Parex Resources (TSX: PXT) said March 10 that it entered into an agreement to acquire 100% of Frontera Energy's (TSX: FEC) exploration and production assets in Colombia for $500 million in upfront cash, the assumption of $225 million in net debt and a contingent payment of up to $25 million.
The deal supersedes a prior arrangement between Frontera and GeoPark Ltd. (NYSE: GPRK) that was entered into on Jan. 29, 2026, and has now been terminated. Frontera’s board recommends that shareholders approve the Parex transaction.
The acquisition encompasses 17 blocks spanning more than 1.1 million net acres in Colombia, with estimated current average production of approximately 37,000 barrels of oil equivalent per day. Pro forma 2026 production is expected to reach 80,000 to 88,000 boe/d, making Parex the largest independent Colombia-focused upstream company.
The transaction’s acquisition cost of approximately $19,600 per flowing barrel compares with Parex’s current 2026 valuation of $33,150 per flowing barrel. The deal is expected to be immediately accretive to funds flow per share by more than 40% and to free funds flow per share by more than 25%, with annual cost synergies of $20 million to $50 million.
“The addition of Frontera E&P’s upstream business to our high-quality portfolio establishes Parex as the largest independent Colombia-focused upstream company,” said Imad Mohsen, president and CEO of Parex.
Parex will fund the cash consideration through existing cash, credit facilities and an underwritten financing commitment from Scotiabank. No equity issuance is planned. Pro forma leverage is expected to be approximately 0.8x net debt to EBITDA at closing.
The transaction is expected to close in the second quarter of 2026, subject to approval by 66 2/3% of Frontera shareholders and court approval.
Scotiabank is acting as financial advisor to Parex. Norton Rose Fulbright Canada, Paul Weiss and Brigard Urrutia are serving as legal counsel.
Source: Press Release | Photo Credit: Parex Resources