Frontera Energy Corporation Q1 2023 Earnings Call
In additional funding to pursue strategic investment opportunities with a midstream business.
Subsequent to the quarter end the company designated Frontera energy can we get a holding LTV and Frontera energy, We Gotta Corp, as unrestricted subsidiaries.
And release from <unk> Energy, We Garner Corp. As a note we're on tour for a senior bonds due 2028.
The designation is a positive forward step as a company nears the completion of our two well commitment in Guyana and support ongoing capital discipline.
Speaking of Guyana, I am excited to confirm that from terror and its joint venture partner's CTX hub encounter oil bearing intervals at the way one well in the Western Channel Fund complex one of the northern portion of the current and block informations of maturation and companion pages.
The current depth of the <unk> well is 19142 feet and drilling is progressing towards a planned TD of 20500 feet Orlando will provide more details on <unk> in a few minutes.
We remain committed to successfully and safely completing this potential transformational opportunity.
Finally, as you may have noticed beginning with last quarter disclosure documents. The company has committed to providing greater clarity and insight into its three core businesses through its quarterly results on.
And press releases.
Statements managements discussion and analysis.
During this conference calls.
You'll hear more about this in a moment.
As mentioned the company remains focused on unlocking value from our three core businesses upstream midstream and Guyana to achieve its strategic priorities and unlock shareholder value.
I'll now turn the call over to Orlando Cabrera.
From the CEO and our CFO <unk>, who will share their views on <unk> first quarter results and the performance of our three core businesses Orlando.
Thank you Gary and good morning, everyone and thank you for joining making.
And thank you for taking the time to join us.
I am pleased with Frontera us first quarter operational and financial results.
Despite community blockades in early February .
Which temporarily shutting in production at our key five Cpc's operations.
The company's third quarter production was largely in line with the prior quarter.
Year to date, we are delivering average daily production of approximately 41800 Boe per day.
And so far in the second quarter of the year, we have.
Approximately 42500 Boe per day.
Our first quarter average production and strong production performance. So far in the second quarter is a testament delivers versatility and robustness of our assets and our operations teams hard work and dedication to quickly return production.
Pre blockade levels.
Taking a closer look at our three core businesses.
In our Columbia on a grower upstream segment.
We drilled 17 development wells at Cooper <unk>.
<unk> and <unk> blocks.
We currently have five drilling rigs and two workover rigs active at our key for CPC.
Widow, and courtyard Waikiki, our blocks in Colombia.
We drilled seven production wells at <unk> five production wells at <unk> during the quarter.
As we have highlighted previously increasing water handling capacity at key phase key two front there is efforts to grow production.
Our current water handling capacity at key funds is approximately one 5 million barrels of water per day.
Earlier this year.
We began commissioning cider.
Our reverse osmosis water treatment facility to process water from our key Fob block operations.
As of April of this year decide our plan has already process, one 5 million barrels of water as part of its commissioning program.
Providing irrigation source water to the company's nearby pro our downloads palm oil plantation.
I will note that every additional 100000 barrels of water handle it increases our net production at key fronts.
<unk> 1200 barrels per day.
At <unk> the.
The company drilled five horizontal wells in the first quarter.
Which increased gross average production.
3873 barrels of oil per day of heavy crude in March.
And current gross average production is 4860 barrels of oil per day.
We are also excited about the early success of our ACD program, a technology that has reduced water production per well by more than 50%.
Yes.
In the three wells, we tested on technology.
Sure.
Turning now to our midstream Colombian business.
The company's midstream, Colombia segment income was $16 $9 million in the first quarter of the year.
Portal area liquid terminal revenues increased by 10% compared with the same period of 2022 with third party volumes comprising 82% of total liquids terminal revenues.
General cargo terminal revenues increased by 4% compared with the same period in 2021.
We are maintaining a strong share of roll on roll off business and seeking potential growth in bulk and container opportunities.
Proportional EBITDA for the midstream segment income.
In Colombia for the first quarter of 2020 through three was $28 2 million.
Now our Gaiam exploration business.
