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Good day ladies and gentlemen. My name is Roger [ph], and I will be your conference operator today. Welcome to Frontera Energy's Fourth Quarter and Year End 2022 Operating and Financial Results Conference Call. All lines are currently on mute to prevent any background noise.
I would like to remind you that this conference call is being recorded today and is also available through audio webcast on the company's website.
Following the speakers' remarks, there will be time for questions. Analysts and investors are reminded that any additional questions can be directed to the company at ir@fronteraenergy.ca. This call contains forward-looking information within the meaning of applicable Canadian securities laws relating to activities, events or developments the company believes or expects will or may occur in the future. Forward-looking information reflects the current expectations, assumptions and beliefs of the company based on information currently available to it.
Although the company believes the assumptions are reasonable, forward-looking information is not a guarantee of future performance. Forward-looking information is 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 information. The company's MD&A for the quarter ended December 31, 2022, and the company's annual information form dated March 1, 2023, and other documents it files from time to time with securities regulatory authorities, describe the risks, uncertainties and material assumptions and other factors that could influence actual results. Any forward-looking information speaks only as of the date on which it is made, and the company disclaims any intent or obligation to update any forward-looking information, except as required by law.
I would now like to turn the call over to Mr. Gabriel de Alba, Chairman of the Board of Frontera Energy. Please go ahead.
Thank you, operator. Good morning and welcome to Frontera's fourth quarter and year-end 2022 earnings call. Joining me on today's call are Orlando Cabrales, Frontera's Chief Executive Officer; and René Burgos Díaz, Frontera's Chief Financial Officer. Also available to answer questions at the end of the call, we have Victor Vega, VP, Field Development, Reservoir Management and Exploration; Alejandra Bonilla, General Counsel; Ivan Arevalo, VP Operations; and Renata Campagnaro, VP Marketing, Logistics and Business Sustainability.
Thank you for joining us. 2022 was a strong financial and operational year for Frontera. The company delivered average daily production of 41,382 BOE per day, a 9% increase compared to 2021 production average and in line with its increase and tightened 2022 production guidance.
The company increased full-year operating EBITDA by 70% to $641.9 million within the company's $9,200 per barrel in the 2022 guidance range. The company finished the year with a total cash position of approximately $313 million, including restricted cash of $23 million. Frontera remains committed to enhancing shareholders returns. In 2022, the company returned over $91 million to shareholders through its NCIB and SIB programs.
Since 2018, Frontera has returned more than $300 million to shareholders through dividends and share buybacks, while maintaining strong credit metrics. In addition, since 2017 the company has resolved more than $2.6 billion in continued liabilities and commitments permanently eliminating legacy issues. The company's focus on unlocking shareholder value from its upstream Columbia and Ecuador business. Its standalone and growing midstream business and its potentially transformational offshore exploration program in Guyana.
In 2022 Frontera advanced the company's exciting development and lower-risk exploration portfolio in Columbia and Ecuador and has started investments in additional water handling facilities at Quifa and CPE-6 in support of the Company's 50,000 barrels per day production target.
Also in 2022 Frontera's strengthened its midstream portfolio with acquisition of the remaining 40% interest in Pipeline Investment Limited. Frontera now owns 35% of the ODL pipeline, which generated over $215 million in EBITDA in 2022. Since 2019, the Company has increased its interest in Puerto Bahia by approximately 60% to 99.8%. Frontera's interest in the ODL pipeline and in Puerto Bahia creates a unique standalone midstream business, which provides shareholders with significant upside potential.
In Guyana, the Joint Venture discovered light oil and condensate at the Kawa-1 well, offshore Guyana and has successfully drilled the first prospective geologic horizons in the Upper Maastrichtian at the Wei-1 well, the Joint Venture's second exploration well in the Corentyne block, which is performing several days ahead of schedule.
Frontera's assets with strong operating performance and some balance sheet has positioned the Company to deliver its 2023 objectives and to continue generating value for shareholders by unlocking the sum of its parts.
I'll now turn the call over to Orlando Cabrales, Frontera's CEO and our CFO, René Burgos, who will share their views on the four quarter and full-year results. Orlando?
