Q4 2024 Frontera Energy Corp Earnings Call
Yeah.
Good morning.
Ina: My name is Ina, and I'll be your conference facilitator today.
Ms Ina and I'll be your conference facilitator today.
Operator: Welcome to Frontera Energy's fourth quarter in year-end 2024 Operating and Financial Results conference call. All lines are currently on mute to prevent any background noise. I would like to remind you that this conference call is being recorded today and is also available through audio webcasts on the company's website.
Welcome to Fonterra Energy's fourth quarter and year end 2020 for operating and financial results Conference call.
Speaker Change: All lines have Cynthia on mute to prevent any background noise I would like to remind you that this conference call is being recorded today and he's also will be able to audio webcast on the company's website.
Operator: Following the speaker's remarks, there will be time for questions. Analysts and investors are reminded that any additional questions can be directed to Frontera follow today's call at IR at Frontera Energy.
Speaker Change: Following the speakers remarks, there will be time for questions analysts and investors are reminded that any additional questions can be directed different tariff follow today's call and I, our adventure and a G U D C E.
Speaker Change: This call contains forward looking information within the meaning of applicable Canadian securities laws relating to activities events or developments the company believes or expects will or may occur in the Fisher.
Operator: This call contains forward-looking information within the meaning of applicable Canadian securities laws relating to activities, events or developments the company believes or expects will or may occur in the future. Forward-looking information reflects the current expectations, assumptions, and beliefs of the company based on information currently available to it. Although the company believes the assumptions are reasonable, forward-looking information is not a guarantee of future performance. Forward-looking information is 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 information.
Speaker Change: Forward looking information reflects the current expectations assumptions and beliefs of the company based on information Vicki amenable to it.
Speaker Change: Although the company believes the assumptions are reasonable forward looking information is not a guarantee of future performance.
Speaker Change: Forward looking information is subject to a number of risks and uncertainties that may cause actual results of the company to differ materially from those discussed in the forward looking information of.
Operator: The company's MD&A for the quarter ended December 31, 2024, and the company's annual information form dated March 10, 2024, and other documents it files from time to time with securities regulatory authorities describe the risks and uncertainties, material assumptions, and other factors that could influence actual results. Any forward-looking information speak only as of the date on which it is made. and the company disclaims any intent or obligation to update any forward-looking information, except as required by law.
Speaker Change: The company's MD&A for the quarter ended December to 1024, and the company's annual information form they'd had much time to die So Glenn before and other documents. It falls from time to time with Securities regulatory authority used to describe the risks and uncertainties, but do you have assumptions and other factors that could influence.
Speaker Change: Actual results.
Speaker Change: Any forward looking information and speak only as of the date on which it is made.
Speaker Change: And the company disclaims any intent or obligation to update any forward looking information, except as required by law.
Gabriel de Alba: I would now like to turn the call over to Mr. Gabriel De Alba, Chairman of the Board of Frontera Energy. Mr. De Alba? Thank you, operator.
Speaker Change: I would now like to turn the call over to Mr. Gabriel The Alba Chairman of the board of friends or energy Mr. Alba.
Speaker Change: Thank you operator, good morning, everyone and welcome to from Terrace fourth quarter, 'twenty, 'twenty, four and year end operating and financial results Conference call.
Gabriel de Alba: Good morning, everyone, and welcome to Frontera's fourth quarter, 2024, and year-end operating and financial results conference call.
Gabriel de Alba: Joining me on today's call are Orlando Cabrales, Frontera's CEO, Rene Burgos-Diaz, Frontera's CFO, and also available to answer questions at the end of the call, we have Victor Vega, VP, Field Development, Reservoir Management and Exploration, Alejandra Bonilla, General Counsel, Iván Arevalo, VP, Operations, and Renata Campañero, VP, Marketing Logistics and Business Sustainability. Thanks again for joining us. In 2024, Frontera continues to demonstrate robust performance, focus on the execution of its strategic objectives and priorities. The company met its guidance targets, including key upstream operating and financial objectives. and delivered on its commitment to return capital to shareholders.
Orlando Cabelas: Joining me on today's call are Orlando Cabelas Frontera CEO.
Speaker Change: Yes, but the CFO.
Speaker Change: I'd also available to answer your questions at the end of the Cold we have Victor Vega VP field development reservoir management and exploration at least.
Speaker Change: Ended up when you get general counsel.
Speaker Change: VP operations.
Speaker Change: Nothing about Euro V P marketing logistics and business sustainability, Thanks again for joining us.
Speaker Change: In 'twenty 'twenty four from today continue to demonstrate robust performance.
Speaker Change: On the execution or the strategic objectives and priorities.
Speaker Change: The company met its guidance targets, including key operating and financial objectives.
Speaker Change: And delivered on its commitment to return capital to shareholders.
Speaker Change: The value center approach resulted in closing the year with a strong balance sheet, including 223 million cash position.
Gabriel de Alba: The value-centered approach resulted in closing the year with a strong balance sheet, including $223 million cash positions. Company also lowered its consolidated debt and lease liabilities by over $30 million. During the year, both S&P and Fitch reaffirmed the company's credit ratings of B plus and B, respectively, with a stable outlook, highlighting Frontera's strong credit quality and financial position. underpinning the company's low leverage. For the full year, the infrastructure business segment delivered strong results, generating a 2024 Adjusted Infrastructure EBITDA of over $107 million at the midpoint of the company's 2024 guidance target. The company also received over $60 million in dividends and capital distributions from ODL.
Speaker Change: The company also lowered consolidated debt and lease liabilities by over $30 million.
During the year, both S&P and Fitch reaffirmed the company's credit ratings, so peoples and b, respectively with a stable outlook highlight.
Highlighting frontier are strong credit quality and financial position.
Speaker Change: Underpinning the company's low leverage.
Speaker Change: For the full year the infrastructure business segment delivered strong results generating a 2024 adjusted infrastructure EBITDA of over a $107 million at the midpoint of the company's 2034 guidance target.
Speaker Change: The company also received over 60 million in dividends and capital distributions from OBL.
Speaker Change: For direct continues to make significant progress in its worth about yelp ratios, reaching several key important milestones, which we expect shall provide shareholders with significant upside potential in.
Gabriel de Alba: Frontera continues to make significant progress in its Puerto Valle operations, reaching several key important milestones, which we expect shall provide shareholders with significant upside potential, including the construction of the connection line with the Refinería de Cartagena, which is expected to be operational by the second quarter of 2025. Additionally, the company announced the new LPG joint venture with Industrias Gasco. Both these projects are strategic for Frontera, but also supportive regionally and for the Colombian economy as a whole.