On January 23rd 2023, Frontera in CTX joint venture partners in the petroleum prospecting licenses for the current team block offshore Guyana announced the spot of the way one well.
To date, the well has been successfully drilled to ADESA of 19142 feet and we anticipate reaching a total depth of 20500 feet.
The way one well is located approximately 14 kilometers northwest of the joint ventures previews <unk> one light oil.
And condensate discovery.
The well has encountered oil bearing intervals in the Western Channel fund complex of the northern portion of the current team block informations of maturation and companion ages.
Our comprehensive logging campaign and demonstration in Campania intervals indicate the presence of oil confirmed by downhole by downhole analysis.
Logging, while drilling and cuttings indicate the presence of hydrocarbons in the upper portion of this Antonio.
Fluid samples have not yet been fully obtain.
Sidewall core samples will be attempted in the San Antonio integral when drilling resumes.
Preliminary indications from the secondary targets in demonstration and companion are positive.
However, no assurance can be given that these activities will ultimately produce hydrocarbons in commercial quantities.
While perform an additional well logging and data acquisition operations.
Wireline fluid sampling tool became a stock in the well or was not recover.
And open hole sidetrack.
He is going to begin shortly from below take last casing point to the planned TV.
The joint venture expects to complete wave one operations within the original four five months timeframe as announced on January 20, <unk> of this year.
The JV has updated its well total cost estimates to $170 million to $190 million to successfully reach the target total debt and complete its drilling program.
The increasing costs includes the delays associated with the late arrival of the break.
Costs associated with fishing, a sidetrack operations.
As Gary mentioned in his opening remarks.
We remain committed to successfully and safely completing this potentially transformational opportunity.
I will now like to turn the call over to Ron Award goes from there as CFO .
Thank you Rhonda.
Thank you all for joining us today.
I'd like to take a moment to highlight a few key financial aspects of our first quarter results.
Operating EBITDA was approximately $92 million in the first quarter.
This compares with $145 million in the prior quarter.
The decrease in quarter over quarter operating EBITDA was primarily a result of lower commodity prices and lower sales volume.
As of March 31, the company had a total inventory balance of $1 6 million barrels an increase of <unk> 4 million barrel compare to December 31.
The company actively manage it as volume ending the quarter with more than 370000 barrels of increased inventory as compared to the prior quarter.
Which was subsequently sold in the second quarter of 2023.
During the quarter the company invested approximately $132 million in capital expenditures, including $75 million in Capex related to Louisiana, $3 5 million in debt service payments and just over $4 million in share buybacks.
In addition, the company obtained net proceeds from the loan facility of $115 million, which were used to fully repay the peripheral wire legacy debt.
We had higher working capital in the quarter.
Lastly, due to higher withholding tax payments, resulting from the updated tax legislation.
Payment of higher Capex activities executed during 2022, and the additional Colombia, Ecuador oil inventory that I just mentioned.
The company reported a total cash position of $183 million as of March 31, compared to $330 million as of December 31st close.
Turning to enhancing shareholder returns.
As part of our 2023 plan, we continue pushing forward with our effort to unlock shareholder value from our upstream, Colombia, and Ecuador business, our standalone and growing midstream business.
In a potentially transformational offshore exploration program in Guyana.
As Gavin mentioned during the quarter, we successfully refinanced, but at OIS legacy project finance debt.
This new financing extends the borrowing tenor by three years on a weighted basis.
Importantly, this credit agreement also includes additional flexibility, including an accordion feature for up to $30 million, which may be drawn by port delay here.
Fund additional investment opportunities, including potential liquid and dry terminal expansion project.
This financing was tailored to meet the business growth plans.
Furthermore, and consistent with our strategy the new loan is.
Supported exclusively by the cash flows from our midstream business.
This financing is nonrecourse to <unk>.
Subsequent to the quarter for interim analysis has designated from data energy Boudjenah holding limited.
And from data Entergy, Louisiana Corporation as unrestricted subsidiaries in accordance with the terms and conditions of the indenture.
As a result of this destination at an unrestricted subsidiary Frontera energy within our corporation automatically ceased to be inorganic tour pursuant to section seven top b of the indenture.