Thank you, Gabriel and good afternoon everyone, and thank you for taking the time to join us this morning. I am pleased with Frontera's 2022 operating and financial results. We delivered record production at CPE-6, which contributed to 2% quarter-over-quarter production growth to 41,806 BOE per day and 9% year-over-year growth to 41,382 BOE per day. The Company increased water-handling capacity at Quifa to approximately 1.55 million barrels of water per day at year end and we plan to grow to 2 million barrels of water per day by mid-2024 as the SAARA water treatment facility comes on-line. And at CPE-6 where the Company expects to increase oil and water-handling capacity to 240,000 barrels of water per day in 2023 and 480,000 barrels of water per day in 2025, building the foundation to grow production to 50,000 BOE per day.
The Company safely and responsibly executed $314 million in capital spending in support of its Colombia and Ecuador upstream onshore business and $104 million on its exciting Guyana offshore exploration program. I am also pleased with the Company's continued efforts to manage its cost structure. While production costs were higher year-over-year due to increased energy tariffs, maintenance, internal transportation costs and well services, Frontera's transportation costs and G&A were in-line with 2021. The Company also increased its operating netback by 60% to $59.78 per BOE, increased its net sales realized price by 40% to $82.59 per BOE, reduced its restricted cash position by approximately $40 million and increased its uncollateralized credit lines to $118 million.
In our Midstream segment, we revamped Puerto Bahia's leadership, adding expertise in the container business to drive incremental opportunities in the dry cargo terminal. For the year ended 2022, revenues from third-party liquids and general cargo through Puerto Bahia increased 41% to approximately $40 million, compared to 2021. Over 80% of Puerto Bahia's EBITDA is now generated from third-parties.
For 2022, the Midstream business generated approximately $47 million in segment cash flow from operations. Frontera achieved 102% of its 2022 ESG goals, offset 52 of emissions, reserve and restore 1,747 hectares of key connectivity corridors in Casanare and Meta and recycle 15% of its operating water and 17% of its solid waste in the Colombian operations.
The company invested approximately $4.31 million on education, inclusive economic development and quality of life initiatives benefiting 73,000 people through 218 social projects in Ecuador, Peru, and Colombia. Importantly, I'm pleased to confirm the company's 2023 production guidance of 40,000 to 43,000 BOE per day. In 2022, we further diversify our production mix increasing our conventional natural gas production to approximately 9,700 Mcf per day up 94% compared to 2021.
We also grew natural gas liquids production to approximately 960 BOE per day in 2022 up 144% compared to 2021. In the fourth quarter of 2022, we drilled 17 development wells at Quifa, Cajua, CPE-6 and Cubiro blocks and one injector well at Quifa. This converts to 14 development wells in the prior quarter. In 2022, the company drilled 67 development wells compared to 42 in 2021. Currently, the company has five drilling rigs and three work order rigs active at its Quifa, CPE-6, Cubiro and Corcel/Guatiquia and VIM-22 blocks in Colombia.
In Guyana, Frontera and CGX joint venture partners in the petroleum prospecting license for the Corentyne block. Commence drilling operations on the Wei-1 well on January 20th, 2023 and the well is currently at 15,400 feet measure. There have been no lost time safety or environmental incidents since starting operations. Drilling operations have gone as planned and the first prospective geological horizons in the Upper Maastrichtian have been successfully, successfully drilled several days ahead of schedule.
Geophysical locks are currently being obtained in the open hole section within which hydrocarbon shows were encountered. When drilling operations presume deeper prospective horizons in the Lower Maastrichtian, Campanian and Santonian sections will be targeted.
The Wei-1 well is located approximately 14 kilometers northwest of the Joint Venture's previous Kawa-1 light oil and condensate discovery. The Wei-1 well is targeting Maastrichtian, Campanian and Santonian aged stacked sands within channel and fan complexes in the northern section of the Corentyne block. The well is expected to take approximately four to five months from well spud to reach total depth.
Subsequent to the quarter, the Government of Guyana approved an Appraisal Plan for the northern section of the Corentyne block which commenced with the Wei-1 well. Following completion of Wei-1 drilling operations and upon detailed analysis of the results, the Joint Venture may consider future wells per its appraisal program to evaluate possible development feasibility in the Kawa-1 discovery area and throughout the northern section of the Corentyne block. Any future drilling is contingent on positive results at Wei-1 and the JV has no further drilling obligations beyond the Wei-1 well.
I would also note that on February 27th, 2023, the JV completed the process of relinquishing the Demerara Block through a mutual termination agreement with the Government of Guyana.