Speaker Change: Including the construction of the connection line with their affinity yeah, they've got the Hana, which is expected to be operational by the second quarter of 2025.
Speaker Change: Additionally, the company announced the new L P joint venture.
Speaker Change: We didn't do scarce gas cool pool.
All these projects are strategic for frontier, but also supporting regionally and for the Colombian economy as a whole.
Speaker Change: As mentioned.
Gabriel de Alba: As mentioned, during the December operational update, the Infrastructure Business Strategic Review is in its final stages. The company is analyzing various options and expects to announce results soon. In the Guyana exploration business, Frontera and its joint venture partner remain firmly of the belief that its interest in and the license of the quarantine block remain in place and in good standing. The Jury Venture is assessing all legal options available to assert this right. The Joint Venture is committed to properly resolving this matter and continuing its multi-year efforts and investments to realize value for the people of Guyana and its shareholders from the quarantine block.
Speaker Change: The December operational update the infrastructure business strategic review is in its final stages.
Speaker Change: The company's analyzing various options and expects to announce results soon.
Speaker Change: And to Guyana exploration business Frontera, and its joint venture partner remain firmly of the belief that its interests in <unk> and the license at the current time block remain in place and in good standing.
Speaker Change: The joint venture is assessing all legal options available to us air Twos right.
Speaker Change: The joint venture is committed to probably resolving this matter and continuing its multiyear airports and investments to realize value for the people of Guyana and its shareholders from the quarantine block.
Speaker Change: So are there to deliver on its commitment to return capital to shareholders.
Gabriel de Alba: Frontera delivered on its commitment to return capital to shareholders. Supported by Frontera's strong financial position, from 2024 to today, we have returned approximately $83 million, including $15.1 million in declared dividends. 7.8 through the repurchase of its common shares through NCIB and completing two successful substantial issuer bids for over $60 million. The SIV saw an over 90% combined participation rate, validating the company's capital distribution strategy. Since 2022, the company has returned over $180 million to its shareholders through normal course issuer bids. Substantial Issue Bids and Dividends. Frontera will continue to consider future investor initiatives in 2025, including potential additional dividends, distributions, or bond buybacks.
Speaker Change: Supported by front there is a strong financial position from 324 through today, we have returned approximately 83 million, including $15 1 million and declared dividends.
Speaker Change: Kevin eight through the repurchase of its common shares with M. P E B and completing two successful substantial issuer bids what over $60 million.
<unk> saw an over 90% combined participation rate.
Speaker Change: The company's capital distribution strategy.
Speaker Change: Since 2022, the company has returned over a 180 million to its shareholders through normal course issuer bids.
Speaker Change: Alicia rebates and dividends.
Speaker Change: Frontera will continue to go see their future investor initiatives in 2025, including potential additional dividend distributions or bond buybacks based on old prices, they've all results of our business.
Gabriel de Alba: based on all prices, the world results of our business, cash flow generation, and the delivery of the strategic goal.
Speaker Change: For generation.
Speaker Change: And the delivery of the strategic goals.
Orlando Cabrales: I'd now like to turn the call over to Orlando Cabrales, Frontera's CEO, and Rene Burgos, Frontera's CFO, who will share their views on our four-quarter and full-year results. Orlando? Thank you, Gabriel. Good morning, everyone, and thank you for joining us for today's call. 2024 was a strong financial and operational year for Frontera. We have continued to execute our strategy and generated positive results. meeting all our guidance metrics for the year. and deliver additional value to shareholders. In our Colombian upstream business, we met our 2024 production target. After completing successful drilling campaigns in CP6 and Sabanero blocks, Expanding water handling capacity to 360,000 barrels in CP6 block, which reached another record daily production level of close to 9,000 DOE per day in the four quarters.
Speaker Change: I'd now like to turn the call over to Orlando Cabela's from <unk> CEO and ran at Burgas frontier, our CFO will share their views on our fourth quarter and full year results for leather.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Thank you Rod and good morning, everyone and thank you for joining us for today's call.
Speaker Change: 324 walk us through our financial and operational year for final data.
Speaker Change: We have continued to execute our strategy and generated positive results.
Speaker Change: Meeting all our guidance metrics for the year.
Speaker Change: And deliver additional value to shareholders.
Speaker Change: In our Colombian I've seen business, we've met our 324 production target.
Speaker Change: After completing successful drilling campaigns and CPC until I mean it'll blocks.
Speaker Change: Expanding water handling capacity to 360000 barrels in CPC block.
Speaker Change: Which reached another record daily production level of close to 9000 Boe's per day in the fourth quarter.
Orlando Cabrales: and Sabanero were production-rich, approximately 2,400 DOE per day during the same period. At our Sahara project, water processing volumes reach an average of 79,000 barrels of water per day in the fourth quarter and an average for the year of 44,000 barrels of water per day. Frontera continues to optimize its operations in an effort to drive higher water handling and crude oil production volumes, and also as a tool to achieve our sustainability and green circular economy goals. I'm also pleased with our continued efforts to manage our cost structure. Despite inflation and other pressures, we met all our cost-guided targets, including the production cost per barrel, which averaged $9.34 per barrel.
Speaker Change: I mean, how long it'll where production reached approximately 2400 Boe per day during the same period.
Speaker Change: Our it's hard to project.
Speaker Change: Water processing volumes reach an average of 79000 barrels of water per day in the fourth quarter.
Speaker Change: No not a rush for the year of 44000 barrels of water per day.
Speaker Change: Competitor continues to optimize its side operations.
Speaker Change: Effort to drive higher water handling and crude oil production volumes and also as a tool to achieve our sustainability and green cyclical like when illegals.
Speaker Change: I'm also pleased with our continued efforts to manage our cost structure.
Speaker Change: Despite inflation on oil prices.
Speaker Change: All our cost guidance.
Speaker Change: Targets, including the production cost per barrel, which already nine point 34, golar or borrow.
Speaker Change: When our 'twenty 'twenty four year and reserves.
Orlando Cabrales: on our 2024 year and reserve. We continue our commitment to sustain production and focus on value over volume in Colombia and Ecuador. Closing the year with 100.6 million and 151.3 million barrels of 1P and 2P reserves respectively. Our three-year average gross reserves replacement ratio of 60% for 1P reserves and 40% for 2P reserves. and presented a reserve life index of 6.8 years for 1P reserves and 10.3 years for 2P The net present value before tax, discounted at 10%. our NPV 10 for December 31st, 2024 of our 2P reserve. was $3.4 billion or $21.6 billion per BOE.
Speaker Change: We continue our commitment to sustaining production and focus on value over volume in Colombia and Ecuador.
