The company will have a 100% working interest in the block, upon completion of the deal with PCR
Frontera Energy has agreed to purchase a 35% working interest from Petroquímica Comodoro Rivadavia’s wholly owned subsidiary PCR Investments in Colombia’s El Dificil block for $13m.
The Canadian company has also completed the acquisition of 100% of the issued and outstanding shares in Petroleos Sud Americanos (PetroSud).
The deal includes acquisition of PetroSud’s 65% working interest in the El Dificil block as well as 100% interests in Entrerrios and Rio Meta blocks.
Frontera will have a 100% working interest in the El Dificil block, upon completion of the transaction with PCR.
The total consideration for the acquisition of PetroSud’s assets and PCR’s interest in El Dificil would cost around $40m, including the assumption of $18m in PetroSud debt, according to the company.
The firm stated: “Frontera’s acquisition of 100% interest in El Dificil block supports the Company’s strategy to increase gas production, lowers carbon emissions and includes strategically located, high quality gas facilities.”
El Dificil block is situated in an emerging core area, which is around 75km from Frontera’s interests in La Creciente, VIM-22 and VIM-1 blocks.
The firm’s 100% working interest in El Dificil block, along with its acquisition of PetroSud’s stakes in Entrerrios and Rio Meta Blocks, is anticipated to add around 1,800boe/d of total production.
The production mix includes around 7.7mmcf/d of conventional natural gas, 120bbl/d of natural gas liquids, 260bbl/d of heavy oil and 60bbl/d of light and medium crude oil.
Frontera is expecting an increase in El Dificil production to 2,000 – 3,000boe/d between 2022 and 2024.
Subject to customary closing conditions and approval of the transaction by the Agencia Nacional de Hidrocarburos, the PCR deal is expected to be completed in the second half of this year.
In August last year, Frontera Energy announced the spudding of the Kawa-1 exploration well, offshore Guyana.