Turning now to 2022 reserves, I'm pleased with Frontera's 2022 reserves results. As I mentioned earlier, we increased average daily production by 9% in 2022 compared to 2021 while delivering 2P gross reserves of 175 million barrels with an MPV before taxes of $3.7 billion, an increase of 22% year-over-year. Importantly, we grew CP-6 2P net reserves to 41 million barrels while increasing annual average production to approximately 5,000 BOE per day, demonstrating our success in increasing reserves from less developed fields and passing Quifa for the most reserves by block in the company. And we increase our gross PDP reserves replacement ratio to 150% primarily driven by the advances in the development of Quifa, Hamaca and VIM-1.
We also increased gross gas and liquids reserves by 11% year-over-year to 21 million barrels, supporting our efforts to further diversify our production mix. Over the last three years, Frontera has average 16.6 million barrels gross 2P reserves additions achieve 108% reserves replacement ratio and 11.6 years reserves life index. Looking ahead, we will invest between $170 million to $200 million in 2023 on our exciting global risk and nearfield exploration portfolio in Colombia and Ecuador, and the high impact Guyana exploration program reloading our reserves opportunity set for future growth.
I would now like to turn the call over René Burgos, Frontera's Chief Financial Officer.
Thank you, Orlando. Thank you all for joining us today as well. I'd like to take a moment to highlight a few key financial aspects of our fourth quarter and year-end results. The company recorded net income of $197.8 million or $0.0229 [ph] per share in the fourth quarter of 2022. This compares with a net loss of $26.9 million or $0.30 per share in the prior quarter and net income of $629.4 million or 6.6 per share in the fourth quarter of 2021.
The company's fourth quarter net income included operating income of $286.8 million. This included a non-cash reversal of impairments of $229.8 million, partially offset by $68.6 million of income tax expense. Foreign exchange losses up $28.2 million and finance expense of $14.2 million. This compared to net income of $629.4 million in the fourth quarter of 2021. For the year-ended December 31st, the company reported an income of $286.6 million. This included operating income of $643.4 and included a non-cash reversal impairment of $229.8 million, partially offset by income tax expense of $249.3 million, foreign exchange losses of $76.4 million, primarily related to our midstream business and finance expense of $53 million.
This compared to net income of $628.1 million for the year-ended December 31st, 2021. Cash provided by operating activities in the fourth quarter of 2022 was $138.3 million compared with $120.8 million in Q3 and $113.5 million in the Q4 of 2021. The increase in cash by operating activities quarter-over-quarter was primarily due to positive variations of working capital offset by lower benchmark Brent oil prices.
The company generated $620.5 million of cash from operations in 2022, which compares to $327 million in 2021. During the year, the Company primarily invested $417.6 million in capital expenditures, which included $62 million in exploration expenditures in onshore Colombia and Ecuador and $100 million in Guyana. $94 million in debt service payments, and $91 million in share buybacks, and $36 million to increase its indirect interest in the ODL pipeline to 35%.
Operating EBITDA was $145 million in the Q4 compared with $173.2 million in Q3 and $148.6 million in the Q4 of 2021. The decrease in operating EBITDA quarter-over-quarter was primarily a result of lower commodity prices, lower volumes sold in the fourth quarter and higher energy input costs. Frontera's weighted average Brent price was $98 per barrel in 2022, generating $641.9 million of EBITDA, up 70% compared to 2021 and within the $90 to $100/bbl 2022 guidance.
The company reported a total cash position of $313 million at December 31, 2022 relatively flat when compared to September numbers of $309.1 million and $320.8 million at December 31, 2021.
I'd like to take a minute to talk about our midstream business. Following the company's purchase of ISCs interest in the ODL pipeline in Q3 Frontera has strengthened its midstream cash flows and created a standalone and growing midstream business. To provide better clarity on this important part of our business and in direct response to requests from many segments of the market.
You will know in our Q4 financial statements and MD&A we have disclosed additional information of our Frontera's midstream business. We look forward to your questions. The company's midstream segment reported income from operations for the three months and year end December 31, 2022 of $14.9 million and $54.3 million respectively. This compares with $19.4 million and $77.8 million for the same periods in 2021, which included from Peru Colombian's liquid terminal take or pay, which ended in December, 2021.
