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Frontera Energy Corporation (TSE:FEC)
TSX:FEC
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Frontera Energy
(TSX:FEC)
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Rating:53Neutral
Price Target:
C$6.00
▼(-0.66% Downside)
Frontera Energy's overall stock score reflects significant financial challenges, with declining revenue and profitability being the most impactful factors. Technical analysis provides some support with mixed signals, while valuation remains a concern due to negative earnings. The attractive dividend yield offers some compensation for the risks involved.
Positive Factors
Cash Flow Generation
Strong cash flow generation indicates Frontera Energy's ability to sustain operations and invest in growth despite profitability challenges.
Debt Management
Manageable leverage provides Frontera Energy with financial flexibility to navigate market fluctuations and invest in strategic initiatives.
Strategic Partnerships
Strategic partnerships enhance Frontera Energy's market reach and operational efficiency, supporting long-term growth and competitive positioning.
Negative Factors
Declining Revenue
Declining revenue growth poses a risk to Frontera Energy's ability to maintain market share and profitability, impacting long-term sustainability.
Profitability Challenges
Substantial losses and negative profit margins highlight operational inefficiencies, threatening Frontera Energy's financial health and growth potential.
Operational Inefficiencies
Negative EBIT and EBITDA margins suggest operational inefficiencies, which could hinder Frontera Energy's ability to improve profitability and competitiveness.
Frontera Energy (FEC) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$431.30M
Dividend Yield4.07%
Average Volume (3M)44.06K
Price to Earnings (P/E)―
Beta (1Y)1.15
Revenue Growth-2.65%
EPS Growth-591.26%
CountryCA
Employees1,068
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.52
Shares Outstanding69,677,150
10 Day Avg. Volume68,054
30 Day Avg. Volume44,062
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)0.29
Price to Sales (P/S)0.45
P/FCF Ratio3.16
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Frontera Energy Business Overview & Revenue Model
Company DescriptionFrontera Energy Corporation (FEC) is a Canadian-based oil and gas exploration and production company primarily focused on operations in Colombia and Peru. The company engages in the exploration, development, and production of oil and natural gas resources, leveraging its extensive portfolio of assets in the Andean region. Frontera is committed to sustainable practices and aims to optimize production while minimizing environmental impact. Its core products include crude oil and natural gas, which are sold in domestic and international markets.
How the Company Makes MoneyFrontera Energy generates revenue primarily through the sale of crude oil and natural gas. The company operates oil fields and natural gas assets, which contribute to its production volumes. Revenue is derived from the sale of these hydrocarbons at prevailing market prices, with significant contributions coming from export markets. Additionally, Frontera's revenue model includes long-term contracts with various customers, which provide stability in cash flow. The company benefits from strategic partnerships and alliances that enhance its operational efficiency and market access. Market factors such as global oil prices, demand fluctuations, and geopolitical dynamics in the regions where it operates also play a critical role in influencing its earnings.
Frontera Energy Earnings Call Summary
Earnings Call Date:Aug 13, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 26, 2026
Earnings Call Sentiment Neutral
Frontera Energy demonstrated strong operational and financial management by reducing costs, increasing production, and effectively returning capital to shareholders. However, significant impairment charges and challenges in Guyana contributed to a net loss, balancing the positive aspects.Q2-2025 Updates
Positive Updates
Strong Financial Performance
Frontera delivered $76.1 million in operating EBITDA and ended the quarter with a strong cash balance of $197.5 million. The company also successfully completed an $80 million tender offer and consent solicitation of its senior notes, reducing upstream net debt by 20%.
Increased Production
Total production increased to 41,055 barrels per day, driven by increased processing capacity, investments in new flow lines, and successful well interventions.
Cost Reductions
Production costs were reduced by 10.3% to $9.1 per barrel quarter-over-quarter, and transportation costs were reduced by 5.7% to $11.62 per barrel.
Successful Capital Return Strategy
Over the last 12 months, Frontera returned over $144 million to shareholders through dividends and share buybacks, highlighting its commitment to returning capital to investors.
