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TORONTO, July 13, 2018 /CNW/ - Frontera Energy Corporation (TSX: FEC) ("Frontera" or the "Company") announces that the Toronto Stock Exchange (the "TSX") has accepted its notice of intention to make a normal course issuer bid for its common shares ("Common Shares"). The notice provides that Frontera may purchase, during the twelve-month period commencing July 18, 2018 and ending July 17, 2019, up to 3,543,270 Common Shares, representing approximately 3.5% of the Company's 100,011,664 issued and outstanding Common Shares as at July 9, 2018 (the "NCIB"). There are no persons acting jointly or in concert with the Company in respect of the NCIB.
In connection with its NCIB, Frontera has entered into an automatic share purchase plan (the "Plan") with its designated broker to facilitate the purchase of Common Shares under the NCIB at times when Frontera would ordinarily not be permitted to purchase its Common Shares due to regulatory restrictions or self-imposed blackout periods. Frontera self-imposes regular blackouts during the period commencing 15 days prior to the release of the Company's quarterly financial results (and 30 days prior to the release of the Company's annual financial results) and ending at the opening of trading on the first business day following public release of such results. Pursuant to the Plan, before entering a blackout period, Frontera may, but is not required to, instruct the designated broker to make purchases under the NCIB based on parameters established by Frontera. Such purchases will be determined by the designated broker based on Frontera's parameters in accordance with the rules of the TSX, applicable securities laws and the terms of the Plan. The Plan has been pre-cleared by the TSX and will be implemented effective July 18, 2018.
Frontera is authorized to make purchases under its NCIB during the period from July 18, 2018 to July 17, 2019 in accordance with the requirements of the TSX. Purchases subject to the NCIB will be carried out pursuant to open market transactions through the facilities of the TSX or alternative trading systems, if eligible, by CIBC Capital Markets on behalf of Frontera in accordance with applicable regulatory requirements. The price to be paid by Frontera for any Common Share will be the market price at the time of acquisition, plus brokerage fees, or such other price as the TSX may permit. All Common Shares purchased by Frontera under the NCIB will be returned to treasury and cancelled. Frontera has not purchased any of its Common Shares within the last twelve months.
Frontera believes that, from time to time, the market price of its Common Shares may not fully reflect the underlying value of its business and future prospects and financial position. In such circumstances, Frontera may purchase for cancellation outstanding Common Shares, thereby benefitting all shareholders by increasing the underlying value of the remaining Common Shares.
The average daily trading volume of Frontera's Common Shares was 56,920 Common Shares over the period between January 1, 2018 and June 30, 2018. Consequently, under TSX rules, Frontera is allowed under its NCIB to purchase daily, through the facilities of the TSX, or alternative trading systems, if eligible, a maximum of 14,230 Common Shares representing 25 per cent of the average daily trading volume, as calculated per the TSX rules. In addition, Frontera may make, once per week, a block purchase of Common Shares not directly or indirectly owned by insiders of Frontera, in accordance with TSX rules.
The indenture, dated as of June 25, 2018, pursuant to which US$350 million aggregate principal amount of 9.70% senior notes of the Company due 2023 were issued, (the "Indenture") imposes certain restrictions on the Company's ability to repurchase its Common Shares (see the Company's material change report of July 3, 2018). However, the Company does not expect that the terms of the Indenture will prevent the Company from carrying out planned purchases under the NCIB.
Frontera Energy Corporation is a Canadian public company and a leading explorer and producer of crude oil and natural gas, with operations focused in Latin America. The Company has a diversified portfolio of assets with interests in more than 30 exploration and production blocks in Colombia and Peru. The Company's strategy is focused on sustainable growth in production and reserves. Frontera is committed to conducting business safely, in a socially and environmentally responsible manner. Frontera's common shares trade on the Toronto Stock Exchange under the ticker symbol "FEC".
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Cautionary Note Concerning Forward-Looking Statements
This news release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, repurchases of Common Shares pursuant to the NCIB) are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the failure to realize the anticipated benefits of the NCIB; the risk that the market price of the Common Shares will be too high to ensure purchases under the NCIB will benefit Frontera and its shareholders; a failure to execute purchases under the NCIB; general economic, market and business conditions; stock market volatility; and the other risks disclosed under the heading "Risk Factors" and elsewhere in the Company's annual information form dated March 27, 2018 filed on SEDAR at www.sedar.com. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
SOURCE Frontera Energy Corporation
For further information: Grayson Andersen, Corporate Vice President, Capital Markets, +57-314-250-1467, [email protected], www.fronteraenergy.ca