As Orlando mentioned earlier, for the year ended 2022, revenues from third-party liquids and general cargo through Puerto Bahia was up to 39.6% or up 41% compared to 2021 levels. Today over 80% of Puerto Bahia's EBITDA is now generated from third-parties. For the year ended 2022, ODL generated $215.1 million of EBITDA and $120.1 million of net income. This represents an 11% year-over-year growth on both ends. Frontera, through its wholly-owned subsidiary Pipeline Investments Limited, now owns a 35% equity interest in ODL pipeline.
Lastly, I would like to talk about our risk management strategy. Frontera uses derivative commodity instruments to manage exposure to price volatility by hedging a portion of its oil prices. Consistent with the strategy, the company entered into new put hedges totaling 2.16 million barrels to protect a portion of the company's production through May, 2023. These hedges were at a price greater than $70 a barrel.
As of March 1, 2023 Frontera has entered into FX hedges totally $115 million, using zero cost callers, protecting various levels depending on the quarter. I will point you as well to our MD&A financial statements for further information.
I would like now to turn the call back to Orlando for closing remarks.
Thank you, René. As you have heard, Frontera had very busy and successful four quarter and full-year in 2022. Turning our attention to 2023, I'm very excited about our capital program, which aims to deliver stable cash flow between $425 million to $475 million, operating EBITDA at $80 per barrel average brand prices from our proven and diverse asset base by also investing for future growth through facilities expansion and both near field and high impact exploration.
We anticipate investing approximately between $185 million to $250 million to deliver approximately between 40,000 and 43,000 BOE per day. A 13% decrease in developing the spending as compared to 2022. The 2023 program is fully funded from existing cash and 2023 cash flows features balance capital allocation across our most productive and prospective blocks, basins and countries supports our ongoing efforts to diversify our production mix and raise the foundation for the company's path to grow production to 50,000 BOE per day.
In 2023, we will advance the company's exciting development and lower-risk exploration portfolio in Colombia and Ecuador investing infrastructure facilities at Quifa and CPE-6 to increase production, leverage our advanced transportation and logistical structure to maximize realize prices, mature our self-sustaining and growing midstream business, including Puerto Bahia and ODL execute our hedging program to protect our revenue generation and manage our exposure to price volatility and seek to build on our Kawa-1 light oil and condensate discovery with the Wei-1 well our second exploration well offshore Guyana.
In 2023, we anticipate total capital spending of approximately $385 million to $455 million, which is approximately 10% lower at the midpoint compared to Frontera's 2022 guidance. We anticipate total Colombian and acquired capital expenditures of $265 million to $350 million, which is approximately 70% at the midpoint of the company's 2023 capital budget. Capital expenditures will be divided between development and exploration activities. We anticipate directly -- that directing approximately $250 million to $255 million towards the company's base Colombia and Ecuador upstream activities.
In Colombia, we also anticipate spending approximately $110 million to $130 million to drill 55 production wells, mainly in Quifa, CPE-6, Cubiro and Corcel fields complete '24 well interventions and drill to inject the wells and approximately $75 million to $85 million on development facilities, primarily to increase oil and water handling capacity at CPE6 and Quifa.
And finally, as mentioned, we intend to invest $170 million to $200 million on our Colombia, Ecuador and Guyana exploration programs. We are delivering on our strategy. We are delivering value focused production, cash flow reserves from our base Columbia operations, achieving continuance operational improvement across the business, creating a self-sustaining and growing midstream business in Portuaria and ODL. Advancing our exciting development and exploration portfolio in Columbia, Corentyne block offshore Guyana offshore, returning capital to shareholders and extending our track record of ESG delivery and performance across the business.
In summary, 2022 was a good year for Frontera and 2023 is looking even better. We have a solid outlook, strong balance sheet, and excellent team, and we will continue to generate value for our shareholders.
With that, I would like to conclude by saying thank you to Gabriel and René for the comments and thank you everyone for attending our call. I will now turn the call back to our operator who will open the call up for questions.
Thank you. Can you hear me. We'll now begin the question-and-answer session. [Operator Instructions]. One moment please for your first question. Your first question comes from Roman Rossi from Canaccord. Please go ahead.
Good morning everyone, and thanks for taking my question. Congratulations on the results. So I have a couple. The first one is regarding Wei-1, so I just wanted to ask, what's the pending cash commitment for the well and when it will be recorded in your financial statement?