Sustainability and Operational Efficiency
Frontera achieved a total recordable incident rate of 0.71 and a water reuse rate of 37.6% within operational activities, reflecting progress towards 2028 sustainability goals.
Negative Updates
Impairment Charges
The company recognized non-cash impairment charges totaling $477 million related to the Corentyne license and Ecuador asset divestment, resulting in a net loss of $455.2 million for the quarter.
Challenges in Guyana
The 90-day consultation and negotiation period with the Government of Guyana ended without resolution, leading to uncertainty and an impairment of over $430 million related to the Corentyne block.
Lower Brent Prices Impact EBITDA
Operating EBITDA decreased by 9%, primarily due to lower Brent prices, which were 11% lower quarter-over-quarter.
Ecuador Asset Sale at Low Valuation
Divestment of non-core Perico and Espejo fields in Ecuador for $7.8 million plus contingent consideration was completed, potentially reflecting lower-than-expected asset valuation.
Company Guidance
During the second quarter of 2025, Frontera Energy provided guidance reflecting its strategic focus on operational efficiency and financial stability amid market volatility. The company achieved an operating EBITDA of $76.1 million and an adjusted infrastructure EBITDA of $27.1 million, ending the quarter with a strong cash balance of $197.5 million. It returned capital to investors through an $80 million tender offer and a substantial issuer bid of CAD 91 million, while also reducing its upstream net debt by 20%. Production increased to 41,055 barrels per day, with a 10.3% reduction in production costs to $9.1 per barrel and a 5.7% reduction in transportation costs to $11.62 per barrel. Despite a net loss of $455.2 million due to a $477 million impairment related to the Corentyne block, the company maintained its commitment to enhancing shareholder value through dividends and share buybacks, totaling over $144 million returned to shareholders in the past year. It adjusted its 2025 production guidance to 39,500-41,000 BOE per day and revised capital expenditure guidance downwards by $20 million, aiming for operating EBITDA of $320-$360 million at a $70 Brent price.Frontera Energy Financial Statement Overview
Summary
Frontera Energy faces significant financial challenges, with declining revenue and profitability. The income statement shows negative revenue growth and substantial net losses. The balance sheet indicates moderate leverage but poor profitability, with a negative return on equity. Cash flow generation is a relative strength, with positive free cash flow growth, but operational inefficiencies need addressing.Income Statement
Frontera Energy's income statement shows significant challenges with declining revenue and profitability. The TTM data reveals a negative revenue growth rate of -1.97% and a net profit margin of -40.22%, indicating substantial losses. The EBIT and EBITDA margins are also negative, reflecting operational inefficiencies. Historically, the company had positive margins, but recent performance has deteriorated.45
Neutral
Balance Sheet
The balance sheet indicates moderate financial stability with a debt-to-equity ratio of 0.42, suggesting manageable leverage. However, the return on equity is negative at -27.06%, highlighting poor profitability. The equity ratio is not explicitly calculated, but the company's equity position appears relatively stable compared to its total assets.55
Neutral
Cash Flow
Cash flow analysis shows some positive aspects, with a free cash flow growth rate of 53.62% in the TTM period. The operating cash flow to net income ratio is 0.82, indicating that cash generation is relatively strong compared to net losses. However, the free cash flow to net income ratio is low at 0.25, reflecting challenges in converting earnings into cash.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.07B | 1.13B | 1.15B | 1.37B | 926.63M | 658.19M |
| Gross Profit | 141.33M | 212.78M | 516.50M | 506.77M | 350.97M | -187.13M |
| EBITDA | -133.60M | 390.90M | 523.25M | 777.26M | 807.66M | -142.70M |
| Net Income | -422.08M | -24.16M | 193.50M | 286.62M | 628.13M | -481.91M |
Balance Sheet | ||||||
| Total Assets | 2.44B | 2.90B | 3.02B | 2.74B | 2.61B | 2.06B |
| Cash, Cash Equivalents and Short-Term Investments | 220.82M | 192.58M | 159.67M | 289.85M | 257.50M | 232.29M |