Speaker Change: Closing the year with 146 million.
Speaker Change: 151.3 medium barrels lumpy and two P reserves respectively.
Speaker Change: Our three year average gross reserves replacement ratio of <unk>.
Speaker Change: 60% for one P reserves.
Speaker Change: 40% for two P reserves and.
Speaker Change: <unk> presented a reserve life index.
Speaker Change: Six eight years or lumpy reserves.
Speaker Change: And boy and three deals for <unk> reserves.
Speaker Change: The net present value before tax discounted at 10%.
Speaker Change: Our NPV pen for December 31, 2024 of our <unk> reserves.
Speaker Change: <unk> 3.4 billion or 21.6 per Boe.
Orlando Cabrales: The NPV-10 presented a small decrease, mainly due to the reserves decrease. However, the NPV-10 per barrel increased year over year. driven by operational efficiencies, optimization of development plans, and the reduction of future development costs. for 2025.
Speaker Change: The PV 10 presented a small decrease mainly due to the reserves degrees.
Speaker Change: Over the NPV 10 per barrel increased year over year.
Speaker Change: Driven by operational efficiencies.
Speaker Change: Initiation of the Rem development grants and the reduction of future development cost.
Speaker Change: So we're putting 25 we.
Orlando Cabrales: We will invest between $30 and $40 million in exploration opportunities. led by the drilling of our high-impact ERA-1 exploration well in the BIM-1 block. We generally postpone from our 2024 plan. We believe our new field exploration and exploration target will help unlock reserves growth potential. In our infrastructure business, ODL transported over 243,000 bars per day. generating $274 million in 2024 EBITDA and returning over $171 million to its shareholders. The company received over $60 million from its 35% interest in 2025. Puerto Bahía generated approximately $15 million in operating EBITDA for 2024 in line with our 2024 guidance.
Speaker Change: We will invest between 30 and $40 million in exploration opportunities.
Speaker Change: Led by the drilling of our high impact Ian I wanted exploration, well, India being one block.
Speaker Change: While we generally postpone from our 'twenty 'twenty four plan.
Speaker Change: We believe our near field exploration and exploration targets will help unlock reserves growth potential.
Speaker Change: In our infrastructure business ODM.
Speaker Change: ODM transported over 243000 barrels per day.
Speaker Change: Generating $274 million in 2020 for EBITDA.
Speaker Change: Turning over $171 million to its shareholders.
Speaker Change: The company received over $60 million from 35% interest in 'twenty 'twenty four.
Speaker Change: With the idea of them generated approximately $15 million in operating EBITDA.
Speaker Change: For 2024 in line with our critical any forward guidance.
Orlando Cabrales: Despite lower than expected liquids and cargo volumes and supported by effective cost controls in the operation. For 2025, our focus in Porto Alegria shifts to the connection, as we look forward to the start-up and ramp-up of volumes via the Reficar Connection.
Speaker Change: Despite lower than expected uniquely capable of volumes and supported by effective cost controls in the operation.
Speaker Change: For 2025, our focus impact on yeah. Okay.
It's clearly a connection.
Speaker Change: We look forward to the startup and ramp up of volumes.
Speaker Change: <unk> got a connection.
Speaker Change: Turning to our year to date pretty gaudy five performance gross production through March nine was approximately 40400 barrels per day.
Orlando Cabrales: Turning to our year-to-date 2025 performance, gross production through March 9 was approximately 40,400 pounds per day. Below our guidance range may lead you to certain unexpected wealth failures within our light and medium assets. These issues are being addressed. and we remain confident in meeting our 2025 production. On the exploration site, the Greta Norte 1 well was drilled, and the well is currently in the evaluation phase. We remain focused on executing our recently announced capital and production plan for 2025 and continuing to deliver sustainable production, solid operational and financial results, and enhancing investor returns.
Speaker Change: Below our guidance range, mainly due to <unk>.
Speaker Change: Certain unexpected Wilkes.
Speaker Change: Within our light and medium assets.
Speaker Change: This is these issues are being addressed.
Speaker Change: And we remain confident in meeting our 2025 production values.
Speaker Change: On the exploration side, the great one well was drilled.
Speaker Change: The well is currently in elevation phase.
Speaker Change: We remain focused on executing our recently announced capital and production plan for 2025.
Speaker Change: And continuing to deliver sustainable production.
Speaker Change: Solid operational and financial results and enhancing investor returns.
Rene Burgos: I would now like to turn the call over to Rene Burgos, Fronteras CFO. Thank you, Orlando, and good morning, everybody. I would like to take a moment to highlight a few key financial aspects of our four-year results. For the full year, the economy recorded a net loss of $24.2 million or $0.29 per share. The company's net loss includes roughly $117 million of operating income and $54 million from Sharpe Income Associates, our OEL investment. offset primarily by approximately $93 million in deferred income tax expenses and $74 million in financing. Our four income tax expense amounts reflect our use of historical tax-loss balances, impacts of changes associated with surtax rates, and fluctuations in the Colombian surtax rate.
Speaker Change: I would now like to turn Nicole over right now where it goes from.
Speaker Change: <unk> CFO.
Speaker Change: Thank you Bruno and good morning, everybody, let's take a moment to highlight a few key financial aspects of our full year results.
Speaker Change: For the full year the company recorded a net loss of $24 $2 million or 29 cents per share.
Speaker Change: The company's net loss includes roughly a $117 million of operating income.
Speaker Change: $64 million from shrink of associates.
Speaker Change: Bethany.
Speaker Change: I will set primarily by approximately 93 million in deferred income taxes patents and 70 per minute.
Speaker Change: Our deferred income tax expense amounts reflect argues historical tax loss balances impacts of changes associated with certain tax rate fluctuations in the Colombian peso FX rate.
Speaker Change: Our operating EBITDA for the year was approximately $424 million in line with you.
Rene Burgos: Our operating budget for the year was approximately $424 million, in line with the program. I want to take a moment to talk about our key per barrel indicators associated to our real life prices and costs. During the year, our weighted average brand sales price was $79.33. The company also witnessed an Everson's Coding Differential on expert sales of $5.51. Our Purchase Crew Net Margin associated to our Dilution and Transportation Programs was $2.73 higher than the $2.23 for the prior quarter. The quarter-over-quarter variance was the result of higher dilution needs driven by higher production for Burkina Faso.
Speaker Change: Got it.
Speaker Change: I want to take a moment to talk about our key per barrel indicators associated to our realized pricing and cost.
Speaker Change: Do you think you are weighted average sales price was $7 million.
Speaker Change: And 33 cents.
Speaker Change: But he also with it versus just putting a differential on export sales of $5.
