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Written by Amy Legate-Wolfe at The Motley Fool Canada
Frontera reported earnings on Wednesday, and yet the stock keeps climbing even after the report came out. Frontera stated it delivered full-year EBITDA of $373.2 million, a 117% increase compared to the same time in 2020. Furthermore, it delivered 37,818 barrels of oil equivalent per day (BOE/D), meeting its 2021 guidance.
Net income for the year reached $628.1 million, with cash on hand of $320.8 million. Finally, the company bought back 3.86 million common shares, about 7.4% of the public float, for cancellation.
Management continues to believe there are great things coming. The company reached its own objectives for the year, and surpassed its earnings guidance. During the last quarter, the energy company was able to even start up some early production at its La Belleza well. It managed to produce about 2,400 BOE/D. It also acquired Petroleos Sud Americanos and agreed to acquire el Dificil block. Both would produce an extra 1,300 and 500 BOE/D respectively once the deals are closed.
Yet analysts seem most intrigued by the Kawa well in offshore Guyana for Frontera stock. The company announced a joint venture and has now completed its exploration. Analysts are encouraged by potential production from the well, as well as from its Corentyne Block.
Frontera has proven that it can continue finding growth opportunities both organically and through acquisitions. It now has several opportunities for investors to look forward to in 2022. This comes on top of a strong year, with oil prices only rising higher.
Yet the stock is a steal, trading at just 1.7 times earnings. It’s now out of overbought territory as well, but still up there with a relative strength index of 62 as of writing.
Shares are up 7.3% on Friday, and 93% in the last year.
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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.