Parex makes 500 million dollar bid for Frontera assets

Frontera Energy Corporation, a company based in Canada, has announced that its board of directors has determined a binding offer from Parex Resources Inc. to be a superior proposal for its upstream oil and gas operations in Colombia. This determination follows a previous definitive agreement with GeoPark Limited announced earlier this year.

The new proposal from Parex is valued at $500 million in cash, a package that includes the assumption of debt and a contingent payment of $25 million. This offer significantly exceeds the $375 million agreement previously reached with GeoPark for the same exploration and production assets.

Should the existing deal with GeoPark fall through, Frontera would be required to pay a $25 million purchaser break fee. GeoPark has been formally advised of the superior offer and has five business days, ending March 12, to amend its current agreement if it chooses to do so.

The GeoPark Arrangement Agreement remains in effect, and the Frontera Board of Directors continues to act in accordance with its fiduciary duties and the terms of the GeoPark Arrangement Agreement.

Frontera remains one of the largest private producers in the region, with a portfolio of 17 exploration and production blocks, including the Quifa and Cubiro fields. The company reported average annual production of 38,934 barrels of oil equivalent per day at the end of the third quarter of last year.

The board is reviewing Frontera’s latest communication in order to make a decision.