Toronto-listed Frontera Energy Corporation said in a statement late on Thursday that its board, in consultation with legal counsel and independent financial advisors, has determined the binding offer received from Parex Resources Inc. to acquire its Colombian upstream operations is superior proposal to another bid previously received from Geopark.
Calgary-based Parex’s offer would see it acquire the same assets as Geopark in a $500 million cash deal, the Frontera statement said, 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 Mar. 12 – to amend the terms of its agreement if it chooses to.
“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,” the Frontera statement, posted on the company’s website, added.
GeoPark in January announced a definitive agreement to acquire all of Frontera Energy’s oil and gas exploration and production assets in Colombia for $375 million.
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.
(Reporting by Marianna Parraga and Julia Symmes Cobb)