An anonymous director reports

FRONTERA ANNOUNCES ANOTHER CAD$42 MILLION (US$30 MILLION) SUBSTANTIAL ISSUER BID

Frontera Energy Corp.'s board of directors has approved the commencement of a second substantial issuer bid pursuant to which the company will offer to purchase from holders of common shares of the company up to 3.5 million shares for cancellation at a purchase price of $12.00 per share (the purchase price), for an aggregate purchase price not exceeding $42-million (equivalent to $30-million (U.S.)).

• Offer results in a 52-cent-per-share distribution or 6.7-per-cent yield (to Frontera's share price prior to the offer's announcement) assuming full and pro rata shareholder participation;
• Over $83-million (U.S.) returned to shareholders in 2024, including successful completion of the offer;
• Additional dividends, share buybacks, bond buybacks or other investor initiatives may be considered in the future.

The offer is expected to commence on Dec. 19, 2024, and remain open for acceptance until 5 p.m. Eastern Time on Jan. 24, 2025, unless extended, varied or withdrawn by the company (the expiration date). Pursuant to the offer, tendering shareholders will have the right to elect to tender a specified number of shares.

The company plans to finance the share repurchases through available cash on hand. The offer is denominated in Canadian dollars, and shareholders will have the option to elect to receive payment in either Canadian or United States dollars.

Purpose of the offer

As part of its efforts to maximize value for shareholders and following the highly participated substantial issuer bid announced in September, 2024, and completed in October, 2024, the company has identified this offer as an attractive and efficient means to return further capital to shareholders. Upon successful completion of the offer, the company will have returned over $83-million (U.S.) of capital to its shareholders this year, including $30-million (U.S.) from the October, 2024, substantial issuer bid, $15.2-million (U.S.) in declared dividends and $7.8-million (U.S.) of share repurchases through the company's normal course issuer bid program.

On Nov. 5, 2024, the last full trading day prior to the date of announcement of the company's intention to make the offer, the closing price of the shares on the Toronto Stock Exchange was $7.71 per share.

Assuming full and pro-rata shareholder participation, the offer represents a 52-cent-per-share distribution equivalent to a 6.7-per-cent yield on the company's stock price prior to the announcement of the offer in the company's third quarter 2024 results. Including all dividends declared this year, the year-to-date distribution total to shareholders would be $1.27 per share (equivalent to a 16.5-per-cent yield).

The board shall continue to consider future investor initiatives in the remainder of 2024 and beyond, including potential additional dividends, share buybacks, bond buybacks or other initiatives, based on the overall results of the business, oil prices and the company's strategic goals.

Frontera intends to file with the Toronto Stock Exchange (the TSX) a notice of intention to commence a normal course issuer bid for its shares subsequent to the completion of the offer (the NCIB). If accepted by the TSX, the company would be permitted under the NCIB to purchase for cancellation, during a 12-month period, up to that number of shares equal to the greater of (i) 5 per cent of the company's issued and outstanding shares and (ii) 10 per cent of the company's public float (as such term is defined in the TSX Company Manual).

Purchase price

Frontera will pay the purchase price of $12.00 per share for each validly deposited share taken up by the company up to a maximum of 3.5 million shares, for an aggregate purchase price not exceeding $42-million (equivalent to $30-million (U.S.)).

Each shareholder who has properly deposited shares and who has not withdrawn such shares will receive the purchase price, payable in cash (subject to applicable withholding taxes, if any), for all shares taken up by the company upon the terms and subject to the conditions of the offer.

If more than 3.5 million shares are tendered for purchase, the company will purchase the shares on a pro rata basis. In that case, shares that are tendered but not purchased, will be returned to shareholders.

Manner of tender

Pursuant to the terms and subject to the conditions of the offer, shareholders wishing to tender to the offer may do so by making an election to tender a specified number of shares (representing, in the shareholders' discretion, all or a portion of the shareholders' shares) at the purchase price.

Additional information

As of Dec. 11, 2024, the company had 80,793,387 issued and outstanding shares. The offer will be for up to approximately 4.33 per cent of the total number of issued and outstanding shares on a non-diluted basis.

The offer is optional for all shareholders, who are free to choose whether to participate and, if they participate, how many shares to tender. Any shareholders who do not deposit their shares (or whose shares are not purchased under the offer) will realize a proportionate increase in their equity interest in the company, to the extent that shares are purchased under the offer.

The terms and conditions of the offer, including instructions for tendering shares, will be included in the formal offer to purchase and issuer bid circular, letter of transmittal, notice of guaranteed delivery, and other related documents. On or about Dec. 19, 2024, the offer documents will be sent to registered shareholders, filed with applicable Canadian securities regulatory authorities, and made available without charge on SEDAR+.

In light of the Canada Post workers' strike and the resulting disruption of mail services, the company may be unable to mail the offer documents to beneficial (non-registered) holders. However, upon resumption of normal mail service, the company intends to arrange for the mailing of the offer documents to the beneficial holders to be completed.

Beneficial holders can retrieve the offer documents on SEDAR+. Copies of offer documents may also be obtained upon written or oral request, without charge, to the company at the company's head office at suite 2000, 222 -- 3rd Ave. SW, Calgary, Alta., Canada, T2P 0B4, or by e-mail at generalcounsel@fronteraenergy.ca.

The offer is not conditional upon any minimum number of shares being tendered. However, the offer will be subject to other conditions described in the offer documents. Frontera reserves the right, subject to applicable laws, to withdraw, extend or amend the offer, if certain events occur at any time prior to the payment for the tendered shares.

The Catalyst Capital Group Inc. and Gramercy Funds Management LLC are the beneficial owners of, or exercise control or direction over, 33,262,348 and 10,808,311 shares, respectively, which in the aggregate represent approximately 54.55 per cent of all issued and outstanding shares. Each of Catalyst and Gramercy has advised the company that their current intention is to deposit shares pursuant to the offer, however, their decision to participate in the offer is subject to market conditions and other factors. Each of Catalyst and Gramercy reserves the right, without notice and for any or no reason, to change its investment decision at any time prior to the expiration date. In addition, certain directors and officers of the company have expressed an intention to tender 244,568 shares to the offer.

The company has engaged Computershare Investor Services Inc. to act as depositary for the offer and BMO Nesbitt Burns Inc. to act as financial adviser and dealer manager. Shareholders who have questions regarding the offer or require any assistance tendering shares may contact Computershare Investor Services by telephone at 1-800-564-6253 (North America) or 514-982-7555 (international), or by e-mail at corporateactions@computershare.com, or BMO Nesbitt Burns by e-mail at FronteraSIB@bmo.com.

About Frontera Energy Corp.

Frontera Energy is a Canadian public company involved in the exploration, development, production, transportation storage and sale of oil and natural gas in South America, including related investments in both upstream and midstream facilities. The company has a diversified portfolio of assets with interests in 22 exploration and production blocks in Colombia, Ecuador and Guyana, and pipeline and port facilities in Colombia. Frontera is committed to conducting business safely and in a socially, environmentally and ethically responsible manner.

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