AI Sentiment: Bullish
Reason: Frontera Energy Corporation announced an additional substantial issuer bid (SIB) worth CAD$42 million. This is expected to offer liquidity to shareholders and be immediately accretive. The CEO emphasised the company's strong performance and commitment to capital discipline.
The leading crude oil and natural gas exploration and production company, Frontera Energy Corporation, has announced an additional substantial issuer bid (SIB) worth CAD$42 million (approximately US$30 million). This move comes following the successful completion of the company's prior SIB worth CAD$100 million (approximately US$76 million) in December 2020.
The latest SIB allows Frontera to repurchase for cancellation up to CAD$42 million of its common shares from shareholders. The offer price for the shares will be determined and the associated shares will be selected on a pro-rata basis, subject to certain exceptions. The SIB will offer liquidity to shareholders and is expected to be immediately accretive to shareholders.
CEO of Frontera, Richard Herbert, stated that the new SIB reflects the company's commitment to capital discipline and returning capital to shareholders. He also emphasized the company's strong operational performance, which allowed them to generate significant free cash flow despite the challenging market conditions in 2020.
The company has also announced that the results of its previously announced CAD$33 million (approximately US$25 million) modified Dutch auction substantial issuer bid, which expired on February 2, 2021, were not sufficient to allow the company to purchase any of its common shares. However, the company remains committed to its capital return program and will continue to evaluate opportunities to return capital to shareholders.
Frontera Energy Corporation is a Canadian public company and a leading explorer and producer of crude oil and natural gas. With operations in South America and a strategy to grow by leveraging its existing assets and expertise, the company aims to provide long term value to its shareholders through a disciplined capital allocation strategy and operational excellence.