Frontera Reports 10% Growth in Value of Proved Plus Probable (2P) Reserves to $2.1 Billion (C$27.95/Share), NPV10 After Tax

Added 26.2 MMBOE of Net 2P Reserves Achieving 112% Reserve Replacement Ratio

Fourth Quarter and Full Year 2019 Results Will Be Released After Market on Thursday, March 5, 2020, Followed by a Conference Call on Friday, March 6, 2020 at 10:00 A.M. EST

TORONTO, Feb. 18, 2020 /PRNewswire/ - Frontera Energy Corporation (TSX: FEC) ("Frontera" or the "Company") today announced the results of its annual independent reserves assessment and provided notice of fourth quarter and full year 2019 financial results and conference call. All dollar amounts in this news release and the Company's financial disclosures are in United States dollars, unless otherwise noted. The financial and operational information contained below is based on the Company's unaudited expected results for the year ended December 31, 2019.

For the year ended December 31, 2019, the Company's reserves were independently evaluated by DeGolyer and MacNaughton ("D&M"), in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook maintained by the Society of Petroleum Evaluation Engineers (Calgary Chapter) ("COGEH") and National Instrument 51-101 Standards for Disclosure of Oil and Gas Activities ("NI 51-101") and are based on the Company's 2019 year-end estimated reserves as evaluated by D&M in their reserves report dated February 12, 2020 with an effective date of December 31, 2019 (the "Reserves Report"). Additional reserve information as required under NI 51-101 will be included in the Company's F1 Form which is expected to be filed on SEDAR on March 5, 2020. See "Advisory Note Regarding Oil and Gas Information" section in the "Advisories", at the end of this news release. Numbers in tables may not add due to rounding differences.

2019 Reserves Report Highlights

For the year ended December 31, 2019:

• Added 26.4 MMboe of Proved plus Probable ("2P") reserves on a gross basis and 26.2 MMboe of 2P reserves on a net basis, representing a reserve replacement ratio of 102% and 112% respectively. 75% of the reserves replacement resulted from improved production performance at Quifa, which was driven by the additional water handling expansion project combined with stronger than previously modeled production from Sabanero, Guatiquia and Arrendajo, while positive exploration results and improved horizontal well performance at CPE-6 delivered the remainder.
• An 11% increase in Proved Developed Producing ("PDP") reserves in Colombia to 39.6 MMboe. The addition of 27.2 MMboe of PDP reserves represents a 117% reserve replacement ratio for Colombian PDP on a gross basis. Colombia 2P reserve life index remains stable at 7.1 years, reflecting increased 2019 production and reserves.
• Has a 2P Net Present Value ("NPV") of upstream assets, discounted at 10% after tax, of $2.1 billion, or C$27.95/share ($33.17/share before tax), compared to $1.9 billion, or C$26.24/share as at December 31, 2018, representing an increase of 10% on a dollar value basis and 7% on a per share basis, or an increase in per share value of 12% on a constant currency basis.
• Achieved a finding and development cost of $11.53/boe in 2019 on a 2P basis in Colombia with upstream reserves based capital expenditures of $289 million. Including changes in future development costs, 1P finding and development cost was $12.12/boe and $17.46/boe on a 2P basis in Colombia.
• A 6% increase in net Proved plus Probable plus Possible ("3P") reserves, highlighting the improvement in the Company's longer term development prospects resulting from exploration success on the CPE-6 block during 2019.
• The 2019 reserves evaluation does not include any of the positive impact associated with the recent announced exploration discovery on the La Belleza well on the VIM-1 block in the Lower Magdalena Valley, onshore Colombia.

2019 Year-End D&M Certified Gross Reserves Volumes⁽¹⁾

2019 Year-End D&M Certified Net Reserves Volumes⁽¹⁾

The following tables provide a summary of the Company's oil and natural gas reserves based on forecast prices and costs effective December 31, 2019 as applied in the Reserves Report. The Company's net reserves after royalties incorporate all applicable royalties under Colombia and Peru fiscal legislation based on forecast pricing and production rates evaluated in the Reserves Report, including any additional participation interest related to the price of oil applicable to certain Colombian blocks, as at year-end 2019.

2019 Year-End D&M Certified Reserves Volumes by Product Type and Country

2019 2P Reserves Reconciliation

Five Year Crude Oil Price Forecast - D&M Reserves Reports⁽¹⁾

Colombia Reserve Life Index ("RLI")⁽¹⁾

Net Present Value Before Tax Summary - D&M Reserve Report (2020 Brent Forecast)⁽¹⁾

Net Present Value After Tax Summary - D&M Reserves Report (2020 Brent Forecast)⁽¹⁾⁽²⁾

Calculation of 2019 Reserve Metrics - Colombia Gross

Future Development Costs - Using D&M Forecast Prices and Costs⁽¹⁾

Notice of Fourth Quarter and Full Year 2019 Results

Fourth quarter and full year 2019 results are expected to be released after market on Thursday, March 5, 2020 followed by a conference call for investors and analysts on Friday, March 6, 2020 at 8:00 a.m. (MST) and 10:00 a.m. (EST/GMT-5). Participants will include Gabriel de Alba, Chairman of the Board of Directors, Richard Herbert, Chief Executive Officer, David Dyck, Chief Financial Officer and select members of the senior management team.

Analysts and investors are invited to participate using the following dial-in numbers:

A replay of the conference call will be available until 11:59 p.m. (EST/GMT-5) Friday, March 20, 2020.