Can you re-ask the question? What is -- what commitment?
The pending cash for Wei-1?
So I think as we disclosed to in our JOA amendment discussion, we are committed $130 million to fund the well, and that is what drove our increased interest as from 12% to 68%. So the -- as to your recording question, when did it get recorded? It's an accounting question. So it gets recorded as it gets spent.
Okay. And during 2022, U.S. spends around $20 million, $30 million in way. So the remaining commitment should be recorded during first quarter of 2023, I assume?
So remember it takes four to five months, so it will be between the first and second quarter. The second part is that 130 is exclusive of, so the '22 comprise a few other points. Some pre-drilling activity, and I think we highlighted this in the JOA, so the '22 doesn't necessarily correlate directly to the 130.
Great. And the second one is regarding the NCIB. I know it's ending in March. Are you expecting to launch a new one afterwards?
Look, I think that we are -- we -- we're focused on driving shareholder value and we'll continue to review all strategic alternatives that create and generate the most value for all of our stakeholders and shareholders. And we're currently discussing that and it's a Board, it's a decision for the Board to make.
Awesome. And…
As we have said before, I mean we remain committed to returning a capital to our shareholders, so.
Great. And the final question is regarding the port in Guyana. And so are you expecting any cash out of Frontera for the port and do you have like a timeline when CGX will keep building this?
The answer on the cash is no, and I will defer this to CGX.
Okay. Thank you.
Yep. Thank you everyone.
Thank you.
Thank you. Your next question comes from [indiscernible]. Please go ahead.
Hi, gentlemen. Great quarter. Great year. First wanted to commend you on that. I think you guys are doing a bang up job, so I wanted to start off with that.
[Indiscernible] if you can speak a little louder or closer, that'll be great.
Yes, can you hear me okay now?
This is much better. Yes. Thank you.
Yes, okay. You're welcome. Yes, I was saying first off, a great quarter, great year. I just wanted to commend you all on that. I think you guys have been doing a great job. I had two questions. First question is maybe was a little bit addressed in the prior one. Is there any interest at all in bringing back a dividend? I guess my question comes from the fact, there have been a lot of shareholder buybacks over the last year, but the stock price really hasn't shown the increased equity value. And so I was wondering if there's any consideration of a dividend. And then I guess the second question is more technical related in regards to the Wei-1 well, given the kind of more simplified, well designed, is there any interest in keeping that well later for some utility value? I know that previously we had abandoned the previous well, but this one has a different well design and I'm curious if it's just going to be temporarily abandoned or the plan is also to abandon it. Thank you.
You want to take the first one and Victor can take the second one.
Yes, I will take the dividend question and that's a great question. We had a dividend policy that ended in 2020 at the behalf of some of our shareholders and due to certain tax attributes as to how our dividends are taxed because of our holding structure, we decided to prefer share buybacks as a vehicle to do it. But like I said before, we continue to review opportunities to return capital to our shareholders and make it in the manner that is most efficient. And we will continue to discuss that at the board level and revert back with any changes, but considering it. But as of right now, I think that there is nothing on the agenda regarding dividends.
Okay. This is Victor Vega, on the second question, the second part of the question related to the usage of the well in the future. So two things that I would like to highlight. The first one is that, as you point out, the well design is much simpler because of the fact that we are going shallower. With respect to Kawa and in terms of what do we plan to do with the well. So we will have to assess that when we get to the end of the well which [indiscernible] what we have found. But most likely what we are going to end up is with a temporary abandonment or permanent abandonment. But that will be something that we will decide depending on the well results and the state of the well at that point.
Okay. Thank you for taking my question. Again, great quarter and great year. Thank you.
Thank you.
Thank you. Your next question comes from [indiscernible]. Please go ahead.
Hello and great quarter guys. Also my questions are regarding the Wei-1 well. So first of all I'd like to ask is how closely is the geology comparing to your pre-drill model? Also, what logs are currently being run and are planned to be run over each of the open hole sections? How long following the end of the well will it take to provide an official reserves estimate or resource estimate? And so also if this well looks really promising at the end, and you kind of alluded to this, Victor, if it's temporarily abandoned, I'm assuming that you would potentially be able to use it for a sidetrack appraisal at a later date. Is that correct?
