September 2022
Frontera Energy Corp.
Canaccord Genuity Acts as Financial Advisor to Frontera Energy on its Joint Venture Amendment with CGX Energy
Canaccord Genuity is pleased to announce that on July 22, 2022, its client, Frontera Energy Corp. (TSX:FEC) (“Frontera” or the “Company”) together with CGX Energy Inc. (TSX:CGX) (“CGX”), as joint venture partners (the “Joint Venture”) in the Petroleum Prospecting License for the Corentyne block offshore Guyana, announced that the companies have entered into an agreement to amend the Joint Operating Agreement originally signed between CGX and a subsidiary of Frontera on January 30, 2019, as amended (the “Agreement”), effectively farming into the Corentyne block and securing funding for the Wei-1 exploration well.
As part of the Agreement, CGX will transfer 29.73% of its participating interest in the Corentyne block to Frontera in exchange for Frontera funding the Joint Venture's costs associated with the Wei-1 exploration well for up to US$130 million and up to an additional US$29 million of certain Kawa-1 exploration well, Wei-1 pre-drill, and other costs. In addition, CGX shall assign an additional 4.94% of its participating interest in the Corentyne block to Frontera as consideration for the repayment of the outstanding principal amounts under (i) the previously announced US$19 million convertible loan to CGX dated May 28, 2021, as amended, and (ii) the previously announced US$35 million convertible loan to CGX dated March 10, 2022, as amended, and a cash payment of US$3.8 million. As a result of this agreement, CGX will have a 32.00% participating interest and Frontera will have a 68.00% participating interest in the Corentyne block.
Canaccord Genuity acted as financial advisor to the Company including providing a fairness opinion.
The Canaccord Genuity team included Gene McBurney, Brad Cameron, Maximiliano Valera, and Hernan Martinez.
