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BOGOTA, March 6 (Reuters) – Toronto-listed Frontera Energy Corporation said late on Thursday that its board has determined a binding offer received from Parex Resources to acquire its Colombian upstream operations is a superior proposal to another bid previously received from GeoPark.
GeoPark announced in January a definitive agreement to acquire all of Frontera’s oil and gas exploration and production assets in Colombia for $375 million.
Calgary-based Parex’s offer would see it acquire the same assets as GeoPark in a $500 million cash deal, Frontera said in a statement, including the assumption of debt and a contingent payment of $25 million.
GeoPark would be paid a $25 million “Purchaser Break Fee” from Frontera should the companies’ previous deal fall through, the statement said, adding GeoPark has been advised of the superior offer determination and has five business days – ending March 12 – to amend the terms of its agreement if it chooses.
“At this time, there can be no assurance that the Parex Offer will result in a transaction or that any transaction contemplated thereby will be completed. The GeoPark Arrangement Agreement remains in effect, and the Frontera Board of Directors continues to act in accordance with its fiduciary duties and the terms of the GeoPark Arrangement Agreement,” said the Frontera statement, posted on the company’s website.
Frontera is one of the largest private producers in Colombia. Its portfolio comprises 17 exploration and production blocks, including the Quifa and Cubiro fields. The company reported average annual production of 38,934 barrels of oil equivalent per day at the end of the third quarter last year.
“The board is reviewing Frontera’s latest communication in order to make a decision,” a GeoPark spokesperson said.
Reporting by Marianna Parraga and Julia Symmes Cobb; Editing by Nia Williams
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