Speaker Change: Our purchase of <unk> net margin associates, our division interpretation programs with $2.
Speaker Change: Higher than the $2 three tenths for the prior quarter.
Speaker Change: The quarter over quarter variance was the result of higher dilution, it's driven by higher production from our Haynesville assets.
Speaker Change: Taking a closer look into our operating costs of production energy and transportation cost per barrel for the year totaled $9 per day for <unk>.
Rene Burgos: To get a close look into our operating costs, our production, energy, and transportation costs per barrel for the year totaled $9.34, $5.11, and $11.33 in taxes. This is a comparison of $18.97, $4.99, and $11.91 respectively for Toy Story 3.
Speaker Change: $5 11.
Speaker Change: With respect.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Got it.
Speaker Change: $4.
Speaker Change: Okay.
Speaker Change: That's it.
Speaker Change: Great.
Rene Burgos: Thank you for your time. as well as the impact of effort rates and inflationary pressures on services and wages. Energy costs are also higher, mainly related to higher heavy crude oil production levels and higher electricity prices. Transportation costs had a slight increase as a result of annual increased tariffs partially offset by lower volumes transported per million attributed to improve domestic wall-hut sales. On our infrastructure business, adjusted infrastructure EBITDA for the year was $107 million. This compares to $110 million in 2023. The year-over-year decrease was primarily due to low EBITDA from ODL, which resulted from higher costs due to inflationary pressures and indexation on wages.
Speaker Change: Yeah.
Speaker Change: Got it.
Speaker Change: What sort of effect.
Speaker Change: As well as the impact of FX rates any pecheneg pictures of services.
Speaker Change: Energy costs were also higher mainly related to higher crude oil production levels and higher electricity prices.
Speaker Change: Transportation costs had a slight increase as a result of increased tariffs, partially offset by lower balances, but it primarily attributed to improved domestic water sales.
Speaker Change: On the infrastructure business adjusted EBITDA for the year was 170 $170 million.
Speaker Change: This compares to a $110 million in 2023, a year over year decrease was primarily due to lower EBITDA automobile, which resulted from higher costs due to inflationary pressures indexation on wages.
Speaker Change: Audio volume supported by 244000 barrels per day, consistent with 22 volumes.
Rene Burgos: Audio volumes exported were 244,000 barrels per day, consistent with 2023 volumes. Frontera cash generation for the year was very strong. Our cash flow from operations totaled $510 million. This is due to a healthy Brent oil price environment during the year, a reduction in domestic withholding tax rates, the impact of our deferred tax asset recovery, as well as dividends and capital distributions from our investment in the oil pipeline. As of December 31, 2024, the company closed with a $63 million income tax receivable, which we expect to recover during 2025. With respect to our capital expenditures, total capex for the year was among our guidance at $219 million.
Speaker Change: From their cash generation for the year was very strong our cash flows from operations totaled $510 million.
Speaker Change: Due to our healthy Brent oil price environment during the year a reduction in domestic withholding tax rates the impact of our deferred tax asset recovery as well as dividends and capital distributions from our investment in the pipeline.
Speaker Change: As of December 31st lien 24, the company closed a $63 million income tax receivable, which we expect to recover during 2035.
Speaker Change: With respect to our capital expenditures total capex for the year it wasn't what our guidance at $218 million or Capex for the year included the drilling of 68 wells in the Cooper TP six seven NATO and vehicle blocks, that's worth two exploration wells in Colombia.
Rene Burgos: Our capex for the year included the drilling of 68 development wells in the Kifa, CP6, Salva Neto, and Perico blocks, as well as two exploration wells in Colombia. As of December 31st, 2024, the company closed a year with a total cash position of $223 million, including $193 million of registered cash. This was before the January FIB of $30 million. In addition, through 2024, the company also reduced its consolidated balances by approximately $30 million.
Speaker Change: As of December 30, 121, 24, the company closed the year with a total cash position of $223 million, including $183 million of cash.
Speaker Change: Before did generate if it'd be.
Speaker Change: $30 million.
Speaker Change: In addition, 24 the company also reduced consolidated balances by approximately $39.
Speaker Change: Turning now to risk management, our credit risk management strategy continues to show how our hedging discipline supports our operations and planning onto our youth as derivative instruments dmitry exposure to oil prices and FX volatility.
Rene Burgos: Turning now to risk management, our current risk management strategy continues to show how our heavy discipline supports our operations and planning. Frontera uses derivative instruments to match exposure to oil prices and fix volatility. On the other side, the company entered into hedges, successfully securing a 40% hedging ratio until June 2025 at a $70 Brent strike price, protecting against a potential drop in loan prices. Frontera has also entered into foreign exchange rate hedges, totaling $180 million, covering roughly 40% of the company's expected peso exposure on the third quarter of 2025. These puts have strikes between the $4,150 pressure rate and $4,200 pressure rate.
Speaker Change: On the other side the company enter into hedges successfully securing a 40% hedging ratio until June 25.
Speaker Change: A $70 Brent strike price.
Speaker Change: Against a potential drop in home prices.
Speaker Change: Sometimes those are entered into foreign exchange rate hedges.
Speaker Change: $180 million covering roughly 40% of the company's expected peso exposure until the third quarter of 2025.
Speaker Change: This puts that strikes between the 4150 peso rate and 4200 that's right.
Speaker Change: Okay.
Rene Burgos: Both these hedges provide the company with cash flow disability and help mitigate impacts from future fluctuations while allowing the business to deliver on its 2025 target.
Speaker Change: <unk> said, you thought the company with cash flow visibility and help mitigate impacts of future fluctuations, while allowing the business to deliver on its 2025 targets.
Speaker Change: Finally, I'd like to provide an update on our investing value investor value initiatives.
Rene Burgos: Finally, I'd like to provide an update on our investor value initiative. On loan buybacks, the company reduced, we purchased $5 million notional of its 2028 senior unsecured notes in 2024. Here to date, in 2025, the company has repurchased an additional $1 million of its 2028 unsecured notes. Under the company's NCV program that expired on November 20th, 2024, the company repurchased approximately 1.3 million common shares for $7.8 million.
Speaker Change: And on buybacks become produced we purchased 5 million notional of its 2028 senior unsecured notes in place going forward.
Speaker Change: Do they do with any type of the company answer appreciate it and additional $1 million of its 2028 unsecured notes.
Speaker Change: Under the company's <unk> program that expired on November 20th traveling for the company repurchased approximately one 3 million common shares for $7 8 million.
