these measures, such as reserve life index, reserves replacement ratio, NPV per share and finding and development cost, should not be construed as alternative measures of financial performance. Such measures have been included to provide readers with additional means to evaluate the Company's performance but these non-standardized measures are not reliable indicators of the Company's future performance and therefore must not be relied upon unduly. The Company's method of calculating these measures may differ from other companies and, accordingly, they may not be comparable to similar measures used by other companies. Readers are cautioned that the information provided or derived by these measures should not be relied upon for investment purposes.

Advisory Note Regarding Oil and Gas Information

The reserves information contained in this press release has been prepared in accordance with NI 51-101 but only present a portion of the disclosure required thereunder. Complete reserves disclosure required in accordance with NI 51-101 will be available on SEDAR at www.sedar.com on or around March 5, 2020.  Actual oil and natural gas reserves and future production may be greater than or less than the estimates provided in this news release. There is no assurance that forecast prices and costs assumed in the Reserves Report, and presented in this this news release, will be attained and variances from such forecast prices and costs could be material. The estimated future net revenue from the production of the disclosed oil and natural gas reserves in this news release does not represent the fair market value of these reserves.

The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation.

There are numerous uncertainties inherent in estimating quantities of crude oil, reserves and the future cash flows attributed to such reserves. The reserve and associated cash flow information set forth above are estimates only. In general, estimates of economically recoverable crude oil and natural gas reserves and the future net cash flows therefrom are based upon a number of variable factors and assumptions, such as historical production from the properties, production rates, ultimate reserve recovery, timing and amount of capital expenditures, marketability of oil and natural gas, royalty rates, the assumed effects of regulation by governmental agencies and future operating costs, all of which may vary materially. For those reasons, estimates of the economically recoverable crude oil and natural gas reserves attributable to any particular group of properties, classification of such reserves based on risk of recovery and estimates of future net revenues associated with reserves prepared by different engineers, or by the same engineers at different times, may vary.

The Company's actual production, revenues, taxes and development and operating expenditures with respect to its reserves will vary from estimates thereof and such variations could be material. All evaluations and reviews of future net revenue are stated prior to any provisions for interest costs or general and administrative costs and after the deduction of estimated future capital expenditures for wells to which reserves have been assigned. The tax calculations used in the preparation of the Reserves Report are done at the field level in accordance with standard practice, and do not reflect the actual tax position at the corporate level which may be significantly different.

Boe Conversion 

The term "boe" is used in this news release. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of cubic feet to barrels is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In this news release, boe has been expressed using the Colombian conversion standard of 5.7 Mcf: 1 bbl required by the Colombian Ministry of Mines and Energy. In addition, as the value ratio between oil and natural gas based on current market values is significantly different from the energy equivalency of 5.7:1, utilizing a conversion of 5.7:1 may be misleading as an indication of value.

Definitions:

1P

Proved reserves

2P

Proved plus probable reserves

bbl(s)

Barrel(s) of oil

boe

Refer to "Boe Conversion" disclosure above

boe/d

Barrel of oil equivalent per day

Gross Production

Gross production before royalties represents the Company's working interest volumes, before royalties

Mboe

Thousand barrels of oil equivalent

MMboe

Million barrels of oil equivalent

Mcf

Thousand cubic feet

Net Production

Net production after royalties represents the Company's working interest volumes, net of royalties

WI

Working interest

 

"Proved Developed Producing Reserves" are those reserves that are expected to be recovered from completion intervals open at the time of the estimate.  These reserves may be currently producing or, if shut-in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty.

"Proved Developed Non-Producing Reserves" are those reserves that either have not been on production or have previously been on production but are shut-in and the date of resumption of production is unknown.

"Proved Undeveloped Reserves" are those reserves expected to be recovered from known accumulations where a significant expenditure (e.g. when compared to the cost of drilling a well) is required to render them capable of production.  They must fully meet the requirements of the reserves category (proved, probable, possible) to which they are assigned.

"Proved" reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.

"Probable" reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.

"Possible" reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10 percent probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves.

SOURCE Frontera Energy Corporation

For further information: Grayson Andersen, Corporate Vice President, Capital Markets, +57-314-250-1467, ir@fronteraenergy.ca, www.fronteraenergy.ca