About Frontera:

Frontera Energy Corporation is a Canadian public company and a leading explorer and producer of crude oil and natural gas, with operations focused in South America. The Company has a diversified portfolio of assets with interests in more than 40 exploration and production blocks in Colombia, Peru, Ecuador and Guyana. The Company's strategy is focused on sustainable growth in production and reserves. Frontera is committed to conducting business safely, in a socially and environmentally responsible manner. Frontera's common shares trade on the Toronto Stock Exchange under the ticker symbol "FEC".

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Advisories:

Cautionary Note Concerning Forward-Looking Statements

This news release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding estimates and/or assumptions in respect of production, costs and revenue, reserve and resource estimates, potential resources and reserves) are forward-looking statements. In particular, statements relating to "reserves" are deemed to be forward-looking statements since they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and that the reserves can be profitably produced in the future. These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: uncertainty of estimates of capital and operating costs, production estimates and estimated economic return; uncertainties associated with estimating oil and natural gas reserves; failure to establish estimated resources or reserves; volatility in market prices for oil and natural gas; fluctuation in currency exchange rates; inflation; changes in equity markets; perceptions of the Company's prospects and the prospects of the oil and gas industry in Colombia and the other countries where the Company operates or has investments; uncertainties relating to the availability and costs of financing needed in the future; the uncertainties involved in interpreting drilling results and other geological data; and the other risks disclosed under the heading "Risk Factors" and elsewhere in the Company's annual information form dated March 13, 2019 filed on SEDAR at www.sedar.com. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.

Unaudited Financial Information

This news release contains certain financial and operating information based on unaudited financial results for the year ended December 31, 2019. The limitations discussed above for "Cautionary Note Concerning Forward-Looking Statements" also applies to the unaudited financial results used in this news release. These estimated amounts may change as a result of the financial statements being audited which changes may be material. The Company anticipates filing its audited financial statements and related managements discussion and analysis for the year ended December 31, 2019 on SEDAR on March 5, 2020. Per share information is based on the total number of the Company's common shares outstanding at December 31, 2019 on a fully diluted basis.

Non-Standardized Measures

This news release includes non-standardized measures. Readers are cautioned that these measures, such as reserve life index, reserves replacement ratio, NPV per share and finding and development cost, should not be construed as alternative measures of financial performance. Such measures have been included to provide readers with additional means to evaluate the Company's performance but these non-standardized measures are not reliable indicators of the Company's future performance and therefore must not be relied upon unduly. The Company's method of calculating these measures may differ from other companies and, accordingly, they may not be comparable to similar measures used by other companies. Readers are cautioned that the information provided or derived by these measures should not be relied upon for investment purposes.

Advisory Note Regarding Oil and Gas Information

The reserves information contained in this press release has been prepared in accordance with NI 51-101 but only present a portion of the disclosure required thereunder. Complete reserves disclosure required in accordance with NI 51-101 will be available on SEDAR at www.sedar.com on or around March 5, 2020.  Actual oil and natural gas reserves and future production may be greater than or less than the estimates provided in this news release. There is no assurance that forecast prices and costs assumed in the Reserves Report, and presented in this this news release, will be attained and variances from such forecast prices and costs could be material. The estimated future net revenue from the production of the disclosed oil and natural gas reserves in this news release does not represent the fair market value of these reserves.

The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation.

There are numerous uncertainties inherent in estimating quantities of crude oil, reserves and the future cash flows attributed to such reserves. The reserve and associated cash flow information set forth above are estimates only. In general, estimates of economically recoverable crude oil and natural gas reserves and the future net cash flows therefrom are based upon a number of variable factors and assumptions, such as historical production from the properties, production rates, ultimate reserve recovery, timing and amount of capital expenditures, marketability of oil and natural gas, royalty rates, the assumed effects of regulation by governmental agencies and future operating costs, all of which may vary materially. For those reasons, estimates of the economically recoverable crude oil and natural gas reserves attributable to any particular group of properties, classification of such reserves based on risk of recovery and estimates of future net revenues associated with reserves prepared by different engineers, or by the same engineers at different times, may vary.

The Company's actual production, revenues, taxes and development and operating expenditures with respect to its reserves will vary from estimates thereof and such variations could be material. All evaluations and reviews of future net revenue are stated prior to any provisions for interest costs or general and administrative costs and after the deduction of estimated future capital expenditures for wells to which reserves have been assigned. The tax calculations used in the preparation of the Reserves Report are done at the field level in accordance with standard practice, and do not reflect the actual tax position at the corporate level which may be significantly different.

Boe Conversion 

The term "boe" is used in this news release. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of cubic feet to barrels is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In this news release, boe has been expressed using the Colombian conversion standard of 5.7 Mcf: 1 bbl required by the Colombian Ministry of Mines and Energy. In addition, as the value ratio between oil and natural gas based on current market values is significantly different from the energy equivalency of 5.7:1, utilizing a conversion of 5.7:1 may be misleading as an indication of value.

Definitions:

"Proved Developed Producing Reserves" are those reserves that are expected to be recovered from completion intervals open at the time of the estimate.  These reserves may be currently producing or, if shut-in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty.

"Proved Developed Non-Producing Reserves" are those reserves that either have not been on production or have previously been on production but are shut-in and the date of resumption of production is unknown.

"Proved Undeveloped Reserves" are those reserves expected to be recovered from known accumulations where a significant expenditure (e.g. when compared to the cost of drilling a well) is required to render them capable of production.  They must fully meet the requirements of the reserves category (proved, probable, possible) to which they are assigned.

"Proved" reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.

"Probable" reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.

"Possible" reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10 percent probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves.

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SOURCE Frontera Energy Corporation