| Total Debt | 532.79M | 506.04M | 536.82M | 511.55M | 560.13M | 538.24M |
| Total Liabilities | 1.67B | 1.17B | 1.18B | 1.15B | 1.16B | 1.30B |
| Stockholders Equity | 1.24B | 1.72B | 1.82B | 1.58B | 1.40B | 703.85M |
Cash Flow | ||||||
| Free Cash Flow | 154.96M | 159.38M | -24.60M | 204.82M | 15.62M | 129.04M |
| Operating Cash Flow | 442.13M | 510.03M | 411.79M | 620.48M | 327.38M | 226.78M |
| Investing Cash Flow | -302.45M | -339.25M | -484.32M | -383.27M | -186.94M | -178.53M |
| Financing Cash Flow | -208.58M | -128.86M | -62.66M | -193.60M | -108.38M | -132.53M |
Frontera Energy Technical Analysis
Positive
6.04
Price Trends
5.78
Positive
5.78
Positive
5.84
Positive
Market Momentum
0.05
Positive
52.99
Neutral
45.47
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FEC, the sentiment is Positive. The current price of 6.04 is below the 20-day moving average (MA) of 6.24, above the 50-day MA of 5.78, and above the 200-day MA of 5.84, indicating a neutral trend. The MACD of 0.05 indicates Positive momentum. The RSI at 52.99 is Neutral, neither overbought nor oversold. The STOCH value of 45.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:FEC.
Frontera Energy Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | C$479.67M | 19.27 | 10.64% | ― | 40.83% | 26.01% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
64 Neutral | C$351.50M | 3.41 | 14.69% | 21.85% | -2.90% | -31.97% | |
61 Neutral | C$336.84M | -36.14 | -2.61% | 12.70% | 53.79% | -126.63% | |
53 Neutral | C$431.30M | -0.80 | -28.23% | 4.07% | -2.65% | -591.26% | |
50 Neutral | C$530.22M | -2.58 | -14.96% | ― | -11.85% | -307.86% | |
49 Neutral | C$426.42M | -36.65 | -7.05% | ― | 77.10% | -74.02% |
* Energy Sector Average
TSE:FEC
Frontera Energy
6.14
-1.66
-21.27%
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8.12
0.33
4.24%
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0.38
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-25.49%
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48.03%
TSE:CEI
Coelacanth Energy, Inc.
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TSE:LGN
Logan Energy Corp
0.84
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18.31%
Frontera Energy Corporate Events
Delistings and Listing ChangesStock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
Frontera Energy Reports Strong Q3 2025 Results and Expands U.S. Market Presence
Positive
Nov 14, 2025
Frontera Energy Corporation reported a net income of $25.4 million for the third quarter of 2025, driven by insurance recoveries and strong operational performance. The company achieved significant cost reductions and efficiency improvements, resulting in expected overhead savings of $10-$15 million. Frontera also declared a quarterly dividend and continued its share repurchase program, demonstrating a commitment to returning capital to shareholders. Additionally, the company’s qualification for the OTCQX Best Market enhances its visibility and trading liquidity in the U.S., further strengthening its investor base and market presence.
M&A TransactionsBusiness Operations and Strategy
Frontera Energy to Spin Off Colombian Infrastructure Business
Positive
Nov 14, 2025
Frontera Energy Corporation announced a strategic spin-off of its Colombian Infrastructure business, resulting in the creation of two independent entities: Frontera Exploration & Production and Frontera Infrastructure. This move aims to unlock shareholder value by allowing each company to focus on its core operations and strategic priorities, with the spin-off expected to be completed in the first half of 2026, pending shareholder and regulatory approvals.
Financial Disclosures
Frontera Energy to Announce Q3 2025 Financial Results
Neutral
Oct 31, 2025
Frontera Energy Corporation announced it will release its financial and operational results for the third quarter of 2025 on November 13, 2025, after market close. A conference call for investors and analysts is scheduled for November 14, 2025, featuring key members of the company’s senior management team. This announcement is significant for stakeholders as it provides insights into the company’s financial health and operational performance, potentially impacting its market positioning and investor relations.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.