Frontera Energy Corporation has announced a plan to spin off its operations in Colombia, creating two independent entities: Frontera Exploration & Production and Frontera Infrastructure. This strategic separation aims to maximise shareholder value by isolating the upstream and infrastructure segments, each with different economic cycles and investment profiles.
Two entities with distinct priorities
Frontera Exploration & Production (E&P) will become a company exclusively dedicated to oil and gas exploration and production. For the twelve months ending in September 2025, Frontera E&P generated $336.1mn in operating EBITDA, with a net leverage of 0.7x. The company intends to maintain strict financial discipline while continuing to focus on upstream operational performance.
Frontera Infrastructure will group the equity interests in the Oleoducto de los Llanos Orientales S.A. (ODL) — 35% owned via Frontera Pipeline Investment AG — and Sociedad Portuaria Puerto Bahía, 99.97% owned. Over the same period, this segment reported adjusted EBITDA of $117.4mn, including $59.4mn in dividends received from the ODL pipeline.
Growing infrastructure assets
ODL transports an average of 238,000 barrels of oil per day, representing about 30% of Colombia’s national production. The pipeline generated $289mn in EBITDA over the past year, with $170mn distributed in dividends to its shareholders. Frontera Infrastructure aims to leverage this profitability to develop near-term strategic projects, particularly at Puerto Bahía.
Puerto Bahía, located in the Bay of Cartagena, operates both liquid and dry cargo terminals. In 2025, it completed a pipeline connection with the Cartagena Refinery and accelerated the development of a liquefied petroleum gas (LPG) terminal in partnership with GASCO. The LPG terminal is expected to be operational in the first half of 2026.
Differentiated financial indicators
Frontera E&P’s adjusted net debt amounts to $220mn, compared to $154.2mn for Frontera Infrastructure. The latter reports a net debt to distributable cash flow ratio of 2.0x. The spin-off will allow each entity to independently structure its balance sheets and investment strategies.
Frontera’s management believes that the transaction will help surface value not currently reflected in the company’s market capitalisation. Completion of the separation remains subject to shareholder and regulatory approval, with a target date in the first half of 2026.