In accordance with the indenture the company utilizes available restricted payment capacity to affect this destination.
I would highlight that since 2021 from data has generated in excess of 1 billion in consolidated net income as defined in the indenture the capacity.
The available under the restricted payments covenant was sufficient to undertake after the initial transaction.
With respect to different third agro Jenna transaction that I just highlighted the company utilized the most recent available information.
<unk>. The recent amendment transaction involving from <unk> completed in the third quarter of 2022 as well as the most recently available information to determine the fair market value as required.
As our chairman highlighted this definition is consistent with the company's priority and support the ongoing capital discipline of the business.
With respect to the company's NCB, we repurchase approximately.
500000 shares of the company's common shares for cancellation for approximately $4 2 million.
In total we repurchased $4 3 million common shares as part of our NCB program than just recently ended on March 16.
This number equates to roughly 89% of the program's shares available for repurchase.
And finally, we would like to thank our investors for the ongoing questions and interest in our company.
In response to these questions. We have included additional information this quarter additional further clarity with respect to important aspects of our businesses.
Within our revenue and operating cost disclosures, you will find additional details about our crude purchases and their subsequent sale.
These purchases are primarily linked to our dealer activity as we blend our own production to reach this higher quality for transport and export.
Second we have added additional disclosure information related to our midstream business.
This additional information is meant to provide a better understanding and visibility to our investors for this core business and.
That includes certain non <unk> measures such a proportional EBITDA measure.
A reconciliation of these non <unk> measures can be found in our MD&A.
I would like to now turn it back the call to Orlando.
Thank you Renee.
<unk> wrap up today's call I would like to take a moment to highlight some recent recognitions Frontera has received for its commitment to ESG.
On March 13, Frontera was recognized for a third straight year by Ethisphere.
A global leader in defining and advancing the standards of ethical business practices as one of their 2023 worlds most ethical companies.
In 2023, 135, honorees will recognize as spanning 19 countries and 48 industries.
From Antero was one of only two honorees in the oil and gas industry.
On January 31, Frontera was included in the 2023, Bloomberg gender equality index.
Modifying market capitalization weighted index developed to gauge the performance of public companies dedicated to report 14 gender related data.
This reference in this measures gender equality across five pillars.
Leadership and talent pipeline equal.
Equal pay and gender pay parity in.
Inclusive culture anti sexual harassment policies on external Brian .
Frontera was also recognized in the first quarter as a top 20 best place to work in Colombia by the Great place to work Institute and achieve ISO certification for its operations in a while or on each recognition for operations safety.
It was also recognized by friendly piece for our LGBT plus friendly workplace.
Looking ahead to the second quarter.
We expect expect improved profitability throughout the rest of the year.
As we advanced our development portfolio in Colombia on a quota.
We anticipate growth in our water handling infrastructure and facilities capacity in both <unk> and <unk>.
As we lay the foundation for the company's path to grow production to 50000 barrels per day.
We will leverage our advantaged transportation and logistic structure to maximize realized prices.
We will mature sell our self sustaining and growing midstream business.
And we will complete operations at the way one well in Guyana.
With that I would like to conclude by saying, Thank you to our rail and on air for the comments and thank you for everyone for attending our call I will now turn the call back to our operator, who will open the call for questions.
Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the one on your touch telephone Youll hear three Tom prompt acknowledging your request and your question is will be pulled in the order. They are received should you wish to decline from the polling process. Please press star followed by the Q.
You are using a speaker phone please lift the handset before pressing any keys one moment. Please for your first question.
Your first question comes from.
Arianna Commvault with Lance. Please go ahead.
Hi, Thanks for taking my question looking Santana called with Darren.
My first I had a couple of questions.
And then go one by one that would be green.
Starting maybe with the revised cost.
One.
Just to understand.
Main catalysts NBC for cash generation and how would you expect.
Additional costs and your remaining capex through the year.
Do you remain on <unk> being fully funded with internal cash generation.
So hi, Adena and good morning as always thank you for participating I think you had more than one question within that question. So maybe we can break it down a little bit more.
In our MD&A you will find the recent breakdown an updated breakdown.
