tiprankstipranks
Trending News
More News >
Frontera Energy Corp (OTC) (TSE:FEC)
:FEC

Frontera Energy (FEC) AI Stock Analysis

Compare
54 Followers

Top Page

TS

Frontera Energy

(OTC:FEC)

56Neutral
Frontera Energy's overall score of 56 reflects a mixed financial outlook. While strong cash flow and recent positive earnings from Q1 2025 are strengths, profitability challenges and high liabilities remain concerns. Technical analysis shows bearish trends, and valuation is negatively impacted by recent earnings losses, though the dividend yield is a positive aspect. Strategic initiatives and shareholder-focused actions provide some optimism, but production and legal challenges pose risks.

Frontera Energy (FEC) vs. S&P 500 (SPY)

Frontera Energy Business Overview & Revenue Model

Company DescriptionFrontera Energy Corporation is a Canadian-based oil and gas company engaged in the exploration, development, and production of crude oil and natural gas. The company operates primarily in Latin America, with significant operations in Colombia, Ecuador, Guyana, and Peru. Frontera Energy focuses on maximizing the value of its asset portfolio through efficient exploration and production strategies, aiming to deliver sustainable growth and returns to its stakeholders.
How the Company Makes MoneyFrontera Energy makes money primarily through the exploration, extraction, and sale of crude oil and natural gas. Its revenue model is centered around the production and sale of these commodities in the global market. The company generates income by selling its oil and gas output to refineries, which then process the raw materials into various petroleum products for industrial and consumer use. Key revenue streams include crude oil production in Colombia and natural gas extraction in Peru, with additional contributions from exploration projects in Guyana and Ecuador. Frontera Energy's earnings are influenced by factors such as global oil prices, production volumes, and the efficiency of its operations. The company also benefits from strategic partnerships and joint ventures with other oil and gas companies, which enhance its exploration capabilities and market reach.

Frontera Energy Financial Statement Overview

Summary
Frontera Energy exhibits mixed financial performance. While the company maintains stable equity and positive cash flow, it faces profitability challenges with negative net income and decreased gross profit margins. The balance sheet shows moderate leverage, but high liabilities demand careful management. Cash flow remains a strength, offering liquidity support.
Income Statement
55
Neutral
Frontera Energy's revenue has shown fluctuations, with a decline from 2022 to 2023 and a slight recovery in 2024. Gross profit margins have decreased significantly from 2023 to 2024, and net income has turned negative in 2024, indicating profitability challenges. The EBIT and EBITDA margins have also deteriorated, highlighting operational inefficiencies. Despite these challenges, the company has a history of strong revenue, which could provide a foundation for future growth with improved cost management.
Balance Sheet
65
Positive
The company maintains a relatively stable balance sheet with a moderate debt-to-equity ratio. Stockholders' equity has been consistent, and the equity ratio indicates a decent asset financing structure. However, total liabilities remain high compared to stockholders' equity, suggesting a need for careful management of leverage. The return on equity has been positive in previous years, but the recent net income losses pose a risk to future equity returns.
Cash Flow
70
Positive
Frontera Energy has shown a positive operating cash flow, which is a strength in maintaining liquidity. The free cash flow has improved from negative in 2023 to positive in 2024, indicating better capital expenditure management. The operating cash flow to net income ratio is favorable, but the recent net income loss could impact future cash flow sustainability. Overall, cash flow management appears strong, providing a buffer against short-term financial pressures.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.13B1.15B1.37B926.63M658.19M
Gross Profit
212.78M516.50M506.77M350.97M-187.13M
EBIT
116.66M154.17M467.31M332.13M-241.25M
EBITDA
390.90M523.25M777.26M807.66M-142.70M
Net Income Common Stockholders
-24.16M193.50M286.62M628.13M-481.91M
Balance SheetCash, Cash Equivalents and Short-Term Investments
192.58M159.67M289.85M257.50M232.29M
Total Assets
2.90B3.02B2.74B2.61B2.06B
Total Debt
506.04M536.82M511.55M560.13M538.24M
Net Debt
313.46M377.15M221.71M302.63M305.96M
Total Liabilities
1.17B1.18B1.15B1.16B1.30B
Stockholders Equity
1.72B1.82B1.58B1.40B703.85M
Cash FlowFree Cash Flow
159.38M-24.60M204.82M15.62M129.04M
Operating Cash Flow
510.03M411.79M620.48M327.38M226.78M
Investing Cash Flow
-339.25M-484.32M-383.27M-186.94M-178.53M
Financing Cash Flow
-128.86M-62.66M-193.60M-108.38M-132.53M

Frontera Energy Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price5.15
Price Trends
50DMA
5.77
Negative
100DMA
6.97
Negative
200DMA
7.42
Negative
Market Momentum
MACD
-0.24
Negative
RSI
48.51
Neutral
STOCH
61.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FEC, the sentiment is Neutral. The current price of 5.15 is above the 20-day moving average (MA) of 4.94, below the 50-day MA of 5.77, and below the 200-day MA of 7.42, indicating a neutral trend. The MACD of -0.24 indicates Negative momentum. The RSI at 48.51 is Neutral, neither overbought nor oversold. The STOCH value of 61.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:FEC.