Rene Burgos: As mentioned in our press release, the company intends to file with the CSX a notice of intention to commence a normal course A4 bid for its common shares. This program will be subject to the acceptance of the TSR. Respect to our quarterly dividends, which are declared unpaid, approximately $15.1 million during the year, for a total of $0.25 per share Canadian shareholders. Together with this results announcement, the board has declared a quarterly dividend of $0.0625 per share Canadian, payable to shareholders of record as of April 2, 2025, and to be paid on or around April 16, 2025.
Speaker Change: As mentioned in our press release, the company intends to file with the PSX. He notice of intention to get into a normal course, if forbid for its common shares.
Speaker Change: This program will be subject to the acceptance of it the effects.
Speaker Change: We expect our quarterly dividend declared and paid approximately $15 1 million during the year for a total of 25 per share Canadian for shareholders.
Speaker Change: Together with this results announcement the board has declared a quarterly dividend of $6 25 per share Canadian payable to shareholders of record as of April 2nd plan, and 25 and to be paid on or around April 16th 2025.
Speaker Change: Yeah.
Rene Burgos: Regarding the company's substantial issuer bids, or SABs, the company announced two SABs in 2024 for a total of over $60 million at a fixed price of $12 Canadian per share. The SIBs were widely participated, with an over 90% combined participation rate. The company believes this format is the most efficient means to distribute capital to all of our shareholders. In total, the company has returned over $83 million in capital to its shareholders since 2024.
Speaker Change: Regarding the company's substantial issuer bids or F N b.
The company announced U S. A D in.
In 2024 for a total of over $60 million at a fixed price of $12 Canadian per share.
Speaker Change: It means we're wildly participated we had over 90% combined participation rate.
Speaker Change: The company believes this format is the most efficient means to us.
Speaker Change: You put capital to all of our shareholders.
Speaker Change: In total the company has returned over $83 million of capital to shareholders.
Speaker Change: 24.
Rene Burgos: Frontera shall continue to consider future investor initiatives for 2025 and onwards, including potential additional dividends, distributions, or bond buybacks based on all prices, the overall results of our businesses, cash regeneration, and the company's strategic goals.
Speaker Change: So international continues to consider between Investor and you see it for 2025 and onwards.
Speaker Change: <unk> Patel traditional dividend distributions or bond buybacks based on oil prices.
Speaker Change: Overall results of our businesses gas for generation and the complex vehicles.
Orlando Cabrales: I would like to go back to Orlando.
Speaker Change: I would now I would like to call back toward them.
Renee: Thank you Renee.
Orlando Cabrales: Thank you, Rene. I wanted to provide some color to our 2025 production and capital program. We have a fully funded plan for 2025, delivering approximately $370 million to $415 million in consolidated operating EBITDA at $75. and Rem Price. Our plan will leverage. our transportation and logistics structure to maximize realized prices while also investing for future growth through facilities expansion and near-field and high-impact exploration. We expect to generate consolidated free cash flow of approximately $80 to $125 million at 75 average Brent price. Despite lower expected oil prices, Frontera projects a strong cash flow generation driven by higher production, lower capital expenditures, and a focus on cost control.
Renee: I wanted to provide some color to our 'twenty to 'twenty five production and capital program.
Renee: We have a fully funded plan for 2020 five.
Delivering approximately 370 million to $415 million in consolidated operating EBITDA at $75.
Renee: Grain prices.
Renee: Our plan will leverage.
Renee: Our transportation and logistics cost structure to maximize realized prices while.
Renee: We're also investing for future growth through facility expansion and near field and high impact exploration.
Renee: We expect to generate consolidated free cash flow of approximately $80 million to $125 million at 75.
Renee: Brent prices.
Renee: Despite lower expected oil prices Frontera project strong cash flow generation driven by hydro production.
Renee: Lower capital expenditures and a focus on cost control.
Renee: In our Colombian <unk> upstream business we.
Orlando Cabrales: In our Colombian and Ecuador upstream business, we are targeting production of approximately $41,000 to $43,000 BOE, a 4% increase compared to 2024 production, and generate $350 to $380 million in upstream operating revenue. We will invest between $160 to $190 million in development activities and $18 billion. in Development Spending from 2024. We will also invest between $30 million to $40 million in exploration activities and attend to $50 million. other investments related to HEC activities and new fuel production technology. We will focus our drilling effort. and the most productive and profitable assets in the portfolio. building on the successful heavy asset drilling campaign in 2024 in the KIFA and CP6 blocks.
Renee: We are targeting production of approximately 41200 43000 Boe.
Renee: A 4% increase compared to 24 production.
Renee: And generate Rihanna.
Renee: We have now $50 million to $380 million in upstream operating every day.
Renee: We will invest between $160 million to $190 million in development activities.
Renee: <unk> 18 decrease in development spending from 'twenty to 'twenty four.
Renee: We will also in days between 313.
Renee: $13 million to $40 million.
Renee: In exploration activities on our pan to $15 million.
Renee: All of the investments related to ATC activities.
Renee: New field production technologies.
Renee: We will focus our drilling efforts.
Renee: Most productive and profitable assets in the portfolio.
Renee: Building on the successful heavy assets drilling campaign in 'twenty 'twenty, four and the key facts on CPC blocks.
Orlando Cabrales: supplement our green activities with our low-cost well intervention program, partially offsetting our natural decline, as well as invest in development facilities, primarily supporting activities in the KIFA and CP6 block. On the exploration side, we anticipate investing $30 to $40 million drilling the high-impact IJERA-1 exploration well in the BEAM-1 block, the JANERA-1 well in the JANOS-99 block, and carry out pre-seismic and pre-drilling activities in the BEAM-46 block. We expect our upstream business to generate free cash flow between 65 to 95 million dollars. inclusive of $10 to $15 million in cash tax payments, net of recoveries, and debt service of $45 to $55 million, which includes $32 million of bond interest and $13 to $23 million related to debt service for local bank facilities.
Renee: So planning our drilling activities with our low cost well intervention program.
Renee: Partially offsetting our natural decline as well as invest in development and facilities.
Renee: Really support the activities in the Cooper and CPC ex Brooks.
Renee: Yeah.
Renee: On the exploration side, we anticipate investing $30 million to $40 million drilling the high impact either one exploration well in the B one block.
Renee: One well and began those 99 block on Carryout pre seismic I'm pretty drilling activities in the beam 46 block.
Renee: We expect our upstream business.
Renee: We generated free cash flow between $65 million to $95 million in.
Renee: Inclusive of $10 million to $15 million in cash tax payments net of recoveries.
Renee: Service of $45 million to $55 million, which includes 32 million of bond interest on.
Renee: $13 million to $23 million related to debt service for local bank facilities.