Related to the our updated Capex views I think what this translates to roughly $10 million to $20 million in expenditures from what we have previously guided the market to.
And I think I would I would point to what Orlando said that we are committed to finishing successfully and also finishing safely the drilling of the <unk> well.
Okay.
I'll throw it back to you to see if there's any particular more detailed question do you want me to answer.
Yes, just thinking the cash generation and data pool Capex program for the year, how do you see that the cash burn.
First quarter.
How long until you have remaining in the outline how big and coupon.
Catherine.
Program for the year.
Got it I think that we've highlighted to the market that we have.
<unk>.
Our capex expectation call. It I think it's $400 million to $475 million depending on.
Our range is what I would like to highlight there is that.
You talk about because youre talking about two different things right funding <unk>.
We are only one part of the JV Association to forego agenda. So we believe that we have sufficient capital to fund.
The required amount of fulfilled the needs related to the wealth as it relates to our program.
The.
I think our guidance is that we will be able to fund the expectations of our guidance as we presented to the market.
I'm, a little bit sorry, I can answer that question back Jim a little bit confused by your question.
I think the bottom line here.
Is that we I mean.
And as I said earlier, we remain committed to complete.
Well.
And that is within our our capex guidance yet.
I understand maybe just one final one has to do with the wider differentials that you've seen a class quick Colombian crude oil.
So understanding you can share some views on what are you seeing that is driving this.
Your expectations for the remainder of the year.
Up.
So I would say its two things what we can highlight is that wider differentials in the first quarter. I think we have seen an easing of that I think we are seeing improved terms now.
And I would I will highlight the real reason driving that is the.
<unk>.
The market that we live in today, I think that the Russia conflict.
The different things that are happening globally are really driving a lot of volatility in these markets I mean, you've seen the recent price action related to oil today.
Despite what we believe to be a very title market and this is the type of volatility is driving a lot of Av Av although differences but to clarify.
I think that we're now seeing a.
Differentials have come down we see an improved environment during the second quarter and the second quarter.
Alright, Thank you very much.
Thank you.
Your next question comes from Roman.
Rossi with Canaccord Genuity. Please go ahead.
Good morning, guys. Thanks for taking my question so a.
A follow up or not your last question regarding <unk>.
Looking at Tcf financial statements.
Hardly enough cash to fund their share right.
Two.
Any comments from you.
Our capital is around providing multi now seeing.
Alrighty excellent.
Support for <unk>.
So Ross. Thank you for the question I mean, we cannot frontera cannot.
Comment on CTX plans as we as we said I mean.
The JV remains committed to complete the work, but it's difficult for us to make any comment on oce excellence.
Okay. Thank you.
Sure.
Quick question regarding the crude akshay.
Even though the disclosures have better.
One.
Sure.
How should we think about Cooper.
Is there a way to project.
And look I think it's a good thing the U S that so the all of these group purchases are volume driven and all we're trying to do I think as I said in my remarks. This is the crude that we acquire so that we can get our.
There were mostly heavier oil company, we can take crude get it to the desire spec transported and export it to let US work with you and Brent and the team and we can give you guys a little more clarity on the numbers are represented in our displays.
First of all what I would offer to just take it offline and then we can help you kind of guide you with that.
Okay awesome. Thank you very much Craig yes, absolutely.
Your next question comes from Anne Milne with Bank of America. Please go ahead.
Good morning, Thank you very much for the call.
I would like to thank you for the increased disclosure, which I noticed as I was going through your press release.
That is very helpful.
I have a.
Two questions one I am just wondering right now how you are thinking with what you are seeing in the Colombian market about the future prospects for that part of <unk>.
The two terminals that you have there.
And what types of gross rates I guess, you could say.
Second question is on your water handling at Keith I think you said, it's at $1 5 million barrels a day.
And I just wanted to confirm will this be growing this year and how much will it be growing by.
Third question, sorry is on taxes.
I know you mentioned that was one of the reasons for the increase in working capital, but I also see that income taxes paid increased.
Is all of the increase both in the taxes paid in working capital related to taxes due to the new taxation that's coming in.
And then I guess a final very very general question is.