Frontera Energy Peers Comparison

Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSKEI
73
Outperform
C$288.52M11.6610.02%17.48%-4.66%
TSTNZ
67
Neutral
C$399.00M187.11-13.52%-3.50%-153.25%
TSLGN
60
Neutral
C$400.68M63.272.03%
56
Neutral
$7.17B3.84-4.86%5.83%0.24%-51.87%
TSFEC
56
Neutral
C$398.07M23.060.67%4.91%-0.37%-92.83%
TSCEI
53
Neutral
C$457.69M-5.23%113.34%-11.26%
TSOBE
50
Neutral
C$496.64M5.64-12.88%11.92%-304.98%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:FEC
Frontera Energy
5.15
-3.66
-41.58%
TSE:OBE
Obsidian Energy
6.74
-4.29
-38.89%
TSE:TNZ
Tenaz Energy Corp
14.67
10.70
269.52%
TSE:KEI
Kolibri Global Energy
8.39
4.13
96.95%
TSE:CEI
Coelacanth Energy, Inc.
0.86
0.10
13.16%
TSE:LGN
Logan Energy Corp
0.62
-0.24
-27.91%

Frontera Energy Earnings Call Summary

Earnings Call Date:May 09, 2025
(Q1-2025)
|
% Change Since: 9.11%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
Frontera Energy's Q1 2025 performance shows strong financial results and strategic initiatives to enhance shareholder value. However, challenges in production and exploration, as well as legal disputes in Guyana, present significant hurdles.
Q1-2025 Updates
Positive Updates
Strong Financial Metrics
Frontera Energy generated $83.5 million in operating EBITDA and recorded $27.5 million in net income for Q1 2025. The company also maintained a strong balance sheet with a total cash balance of $199.8 million.
ODL Pipeline Recapitalization
Frontera announced a $220 million non-recourse secured loan for the recapitalization of the LDL pipeline, delivering approximately $115 million in proceeds to Frontera while maintaining future potential from key transportation assets in Colombia.
Strategic Shareholder Returns
The company declared a quarterly dividend of $0.625 per share and plans to commence its NCIB program after the announced substantial issuer bid, having returned $190 million to stakeholders since 2024.
Operational Improvements in Q2
Despite challenges, Frontera's Q2 production has been strong with estimated average daily volumes of approximately 42,400 BOE per day in May.
Ethisphere Recognition
Frontera was recognized by Ethisphere as one of the world's most ethical companies for the fifth consecutive year.
Negative Updates
Production Challenges
Lower-than-expected production in Q1 due to delays in heavy oil drilling, lower water handling at SAARA, natural declines, and increased well interventions.
Exploration Challenges
The Greta Norte-1 well was deemed non-commercial and will be plugged and abandoned.
Guyana Dispute
Dispute with the government of Guyana over the termination of the petroleum agreement for the quarantine block, with Frontera alleging breaches of the UK-Guyana Bilateral Investment Treaty.
Company Guidance
During Frontera Energy's First Quarter 2025 conference call, the company reported generating $83.5 million in operating EBITDA and achieving a net income of $27.5 million. They produced $28.6 million of adjusted infrastructure EBITDA and maintained a total cash balance of $199.8 million. The company announced plans for a $220 million non-recourse secured loan related to its LDL pipeline investments, aiming to distribute approximately $115 million in proceeds. Additionally, Frontera launched a $65 million substantial issuer bid and declared a quarterly dividend of $0.625 per share, totaling $3.5 million. The company's 2025 production guidance was set at 41,000 to 43,000 BOE per day, with notable performance in its Colombian and Ecuadorian operations, despite facing challenges. Frontera's strategic initiatives focus on maximizing shareholder value, including potential infrastructure asset transactions and continued investor-focused measures such as dividends and buybacks, having returned $190 million to stakeholders since 2024.

Frontera Energy Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Frontera Energy Initiates Tender Offer for Senior Notes
Neutral
May 9, 2025

Frontera Energy Corporation has announced a cash tender offer and consent solicitation for up to $65 million of its outstanding 7.875% Senior Secured Notes due in 2028. This move is part of the company’s financial strategy to manage its debt obligations, potentially impacting its liquidity and financial flexibility. The offer includes an early tender and consent payment incentive for holders who respond by a specified deadline, indicating Frontera’s proactive approach to debt management and stakeholder engagement.

Spark’s Take on TSE:FEC Stock

According to Spark, TipRanks’ AI Analyst, TSE:FEC is a Neutral.

