Frontera Energy Corp., formerly Pacific Exploration & Production, has signed an agreement to acquire the outstanding 36.36 percent ownership of Pacific Midstream Limited (PML) from the International Finance Corporation and from funds related to the International Finance Corporation.
Following the acquisition, Frontera will own 100 percent of PML, which will enable the company to pursue initiatives related to the reduction of, and unwinding of, various transportation commitments, including fixed-rate take-or-pay arrangements.
Consideration for the acquisition will be $225 million in cash, paid in installments over a 36-month period, plus accrued interest over unpaid amounts.
“This is a very strategic acquisition for Frontera as we pursue a series of initiatives intended to reduce our corporate transportation costs, provide long-term transportation flexibility, and reduce fixed-cost transportation obligations,” said Gabriel de Alba, chairman of Frontera.
During the year ended Dec. 31, 2016, Frontera received $120.4 million in cash dividends from associated companies and distributed $41.8 million in cash dividends to minority interests of PML.
Frontera Energy Corp. is a Canadian public company and a leading explorer and producer of crude oil and natural gas. In June, the company planned to invest $2.5 billion in a Peru oilfield asset. The oilfield, known as Lot 192, is the largest in the country and once produced 10,000 barrels of crude per day. But production is currently suspended because the aging pipeline serving the area was shut down early last year after suffering various spills.