<unk> first full quarter under the new government.
Albert.
Are you looking at or what are you watching for in terms of new or additional decisions that might be made with respect to the oil sector.
Nothing has been met.
So far I know theres been some blockades that that's not really directly.
Just wondering if there's anything you're watching out for particularly after the cabinet changes. Thank you.
Why don't you take the portfolio and attach.
And I can tell you.
Yes, yes.
One.
So on the and a lot of questions. So please remind us.
Yes.
The paper at a hospital people with me if I didn't take note, but I'm going to try for memory and I think at <unk>. This morning, So I think of it.
Yes, so on the Port OIS.
I think this is a port that was built in 2015 that we believe that has significant room to grow.
Both on the liquid side and also on the.
On the dry port side, as we think about volumes getting better today that port has.
Significant volume capacity to transport additional liquid.
So capturing that flow additional liquids into Colombia will be critical for us to continue to grow that today I think we're roughly at.
Close to 70000 barrels a day of managed liquids and this is up already from a number that was a couple of years ago, probably closer to the <unk>. So our focus now is to continue to increase that.
And good I imagine that a port is also all about throughput because we earn money by actually flowing more oil through it not just in the slide holding or storing the oil through their part. So that's one side and we are looking at several strategic projects that can improve on that.
The other side today, we have a really good business on the on the rubber side I think we are the number one market share.
In the country relate to this roll on roll off cargo.
But I think that that is one aspect of their business that remains to be underutilized.
We have several hectares of expansion capability for the port for us to kind of target.
We're looking at potential expansion into the containerboard business and all of these together better use of our existing land.
Better use of our capabilities to have stacking cap of capabilities related to management more cargo should be key drivers of a potential.
And in particular drivers for additional.
Profitability over a port OIS.
That answer at least your question and maybe one thing that we can do and we can walk you through in a presentation of the port and cannot highlight and pinpoint in particular detail, where we see that expansion how much capacity in volumes, because we certainly have that prepared and we'll gladly share that with you.
Okay, Yeah, Doug just as soon as anything that you think will be in <unk>.
Sorry.
Important growth there that's awesome.
Three other one later on.
Yes, it's a 2023 I think it's more organic growth I think some of the strategic projects.
We hope that we will be able to tap in 2023 were focused on tapping those.
But right now I think most of the growth Youll see us from continue to capture more market share from existing players continue to realign our ports. So we can capture more cargo and also more liquids liquids flows.
Okay perfect. Thank you Renee.
And then on the taxes I would say two things.
And let me just make sure that I got the right number so the.
On the debt withholding tax number is there was a recent regulation that inquiries withholding taxes.
By an additional 5% to youre seeing basically that incremental amount.
That's where you see the value of our.
Certain tax assets increasing.
This is effectively the side effect of the recent regulations, where you have the.
The government.
Increasing the total take by the non deductibility of royalties and also the third tax so I guess to answer your question our guidance related to taxes to be paid at the end of the year remains to be the same because our taxes payable. However, now we are being withheld a higher amount that we would expect to get basically get returned by the end of the year because.
Overall retention.
Okay got it thank you.
And on the on the <unk>.
On the on the on the project on the water handling.
The capacity increase that we are currently as we speak working on.
At CPC acts on it Keith.
Yes, certainly.
<unk> will be to increase that capacity.
For CPC.
The project that we have is to double the water handling capacity of the of the field, which is playing in 120000 barrels of oil per day.
So we are expecting to double that.
By the end of the year.
<unk> goes into any stages.
But we are on track with that with that project.
And with <unk> as I mentioned the pilot for this add a facility.
Which was a facility that was <unk>.
<unk>.
Six a year ago.
We are commissioning that facility as we speak the pilot has been very successful we have treated already $1 4 million.
Bottles of water. So we are on track. We are also on track with the plan to increase capacity in that in that in that in that facility.
I think your question about the if I if I understood correctly is about the plans in Colombia going forward with the reshuffling. The covenant is a good question.
Yes on any other actions by the government or what you're watching out for that would maybe change your strategy.
Yes, no we I mean, we remain.
We remain committed to our operational team in Colombia.