Renee: For our growing on a stand alone infrastructure business, we are targeting an infrastructure EBITDA of approximately $20 million to $35 million for 2025.
Orlando Cabrales: For our growing and stand-alone infrastructure business, we are targeting an infrastructure EBITDA of approximately $20 to $35 million for 2025. driven by the RefriCar Connection Startup and additional revenues from SAR. Including 50 to 60 million dollars in distribution from ODO, the segment is expected to generate free cash flow of approximately 15 to 30 million dollars. We have prepared a slide bridging our current production and the buildup of the components supporting our 2025 production target. Our starting point is the company's four-quarter 2024 average daily production rate of 42.4 thousand DOE per day. Assuming an asset decline rate of between 25% to 30% To sustain production, the company would need to replace an annual average.
Renee: Driven by record car connection or stockpile and additional revenues from side.
Renee: Okay.
Renee: Including $50 million to $60 million in distribution from audio segment is expected to generate free cash flow of approximately $15 million to $30 million.
Renee: We have prepared a slide bridging our current production and the build up of the <unk>.
Renee: Components supporting our 25 production targets.
Renee: Our starting point is the company's fourth quarter 2024 average daily production rate.
Renee: $42 4000 Boe per day.
Renee: Yes.
Renee: Assuming a massive decline rate of between 25% to 30%.
Renee: The sustained production the company would need to replace them.
Renee: And I'll address.
Orlando Cabrales: So 5.5 to 6.5 thousand DOE per day. or a rolling of 2% to 3% of production per month. Frontera's development capex program was designed to fully replace our declining barrels via a combination of new wells as well as low-cost decline management well intervention. New Technologies and Strategic Investments in Facilities. Our 2025 New Well CAPEX program seeks to replace between 3 to 4 thousand barrels, investing between $100 and $110 million in 60 to 65 new wells, focused primarily on our heavy oil assets. On average, each new well carries an estimated cost of approximately $1.5 to $2 million and targets an annualized production rate between 100 and 120 DOE per day.
Renee: So five five to six <unk> 5000 <unk>.
Renee: To date.
Renee: Or erosion.
Renee: 2% to 3% of production per month.
Renee: From data development Capex program was designed to fully replace our declining barrels.
Renee: A combination of new wells.
Renee: Alas low cost decline management well interventions.
Renee: New technologies and a strategic investment in facilities.
Renee: Our 2025, New World Conference program.
Renee: Seeks to replace between three to 4000 votes investing between 100 on one hand around $10 million.
Renee: In 60% to 65, new wells.
Renee: We focus primarily on our heavy oil assets.
Renee: On other ash, each new will carries on estimated cost.
Renee: Approximately $1.5 million to $2 million.
Renee: And targets on annualized production rate between 100, and 120 <unk> per day.
Orlando Cabrales: These worlds have an avarage... and Attractive. on the one-year payback period and a capital efficiency metrics of $16,000 to $18,000 per flowing barrel. Under our low-cost decline management well-intervention program, the company invests in well-intervention. and work orders to reduce the impact of the natural decline and optimize the portfolio production rate. For 2025, the company expects to invest approximately $20 to $30 million in decline management activities with average investment per intervention ranging between $200,000 and $500,000 per well and generating an additional $30 to $40 BOE per day of annual high production. Finally, we plan to invest $15 to $20 million in strategic projects, including at Sahara.
Renee: These wells have another rush.
Renee: And attractive.
Renee: On the one year payback period, and our capital efficiency metrics of 16 to $18000.
Renee: Hello in petroleum barrels.
Renee: Our low cost declining management willing to arrange on program.
Renee: Company invest in well interventions.
Renee: Workovers to review the impact of the natural decline and optimize the portfolio production rate.
Renee: For 2025, the company expects to invest approximately two.
Renee: I need to $30 million in decline management activities.
Renee: Average investment per intervention ranging between.
Renee: 200, and 500000 per well.
Renee: Generating an additional 30 to 40 Boe per day of annualized production.
Renee: Yeah.
Renee: Finally, we.
Renee: We plan to embrace <unk>.
Renee: <unk> two <unk> million in this part of your projects, including China.
Orlando Cabrales: Kahua Water Handling Expansion, along with between $5 and $15 million in investments in new technologies to enhance production efficiency and reduce water production. and build a foundation for further expansion of these key assets for years to come.
Renee: While water handling and expansion.
Renee: Along with between five and $15 million investment in new technologies.
Renee: Enhanced production efficiencies and reduce water production.
Renee: Build a foundation for further expansion of these key assets for years to come.
Orlando Cabrales: Overall, these capital projects will allow us to sustain production from last year at around 40,000 to 43,000 DOE per day.
Renee: Overall these capital projects.
Renee: Allow us to sustain production from last year.
Renee: Around 40 to 43000 Boe per day.
Orlando Cabrales: Before I wrap up today's call, I would like to highlight our sustainability strategy, where we achieve 100% of our 2024 sustainability goal. Frontera Restored, Protected and Preserved. 769 hectares of land, as well as recirculated 35.2% of its operational water, and utilized 43.4% of generated waste.
Renee: Before I wrap up today's call I would like to highlight our sustainability strategy, where we achieve 100% of our 'twenty to 'twenty four sustainability goals.
So there are restored protected and preserved.
Renee: 769 acres of land.
Renee: As with US, Brazil, collated 35, 2% of its operational water and utilize 43, 4%.
Renee: Generate good ways.
Orlando Cabrales: in the health and safety side. Frontera achieved its best total recordable incident rate performance ever with a 6% reduction compared to the previous year. On our efforts to maintain close relationships with all the stakeholders, including our employees and the communities where we operate, we invest approximately 4.1 million dollars in social projects, benefiting 66,303 people near our operation. and increased local purchases from local contractors by 2% compared to last year. As well as in 2024, Frontera was recognized among the top 20 best companies to work in Colombia by great place to work. We implemented an effective cyber security plan maintaining a zero rate of material cyber security.
Renee: In the health and safety site.
Renee: From that achieved its best got a recordable easier great performance ever with a 6% reduction compared to the previous year.
Renee: On our efforts to maintain close relationship with all the stakeholders, including our employees in the communities, where we operate we invest approximately $4 1 million and social projects.
Renee: Benefiting 66303 people near our operations.
Renee: An increase.
Renee: Card purchases from local contractors by 2% compared to last year.
Speaker Change: As well as in 2024, four terawatts recognize him on the top.
Renee: 20, best companies to work in Colombia by Great place to work.
Renee: We implemented unexpected cyber security plan.
Renee: <unk> zero rate of material side basically routines, yes.
