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Frontera Energy
(TSX:FEC)
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Rating:66Neutral
Price Target:
C$9.50
▲(17.14% Upside)
Action:Reiterated
Date:08/21/26
The score is supported by strong cash generation and improved leverage, plus a technically constructive price trend and a positive, execution-focused earnings call. Offsetting these positives are the sharp recent collapse in profitability and revenue, and valuation uncertainty from a negative P/E alongside an unusually high dividend yield that may be difficult to sustain.
Positive Factors
Strong Cash Generation
Positive operating cash flow and distributable cash flow provide internal funding capacity for operations, debt service and growth. This is especially valuable because the company remains exposed to volatile commodity prices and project financing needs.
Negative Factors
Sharp Profitability Deterioration
The steep revenue decline and large net losses indicate weak earnings quality despite positive EBITDA and cash flow. Persistent losses could erode equity, constrain reinvestment and make future performance highly sensitive to operating conditions.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Cash Generation
Positive operating cash flow and distributable cash flow provide internal funding capacity for operations, debt service and growth. This is especially valuable because the company remains exposed to volatile commodity prices and project financing needs.
Read all positive factors
Frontera Energy (FEC) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$588.80M
Dividend Yield47.6%
Average Volume (3M)44.06K
Price to Earnings (P/E)―
Beta (1Y)-0.31
Revenue Growth-52.12%
EPS Growth-57.79%
CountryCA
Employees857
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)-9.08
Shares Outstanding70,768,845
10 Day Avg. Volume68,054
30 Day Avg. Volume44,062
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)0.54
Price to Sales (P/S)0.32
P/FCF Ratio1.85
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.64
Revenue Forecast (FY)C$1.03B
Frontera Energy Business Overview & Revenue Model
Company Description
Frontera Energy Corporation is an upstream energy company primarily focused on discovering, developing, and extracting crude oil and natural gas resources across South America. Its diverse asset base includes stakes in 35 oil and gas exploration a...
How the Company Makes Money
Frontera Energy makes money primarily by producing and selling crude oil (and, to a lesser extent, natural gas and related hydrocarbons) from its operated and non-operated assets. Revenue is recognized largely from commodity sales volumes multipli...
Frontera Energy Earnings Call Summary
Earnings Call Date:Aug 15, 2026
(Q2-2026)
| Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call conveyed a generally positive tone driven by the successful completion of the Parex transaction, strong Puerto Bahia operational momentum (notably RoRo volume growth and record month), improving adjusted EBITDA and operating cash flow, and concrete commercial and technical progress on the LNG regasification project (take-or-pay with Ecopetrol and FSRU agreement with Excelerate). Balance sheet metrics improved (net debt reduction and net debt/EBITDA below 1x) and targeted shareholder returns were delivered. Key risks include execution timing to achieve first gas in early 2027, initial limited regas capacity during the early phase, and continued reliance on external financing for project advancement. Overall, the positives and clear execution plan materially outweigh the identifiable risks.Positive Updates
Completion of Parex Transaction and Shareholder Return
Completed the plan of arrangement with Parex on June 1, 2026 and returned CAD 8.34 per share to shareholders, marking a major corporate simplification and realization of value.
Negative Updates
Execution Risk Toward First Gas Target
The LNG regasification project is execution-dependent, with management targeting first gas in early 2027; milestones and timely delivery remain critical risks to capture the stated growth opportunity.
Read all updates
Q2-2026 Updates
Positive
Negative
Completion of Parex Transaction and Shareholder Return
Completed the plan of arrangement with Parex on June 1, 2026 and returned CAD 8.34 per share to shareholders, marking a major corporate simplification and realization of value.