Frontera Energy’s overall score reflects mixed financial performance and bearish technical indicators. The company faces profitability challenges and legal risks, but strong cash flow and ethical recognition provide some resilience. The valuation is hampered by negative earnings, though the dividend yield is a positive aspect. Production issues and cost pressures further weigh on the stock outlook.

To see Spark’s full report on TSE:FEC stock, click here.

Private Placements and FinancingStock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
Frontera Energy Reports Strong Q1 2025 Results and Strategic Initiatives
Positive
May 9, 2025

Frontera Energy Corporation reported a strong financial performance in the first quarter of 2025, with a net income of $27.5 million and an operating EBITDA of $83.5 million. The company is advancing its strategic objectives, including the recapitalization of its ODL pipeline investment through a $220 million non-recourse secured loan, which is expected to yield $115 million in net proceeds. This move is part of Frontera’s broader strategy to enhance shareholder value, which includes a $65 million substantial issuer bid and a quarterly dividend declaration. Despite facing challenges such as lower production levels, Frontera is optimistic about future growth, particularly in its infrastructure assets and potential new projects in Puerto Bahia.

Spark’s Take on TSE:FEC Stock

According to Spark, TipRanks’ AI Analyst, TSE:FEC is a Neutral.

Frontera Energy’s overall score reflects mixed financial performance and bearish technical indicators. The company faces profitability challenges and legal risks, but strong cash flow and ethical recognition provide some resilience. The valuation is hampered by negative earnings, though the dividend yield is a positive aspect. Production issues and cost pressures further weigh on the stock outlook.

To see Spark’s full report on TSE:FEC stock, click here.

Financial Disclosures
Frontera Energy to Announce Q1 2025 Financial Results
Neutral
Apr 25, 2025

Frontera Energy Corporation announced it will release its financial and operational results for the first quarter of 2025 on May 8, 2025, after market close. A conference call with key executives will follow on May 9, 2025, to discuss these results, providing stakeholders with insights into the company’s performance and strategic direction.

Spark’s Take on TSE:FEC Stock

According to Spark, TipRanks’ AI Analyst, TSE:FEC is a Neutral.

Frontera Energy’s overall score reflects mixed financial performance and bearish technical indicators. The company faces profitability challenges and legal risks, but strong cash flow and ethical recognition provide some resilience. The valuation is hampered by negative earnings, though the dividend yield is a positive aspect. Production issues and cost pressures further weigh on the stock outlook.

To see Spark’s full report on TSE:FEC stock, click here.

Legal ProceedingsBusiness Operations and Strategy
Frontera and CGX Dispute License Termination by Guyana Government
Negative
Mar 13, 2025

Frontera Energy and CGX Energy, through their joint venture, have received a notice from the Government of Guyana stating the termination of their Petroleum Agreement and Prospecting License for the Corentyne block offshore Guyana. Despite the government’s position, the joint venture maintains that their interests and license remain valid and seeks an amicable resolution with the government. They are prepared to assert their legal rights if necessary and are eager to continue their investments to benefit both the people of Guyana and their shareholders.

Business Operations and Strategy
Frontera Energy Recognized as One of the World’s Most Ethical Companies for 2025
Positive
Mar 11, 2025

Frontera Energy Corporation has been named one of the 2025 World’s Most Ethical Companies by Ethisphere for the fifth consecutive year, highlighting its dedication to business integrity through robust ethics, compliance, and governance programs. This recognition places Frontera among only two honorees in the Oil & Gas industry, reflecting its commitment to integrity and transparency, which fosters trust with stakeholders and enhances its industry positioning.

DividendsBusiness Operations and StrategyFinancial Disclosures
Frontera Energy Reports 2024 Financial Results and Operational Achievements
Neutral
Mar 10, 2025

Frontera Energy reported a net loss of $24.2 million for 2024, despite generating $116.7 million in income from operations and achieving an operating EBITDA of $424 million. The company met all 2024 guidance metrics, including an annual production of 40,288 Boe/d and a production cost of $9.34/boe. Frontera recorded 151.3 million Boe 2P gross reserves and a 1P reserves replacement ratio of 45%. The company also achieved its sustainability goals, including its best-ever TRIR performance, and declared a quarterly dividend of C$0.0625 per share.

Business Operations and StrategyFinancial Disclosures
Frontera Energy to Announce Year-End 2024 Financial Results
Neutral
Feb 21, 2025

Frontera Energy Corporation has announced the release of its financial and operational results for the fourth quarter and year-end 2024, along with its year-end reserves and an operational update scheduled for March 10, 2025. The company plans a conference call on the same day for investors and analysts to discuss these results. This announcement highlights Frontera’s continued focus on transparency and communication with stakeholders, potentially impacting investor confidence and market positioning.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.