We are aware that proteins Petro has a narrative.
Would you say.
And the oil to put it to put it that way, but the new minister of finance in the in the first statement that he he.
He made to <unk>.
<unk> media in Colombia. He is he is fully supportive of the oil and gas industries fully aware of the importance of the oil and gas industry for the Colombian economy.
Tim.
Social user statements are very comfortable.
For us to continue with the with our operations in the country.
Thank you.
And so my top notch team give me some more details and then I know that you love details on the taxes. So I will clarify couple of things.
So we went from 6% to $36 $7 million payment related to withholding taxes in it is timing driven on ODM and the Odell pipelines.
So then the remember we for prior to this year, we also only own 60% of that another remaining 40%. So you see an increase there.
Because we consolidate the investment so we paid the taxes on the dividend.
The other one I would say, we have a $15 $6 million payment.
Related to and this is the increased taxes that I was telling you about versus last year. I think is 16 to hear you're already seeing that number being a little higher and there is one correction of $13 million there.
That we were is a settlement that we did to catch up with some taxes that were owed.
As of 2022, so I will take 13 of that 36% at one time and the other stuff is more one <unk> four and the other one is the increased number driven by their retention.
Okay. That's very helpful. Thank you.
Yes.
Your next question comes from Christine Guerrero with brick House ventures. Please go ahead.
Yeah, great quarter guys.
Wonderful to hear the.
Well progressing.
Being a complicated well most of my questions are regarding Guyana, and the well results.
And then I have a housekeeping question at the end.
So to start out.
A pleasant surprise finding oil in the Mr Kian and the campaign.
Does that seem to align way the way results more with the stabroek block more so than the Suriname block 58.
Also you announced the API for the Mr. Kim, but there was a lack of clarity around the companion.
I wanted to know why.
Why that.
And since there was no information provided on the <unk>.
Net paid across the D or the prospect size and the Mr. Kian and the campaigning and targets I was hoping you could provide some more clarity around that.
Victor do you want to take that question Victor.
Sure Hello, Kristine how are you doing.
I'm doing great. So long as we're drilling I'm doing great.
Great. Thank you everyone.
First as most of you I would like to say is.
Is that so far we are pretty happy with the results that we have seen.
Geologic and geophysical malls are going to be.
Quite accurate.
We are very encouraged with the results of the well.
Also pointed out we have also already have one.
More data than that we didn't go so well.
And with one.
Of the of your question.
With me.
One is basically with regards to your question about it.
The only thing there is a futility the convenient more like visa on block 58, basically the point is is that we are.
Analyzing the data we released one of the <unk>.
Information that we have so far.
As we get the <unk>.
<unk> yield and whether we are able to analyze the data we will make some more.
We'll release more information alone.
But.
We are encouraged.
We are going to annualize the informations are integrated in terms of your less use of all the API or the he leaves behind an accretive or not.
In the press release, basically we were able to collect this outflows even industry chemicals with Rosen.
Q2 was actually when we were in the lower prices.
The reason why we did not increase any.
We lose any information now around the profit side.
I will also reiterate though we made all the information from the well so we are waiting to get.
Brendan.
Pieces of the puzzle right, including the one that information.
Well of course, we hope to also be able to get.
Possibly we'll do not integration to allow us to be able to get a better picture.
So far.
Okay. So just to clarify does that mean that you didn't get any of the fluid samples.
And the campaign in or the same Tony and before the tool got stuck.
We were able to lift this improvement the tool was low this quarter. So we have the.
Income ratio improvement.
From the from the samples that we feel this is why we did not yes basically.
Okay.
Information from the Wellbore over on the tool itself.
So service gives us ample meet with us.
Diverse stock.
Okay, Yeah, perfect that answers my question. So also so far on your drilling how closely is way one aligning to your pre drill seismic modeling are the sand packages coming in larger smaller I mean can you give.
Some some color around that.
Yes, basically what I can tell you is what I was.
Brian before right.
We are pretty close and again, we are not losing yes.
Utilization of our Big news.
Subsequently, we will lose one single release.