Read all positive updates
Company Guidance
The company guided to a disciplined growth path focused on the Puerto Bahia LNG regasification project, targeting first gas in early 2027 under a 7‑year take‑or‑pay with Ecopetrol (initial 2‑year capacity of 126 million cubic feet per day, rising to 300 million cubic feet per day thereafter) and an FSRU lease for an initial 7‑year term (extendable 5–8 years); management reiterated a commitment to maintain leverage below 1x adjusted EBITDA (net debt $114.2m and net debt/adjusted EBITDA 0.98x as of June 30, 2026) supported by Q2 adjusted EBITDA of $30.5m (up 18% YoY), Q2 cash from operations $26m, total cash $56.3m, LTM distributable cash flow $78.8m, and recent shareholder returns of CAD 8.34 per share; financing and project support highlighted included a $30m Bancolombia facility ($10m drawn in‑quarter, $20m disbursed post‑quarter), a $12.6m Macquarie letter‑of‑credit facility, ODL proceeds of $26.8m plus a $5.2m return of capital, near‑term capex of $1.5m in Q2 ($2.5m YTD), and Puerto Bahia revenue of $14.6m with RoRo volumes +85% YoY (April record 17,200 units).Frontera Energy Financial Statement Overview
Summary
Income Statement
22
Negative
Balance Sheet
55
Neutral
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 528.57M | 1.02B | 1.13B | 1.15B | 1.37B | 926.63M |
| Gross Profit | 31.91M | 72.77M | 212.78M | 516.50M | 506.77M | 350.97M |
| EBITDA | 156.34M | 294.29M | 390.90M | 523.25M | 777.26M | 807.66M |
| Net Income | -632.11M | -1.08B | -24.16M | 193.50M | 286.62M | 628.13M |
Balance Sheet | ||||||
| Total Assets | 502.18M | 1.83B | 2.90B | 3.02B | 2.74B | 2.61B |
| Cash, Cash Equivalents and Short-Term Investments | 58.28M | 230.16M | 192.58M | 159.67M | 289.85M | 257.50M |
| Total Debt | 170.19M | 493.01M | 506.04M | 536.82M | 511.55M | 560.13M |
| Total Liabilities | 257.07M | 1.24B | 1.17B | 1.18B | 1.15B | 1.16B |
| Stockholders Equity | 253.79M | 599.85M | 1.72B | 1.82B | 1.58B | 1.40B |
Cash Flow | ||||||
| Free Cash Flow | 231.63M | 176.75M | 159.38M | -24.60M | 204.82M | 15.62M |
| Operating Cash Flow | 355.66M | 386.15M | 510.03M | 411.79M | 620.48M | 327.38M |
| Investing Cash Flow | 80.45M | -234.65M | -339.25M | -484.32M | -383.27M | -186.94M |
| Financing Cash Flow | -574.57M | -128.99M | -128.86M | -62.66M | -193.60M | -108.38M |
Frontera Energy Technical Analysis
Neutral
8.11
Price Trends
8.57
Negative
7.88
Positive
6.06
Positive
Market Momentum
-0.06
Positive
45.12
Neutral
12.60
Positive
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 8.11 is below the 20-day moving average (MA) of 8.46, below the 50-day MA of 8.57, and above the 200-day MA of 6.06, indicating a neutral trend. The MACD of -0.06 indicates Positive momentum. The RSI at 45.12 is Neutral, neither overbought nor oversold. The STOCH value of 12.60 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:FEC.
Frontera Energy Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | C$588.80M | -0.68 | -94.31% | 44.97% | -52.12% | -57.79% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
65 Neutral | C$727.37M | 17.49 | 11.28% | ― | 64.45% | 45.67% | |
64 Neutral | C$469.37M | 22.77 | 2.93% | 16.76% | -27.27% | -79.93% | |
61 Neutral | C$1.02B | 56.41 | 1.39% | ― | -21.66% | ― | |
60 Neutral | C$467.00M | -35.85 | -3.81% | 7.06% | 78.72% | -219.22% | |
52 Neutral | C$488.08M | -110.45 | -2.18% | ― | 408.75% | ― |
* Energy Sector Average
TSE:FEC
Frontera Energy
8.55
5.70
199.89%
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Frontera Energy Corporate Events
Business Operations and StrategyFinancial Disclosures
Frontera Energy Completes Infrastructure Pivot as Q2 Profit Rises
Positive
Aug 15, 2026
Frontera Energy reported second quarter 2026 net income of $29.0 million, with Adjusted EBITDA rising 18% year over year to $30.5 million and strong cash generation from its ODL pipeline interest. The company also reduced net debt and maintained a...
Business Operations and StrategyFinancial Disclosures
Frontera Energy Sets Date for Q2 2026 Results and Investor Call
Neutral
Aug 11, 2026
Frontera Energy Corporation, a Canadian-listed operator of strategic energy infrastructure in Colombia, holds key stakes in the ODL crude pipeline and the Puerto Bahia maritime terminal, both vital components of the country’s energy logistic...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.