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Frontera Energy reduces 2020 CAPEX by 60%

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Oilfield Technology,

Frontera Energy has responded to the Covid-19 pandemic and low oil prices by reducing planned 2020 CAPEX by around 60% to a range of US$130 to US$150 million.

Those expenditures will be primarily focused on development and maintenance activities in the company's core assets of Quifa SW, CPE-6 and its light and medium oil business unit in Colombia. The revised capital plan has been developed with the goal of optimising production while maximising the cash balances of the company during this period of lower oil prices.

With these changes, revised average annual production in 2020 is expected to be in the range of 55 000 to 60 000 bpd, a decrease of only 8% compared to 2020 guidance despite the significant decrease in CAPEX. The company has deliberately shut-in a number of wells that are not economic to operate at current prices and will monitor operations continuously to optimise cash generation.

The company is also actively working to reduce production, transportation and G&A costs, and will provide further information on the results of those initiatives as the financial goals are achieved.

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