Orlando Cabrales: Additionally, for the fourth consecutive year. during 2024 were recognized as one of the most ethical companies by ethics.
Renee: Additionally, 44 consecutive year.
Renee: Data during 2024, alright recognized as one of the most ethical companies like Eddy Street.
Orlando Cabrales: And finally, with that, I would like to conclude by saying thank you to Oriana and Rene for their comments, and thank you everyone for attending our.
Renee: And finally with that I would like to conclude by saying, Thank you to arena and therefore their comments. Thank you everyone for attending our call.
Operator: I will now turn the call back to our operator who will open up for questions. Thank you.
Speaker Change: I will now turn the call back to our operator, who will open it up for questions.
Speaker Change: 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 telephone keypad.
Operator: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star 4 by the 1 on your telephone keypad. You will hear a prompt that your hand has been raised. And should you wish to cancel your request, please press star for beta 2. If you are using a speakerphone, please lift the handset before pressing any.
Julien: Julien here any thoughts that you had has been raised and should you wish to cancel your request. Please press star two.
Julien: If you're using a speaker phone please lift the handset before listing Inc.
Operator: One moment, please, for your first question. Once again, that is star and one to ask a question.
Julien: One moment. Please for your first question.
Julien: Okay.
Julien: Once again that is star and wanted to ask the question.
Peter Pauly: Your first question comes from the line of Peter Pauly from Jefferson. I'll please go ahead. Thank you for the call and the opportunity for two questions. If it's okay, I'll go one by one. The 25 CAPEX guidance is down about 25% year-on-year with, it looks like, declines year-on-year in development facilities, other CAPEX, and Columbia infrastructure. I just wanted to ask if you could share a little more color on what's driving those year-on-year declines, especially given the slottish production year-on-year. Is CAPEX being spent more efficiently or has the CAPEX profile changed significantly versus 2024? And my second question, is there any level of grant price you would consider, reconsider any elements of your CAPEX plan or shareholder distributions and buybacks all within the context of your hedges in place?
Speaker Change: Your first question comes from the line of P. J <unk> from Jefferies.
Speaker Change: Please go ahead.
P. J: Thank you. Thank you for the call and the opportunity for two questions. If it's okay. I'll go one by one.
P. J: The 25, Capex guidance is down about 25% year on year with it looks like declines year on year in development facilities. Other capex in Colombia infrastructure I was just wanted to ask if you could share a little more color on what's driving those year on year declines, especially given the flattish production year on year.
P. J: With Capex being spent more efficiently or is the capex profile changed significantly versus 2024 and my second question is there any level of Brent price you would consider reconsider any elements of your capex plan or shareholder distributions and buybacks all within the context of your hedges hedges in place. Thank you.
Peter Pauly: Thank you.
P. J: Thank you thank you Peter.
Orlando Cabrales: Thank you, Peter.
Orlando Cabrales: I can take the first question and you can take the second one. And I think on your first question, Peter, I think the answer is our mantra has been value over volume. Yes, certainly, we are reducing the development topics if you compare it with last year, but our production actually is higher this year than last year in our guidance. So we have been much more efficient in the use of our capital. We are also very much concentrated also in bringing efficiency, further efficiency into our cost structure. And we are focusing this year in developing the drilling campaign for our CP6 new facilities capacity, which was increased last year to 360,000.
Speaker Change: I can take the first question on you can take the second one.
P. J: Hmm.
Peter: I think to your first question Peter I.
Peter: I think the honest truth is our mantra has been value over volumes.
Speaker Change: Yes, certainly we are reducing.
Peter: Relevant topics, if you compare it with last year.
Speaker Change: But on my part Alex and Ashley's is higher this year than last year.
Peter: So it would have been much more efficient in the use of our capital.
Peter: We are we are also very much concentrated mostly in the <unk> and bringing efficiency further efficiency and to improve our cost structure.
Peter: And we are focusing this year.
Peter: In developing the drilling campaign for our <unk> and your facilities capacity, which was.
Peter: Increased last year to 260000.
Orlando Cabrales: And so there is room to further optimize the use of that facility, which we already built it last year. And we are also working very hard, as I mentioned in my remarks, to increase production in Kinfath through the Sahara facility, which we are still working to improve. So, with that in mind, we believe the development campus is the right one for the company and it will allow us to bring that maximum that we have of value over volumes with a higher target of production for this year.
Peter: And so there is room to further optimize the use of that.
Peter: Do you think which we already build the last year.
Peter: We are also working very hard as I mentioned in my remarks.
Peter: To increase production I mean in key parts tool.
Peter: Beside our facility, which we are still.
Peter: To improve there.
Peter: So with that in mind, we believe that encompasses.
Peter: Capex is the right one for the company.
Peter: It will it will allow us to two to bring the maximum.
Peter: Maximum that we have for filing over all their volumes.
Hi, you talked a nickel for those for this year.
Rene Burgos: Peter, thank you also for your question. As to Brent price, you know, I think we indicated two Brent prices, $75 and $80. You know, $75 is the one that we struck the plan, or like how Orlando highlighted. We have a range of potential free cashless scenarios between $80 to $125. Our hedges today are through the middle of the year around $70 Brent. So, like, I think we're pretty well covered. It will depend how the rest of the year somewhat works out in our ability to actually enact some of those hedges for us to somewhat re-strike or re-plan.
Peter: Peter. Thank you also for your question as to Brent price I think we indicated to Brent prices, 75%.
Peter: 75% of Wanda, which we start to plan has allowed the highlighted.
Peter: We have a range of potential free cash flow scenarios between 80 to 125.
Peter: Our hedges today or through the middle of the year around $70 Brent.
Peter: I think we're pretty well covered and it will depend how the rest of the year somewhat works out and our ability to actually an extra model suggests frosty somewhat restrike a re.
Peter: The plan for.
Rene Burgos: But for now, I think we're sticking with, you know, that range of potential outcomes. But certainly, you know, if prices continue kind of in a downward trajectory, we would need to kind of adjust our plans or perhaps rethink how our value maximization approach will take. But for now, I think we're pretty good, pretty covered. Great, thank you.
Peter: For now I think we're sticking with that range of potential outcomes, but certainly if prices continue.
Peter: Downward trajectory, we went into it we would need to adjust our plans are perhaps rethink how our valla vectren infrastructure. This will take.
Peter: But for now I think we're pretty good pretty covered.
Peter: Great. Thank you.
Rene Burgos: Thank you.
Speaker Change: Thank you and your next question comes from the line of Christian <unk> from J&J Securities. Please go ahead.
Cristian Fera: And your next question comes from the line of Cristian Fera from KMG Securities, please go ahead. Hello, can you hear me? Yes, I think we can hear you. Thank you. So I have two questions.