We've integrated the data we are able to political volatility procure for everybody, but basically the plan. So far we have seen what we have in the plan in terms of the service model.
Okay. So so at the end how long will it take to complete the perspective resource update.
Yeah, well, we certainly first of all we don't wanted to flip over four to five months to go.
Are you able to win on just all of that and then after that.
We will have to wait to see how much data, we're going to be able to collect on how long that's what it would take another so I think we will have to wait until we have the data and we understand how long is even if they weren't as locomotive DVT analyses as well.
So we will have to assess that.
Understood.
Of course.
Okay.
So also considering that way one is kind of remaining within the original timeline of four to five months. It seems like the cost has increased significantly what's the primary cause of that Netscape calculation. I mean is it that there were some inflationary clauses in the rig contract or some other hidden factor because it.
Seems to be more than just the stock logging tool.
Actually.
Let me just clarify let me just clarify there the real issue here was the delay.
The delay, but we're ready we're ready by September to start drilling we had everything lined up.
Adding support.
We are paying feel we're paying a lot of support equipment waiting for the drill to come. So we're seeing that roughly $20 million of that increase is delayed driven 100%.
So the if you were to adjust that back this well, including the additional cost that we're under.
We're going through right now as disclosed in the release for the additional activity would actually be under power, but yes. The overall capex is bigger because of the delay in receiving.
That sounds harvest of all that the North Dakota rig.
The Maersk discoverer.
Okay. So thats like a lot of standby charges and things like that.
Basic and fuel and these things just tend to add up we were at the ready as we told the government and we told every investor by September and drilled in and start drilling until January .
Okay. Okay. Yeah. Thank you that makes sense, because the well cost in this alignment like I said it just wasn't factoring to me, but if there is like you said that there is a bunch of standby charges.
Because of the rig mobilization, then definitely clears that up.
And then little more.
But it's what it is.
Yeah, Yeah, it's part of working in a remote region.
And.
Until the barbies deepwater port and schedule I mean, I know there's like limited.
<unk> support in the area and you're transferring back and forth for Trinidad so.
Yeah, the Berbice court being open which I don't.
If you can comment on that like when.
Witness the Jackson Berbice court, considering that you are the largest shareholder and also on the board.
<unk> energy like when is that expected to open we.
We will defer that question to <unk>.
Okay. So here's one that you may or may not answer as well. So earlier. This year. It was reported by a third party that Frontera has received multiple offers for our corporate buyout and at least one offer for the Guyana App asset have you received any further offer since your last report and are there currently any <unk>.
Negotiations ongoing.
Okay.
No.
A matter of company policy, we don't I mean, we don't we don't comment on.
Or market speculation.
Rumours null.
Hum.
Having said that we we are always looking for M&A opportunities to enhance the value for all of our stakeholders.
We would consider M&A opportunities if it made sense to do so.
Hey, Joseph.
Example, as an example, it remember we increased our indirect interest in the <unk> pipeline in September of last year.
We increased our working interest in the current time block.
Last year as well.
We acquire is the <unk> better suit company in Colombia.
By the end of 2021, so so Barry Barry Logan accuracy into into M&A opportunities opportunities that again may make sense for our stakeholders.
Yes, that's fair. Thank you so much for taking my question.
Thank you Christine.
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Your next question comes from Louie Serono with Goldman. Please go ahead.
Hi, guys. Thank you for the call just a very quick one from my end can you comment on what the remaining capacity under your RP basket is.
After the change in the indenture that you just did.
Alright.
There was no change in the indenture you mean the designation.
So designation, yes so.
Just what's your RP Youre current RP capacity.
Look I think to get back to you on that but what I can tell you and I think I mentioned in my notes the company generated over $1 billion of consolidated net income since 2021 was at the date on the.
On the.
Yes.
On the indenture. In addition to that you have we paid roughly.
Last year, we did.
Our $92 million in Suvs savvy tenants have you sort of $92 million. This year before we acquired shares for our $40 million.
And like I think.
This transaction, even with this transaction, we still have capacity.
Under the restricted payments basket.
So I think that that's I think the information that we're going to disclose at this point in time.
Okay understood. Thank you.
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