Frontera May Purchase up to 3,949,454 Common Shares
Representing Approximately 10% of the Company’s Public Float
CALGARY, AB, Nov. 16, 2023 /CNW/ – Frontera Energy Corporation (TSX: FEC) (“Frontera” or the “Company“) announces that the Toronto Stock Exchange (the “TSX“) has accepted its notice to initiate a normal course issuer bid (the “NCIB“) for its common shares (the “Common Shares“).
Pursuant to the NCIB, Frontera may purchase up to 3,949,454 Common Shares during the 12-month period commencing November 21, 2023, and ending November 20, 2024, representing approximately 10% of the Company’s “public float” (as calculated in accordance with the TSX rules) as at November 8, 2023. As at November 8, 2023, there were 85,431,716 Common Shares issued and outstanding of which 39,494,549 constitute the “public float”, calculated in accordance with the rules of the TSX. There are no persons acting jointly or in concert with the Company in respect of the NCIB.
The average daily trading volume of the Common Shares was 63,190 Common Shares over the period between May 1, 2023 and October 31, 2023. Consequently, daily purchases through the facilities of the TSX will be limited to 15,797 Common Shares, other than block purchase exceptions.
Frontera believes that, from time to time, the market price of its Common Shares may not fully reflect the underlying value of its business, future prospects and financial position. In such circumstances, Frontera may purchase for cancellation outstanding Common Shares, thereby benefitting all shareholders by increasing the underlying value of the remaining Common Shares.
In connection with its NCIB, Frontera has entered into an automatic share purchase plan (the “Plan“) with its designated broker, BMO Nesbitt Burns Inc. (“BMO“), to facilitate the purchase of Common Shares under the NCIB. The Plan allows for purchases by the Company of its Common Shares at any time, including, without limitation, when the Company would ordinarily not be permitted to make purchases due to regulatory restriction or self-imposed blackout periods. Purchases will be made by BMO based upon the parameters prescribed by the TSX and the terms of the parties’ written agreement. The Plan has been pre-cleared by the TSX and will be implemented at the time the NCIB commences.
Purchases subject to the NCIB will be carried out pursuant to open market transactions through the facilities of the TSX or alternative Canadian trading systems, if eligible, by BMO on behalf of Frontera in accordance with the Plan and applicable regulatory requirements. The price to be paid by Frontera for any Common Share will be the market price at the time of acquisition, plus brokerage fees, or such other price as the TSX may permit. All Common Shares purchased by Frontera under the NCIB will be returned to treasury and cancelled.
The Company’s indenture, dated as of June 21, 2021, pursuant to which US$400 million aggregate principal amount of 7.875% senior notes of the Company due 2028 were issued (the “Indenture“), imposes certain restrictions on the Company’s ability to repurchase its Common Shares. However, based on other provisions of the Indenture, the Company is not currently restricted from completing the purchases under the NCIB.
Under its normal course issuer bid that expired on March 16, 2023, Frontera was authorized to repurchase for cancellation 4,787,976 Common Shares and Frontera purchased for cancellation 4,270,100 Common Shares between March 17, 2022, and March 16, 2023, at a volume weighted average price of C$12.45 per share. Purchases were carried out pursuant to open market transactions through the facilities of the TSX or alternative Canadian trading systems, by BMO, on behalf of the Corporation in accordance with an automatic share purchase plan and applicable regulatory requirements.
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 27 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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This news release contains forward-looking information within the meaning of Canadian securities laws. Forward-looking information relates to activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, repurchases of Common Shares pursuant to the NCIB). All information other than historical fact is forward-looking information.
Forward-looking information reflects the current expectations, assumptions and beliefs of the Company based on information currently available to it and considers the Company’s experience and its perception of historical trends, including expectations and assumptions relating to commodity prices and interest and foreign exchange rates; the current and expected impacts of the COVID-19 pandemic, actions of the Organization of Petroleum Exporting Countries (OPEC+) and the impact of the Russia–Ukraine conflict and the Israel-Palestine conflict, and the expected impact of measures that the Company has taken and continues to take in response to these events; expectations regarding the Company’s ability to manage its liquidity and capital structure and generate sufficient cash to support operations, capital expenditures and financial commitments; the performance of assets and equipment; the Company’s ability to achieve increased oil and water handling capacity at Quifa; the availability and cost of labor, services and infrastructure; the execution of exploration and development projects; the receipt of any required regulatory approvals and outcome of discussions with governmental authorities; the success of the Company’s hedging strategy; and the impact and success of the Company’s ESG strategies.
Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be placed on such information. Forward-looking information is subject to a number of risks and uncertainties, some that are similar to other oil and gas companies and some that are unique to the Company. The actual results may differ materially from those expressed or implied by the forward-looking information, 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. The Company’s annual information form dated March 1, 2023, its annual management’s discussion and analysis for the year ended December 31, 2022, and other documents it files from time to time with securities regulatory authorities describe the risks, uncertainties, material assumptions and other factors that could influence actual results and such factors are incorporated herein by reference. Copies of these documents are available without charge by referring to the company’s profile on SEDAR+ at www.sedarplus.ca. All forward-looking information 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 information, whether as a result of new information, future events, or results or otherwise.
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SOURCE Frontera Energy Corporation
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