Christian: Hello can you hear me.
Peter: Yes.
Peter: Thank you.
Peter: So I have two questions.
Cristian Fera: The first one, if you could please provide some color on the expected shareholder distributions for 2025, including both share repurchases and dividends.
The first one if you could please provide some color on the expected.
Peter: Shareholder distributions for 2025, including both share repurchases and dividends.
Orlando Cabrales: And my second question is, if you have any news to share regarding the infrastructure business bypass.
Peter: My second question is if you have any news to share regarding the infrastructure business divestment. Thank you.
Orlando Cabrales: Okay, on the, I can take Rene's second one, and you can take the first one. And on the second one, as we announced it back in May, sorry, of last year, I mean, we are working diligently to conclude this infrastructure process. We are analyzing various options that we have right now, and we believe that the process, as I think Gabriel mentioned in his remarks, is close, is nearing its final stage. So we hope to announce something soon.
Peter: Okay on the <unk> I can take the second one I mean, you can take the first one.
Peter: On the on the on the second one as we announce it.
Peter: Backing in May or it may sorry of loss of last year. I mean, we are we are working it.
Diligently to conclude.
Peter: Do you see these.
Peter: Brochure process.
Peter: We are analyzing various options.
Peter: That we have right now.
Peter: We believe that the that the project in the south.
Peter: Nationally in his remarks.
Peter: <unk> is close is nearing a final final stage.
Peter: So we hope to announce something soon.
Rene Burgos: Rene, you can take the first one. Thank you, Orlando. Look, on color on distributions, I think that as we laid out in our press release, our distribution is a multi-prong. First, we have NCAVs, then we have our dividend, and then what we've done last year is also the substantial insurer bids. I think as far as direction, I think that you should look at the dividend and the NCAV as a straightforward way to returning capital, and the other means of capital distribution, as Gabriel said, will be confirming to overall oil prices, business results, etc. So that's the best guidance that I can share with you right now, and again, last year we distributed, or since 2024, we distributed over $83 million to shareholders, and since 2022, close to 150.
Peter: And I know you can take the first one.
Peter: Yes, and thank you Linda.
Peter: Color on distributions I think that we've as we laid out in our press release, our distribution if our multi pronged.
Peter: First we have and then we have our dividend and then what we've done last year is also the substantial issuer bids.
Peter: I think as far as direction I think that the.
Peter: You should look at the dividend then there should be a straightforward way to returning capital and the other means of capital distributions as Scott said will be confirming to overall oil prices. This is first of all it's et cetera. So that's the best guidance that I can share with you right now and again last year, we distributed since 2024, we distributed over $83 million to shareholders.
Speaker Change: And over his 2020 to close to 150.
Rene Burgos: So we're really key and focused on shareholder distributions. Of course, this year will be no different with us focusing, depending upon our business expectations.
Speaker Change: We're really keen and focused on shareholder distributions of course this year will be no different we are focusing depending upon our business execution.
Cristian Fera: Thank you, and if I may, a quick follow-up. Do you, maybe it's a bit too early, but do you already know what are your plans for the receipts you're going to get of the infrastructure business divestment?
Speaker Change: Thank you and if I may a quick quick follow up.
Speaker Change: Sure.
Speaker Change: Can you maybe just maybe it's a bit too early but.
Speaker Change: Already know what are your plans for that.
Speaker Change: The proceeds they're going to get off the infrastructure business divestments.
Rene Burgos: Rene, do you want to take that one? Look, I think as we said before in discussions with, you know, with you all and in these conversations, capital allocation is the board's remit, so it will really depend at the time and the form. Once this process is finalized, we will, you know, the board will determine the most optimal way for this capital to be distributed. So I think like as Orlando said, we're nearing the end of the process. We're analyzing various options and as soon as we have better information, we'll communicate with the market in due course.
Speaker Change: Okay do you want to take at Donlin.
Speaker Change: Yes.
Speaker Change: I think as we said before in discussions with.
Speaker Change: With you all any of these conversations capital, Okay and is the board's remit.
Speaker Change: So it really depend at the time and to form once this process is finalized.
Speaker Change: We will the board will determine the most optimal way for this capital can be distributed.
Speaker Change: So I think like I said I must add.
Speaker Change: We're nearing the end of the process.
I'll ask them various options and as soon as we have better information, we will communicate with the market in due course.
Speaker Change: Thanks.
Cristian Fera: Thanks. Thank you.
Thank you.
Operator: Once again, that is star and one to ask a question.
Speaker Change: Once again that is star one to ask a question.
Speaker Change: Okay.
Speaker Change: Yeah.
Alejandra Andrade: Your next question comes from the line of Alejandra Andrade from J.P. Morgan. Please go ahead. Hi, I just wanted to follow up on the hedges. When you released guidance, I think only first quarter hedges were in place. I'm just wondering what is the percentage now that is hedge of. for six months of the year.
Speaker Change: Your next question comes from the line of Alejandro and Johnny from J P. Morgan. Please go ahead.
Alejandro: Hi, I just wanted to follow up on the hedges. When you released guidance I think only first quarter hedges were in place I. Just wondering what is the percentage now that is hedged.
Speaker Change:
Speaker Change: The first six months of the year.
Speaker Change: Hum.
Rene Burgos: Rene, you have that. Yeah, I'll take this one on those. So the the we've had roughly 40% of our of our of our net production, our own $70 spread. for the first six months.
Speaker Change: Thank you Johan.
Speaker Change: Yes, I'll take this one on the we've hedged roughly 40% of our of our.
Speaker Change: Of our net production around $70 spread.
Speaker Change: Gentlemen.
Rene Burgos: Okay, perfect. Thank you. That's our sixth month, so, yes. Thank you.
Speaker Change: Perfect. Thank you.
Speaker Change: The first six months so yes.
Speaker Change: Thank you.
Operator: There are no further questions at this time.
Speaker Change: No further questions at this time I will now hand, the call back to Mr. Orlando Cabrera Lewis for any closing remarks.
Orlando Cabrales: I will now hand the call back to Mr. Orlando Cabrales for any closing remarks. Thank you, thank you operator, thank you to Gabriel and Rene again. Thank you everyone for attending the call and have a good day. Thank you.
Speaker Change: Well. Thank you. Thank you operator, thank you Paul.
Speaker Change: Again.
Thank you everyone for attending the call and have a good day.
Speaker Change: Thank you and this concludes today's call. Thank you for participating you may all disconnect.
Operator: And this concludes today's call. Thank you for participating. You may all disconnect.
Speaker Change: Okay.