Yes, okay. So this is Victor again. You asked a lot of questions, let me make sure that, I capture all of them correctly. So, let me go first. I'm going to start with the last one that you asked about the usage of the well. Yes, as we pointed out Kristine in the previous answer, we will see what happens with the well board at that point, right, in terms of what we found and whether or not in terms of the operational status of the well, it would make sense to keep the well or part of the well to do something like what we are proposing. So that's something that we will have to look at when we get there, but certainly it's a good question that you're asking and something that we will have to consider. In terms of the -- what we have seen so far with respect to the geology.
Yes, that Maastrichtian is relatively good, but remember that we're still in the Upper Campanian, so remember that our main horizons are in the Maastrichtian and sorry we are in the Upper Maastrichtian and our main targets are in the Lower Campanian and the Santonian, so we still have some ways to go. So therefore, right now this is not the main part of the well, just the initial part of the well. So when we get into the resume the operations, after the operations that we're conducting right now to collect data, then we'll continue to the best part of the most important part of the well. So I think that's what I would say.
Perfect. I think you answered all my questions. With the exception of the log, so during when you're actually going over your target zones, what series of logs and data are you planning on acquiring?
I think Kristine in the way I would answer that is that, I mean, our priority now is to drill successfully the well. I mean we are on time, ahead of schedule, which is great and we expect that as successful logging and data acquisition will allow us, I mean to get that information, so that preliminary work on North Corentyne estimates can be further advanced. So I wouldn't say anything else on that.
Okay. Thank you.
Thank you, Kristine [ph].
Thank you. [Operator Instructions]. Your next question comes from Oriana Covault from Balanz. Please go ahead.
Hi, good afternoon. This is Oriana Covault with Balanz. Thanks for taking my question. I had two separate questions moving from the Guyana update. First with regards to the income tax that you reported for this quarter and the effective tax rate. So just wanted to understand, how you are provisioning vis-a-vis next years with the increased tax burden and how would this play out with if you still have ongoing tax credit that could prevent further drag in cash tax payments?
Thank you, Oriana. So two things. You want a clarification on our or the tax that we report in 2022 and visibility as to how we're recording tax in 2023. Is that that question?
Yes.
So for, for 2022, you saw mostly an adjustment on deferred taxes, and this is a combination of us consuming some of our NOLs, some of the tax attributes that we've been carrying and also utilizing some tax credits. The second part of the question as to 2023, the way that you should anticipate us provisioning taxes going forward is it's, again accounting driven. So you should start us accruing the taxes that are owed, but simultaneous with that, we are actually also maximizing some of the deferred taxes that we have available to minimize the tax burden related to that, as well as additional tax credits that we cannot have on hand. The best that I can point you to is in our guidance, we actually pointed to our expectations of cash tax income taxes for 2023.
And what we did for the market is we provided ranges. So for modeling purposes, what you can do is look at the price ranges that we provided, and you would see anywhere from 30 to 50, I think at 75, and then it goes at 80, I think it's 90, or is it 85.
80 and 85.
80 and 85 and you can get a sense of how we are provisioned for the cash costs related to our tax income in 2023 which already includes our view as to the best use of our tax attributes that we have on balance sheet. Is that helpful?
Yes, perfect. That's very clear. And maybe just another one in terms of the operations, maybe if you can comment on what are you seeing in terms of discounts to international prices, have you seen this getting tighter because it was my understanding that for heavy crew during the first quarter, these spreads were turning to get wider. So just what are you seeing so far during the year and what are your expectations going forward?
Are you talking about OpEx?
No, no realized prices.
The differentials, talking about differentials.
Vis-à-vis.
Are you talking about differentials?
Yes.
Differentials?
Yes, differentials. Yes, exactly.
Yes, what we are seeing is that in the first, in the first quarter of the year, we are seeing a higher differentials compared with the previous quarter. In any case, we are doing better than the benchmark. But certainly we are seeing that in the market for the first quarter. The good thing from our perspective, we analyze that we have this capability, internal capability to take advantage of the prices and we do the market of our products directly. So we have been doing better than the benchmark. We are seeing that in the market, and we are going to monitor that on a daily basis and try to get the best price for the company.
Perfect. That's clear. Maybe sorry, one last one. And just going back to your opening remarks, with regards to the Midstream business, you mentioned additional initiatives to increase value and both Puerto Bahia and ODL, so maybe if you can comment a bit more on where you think and how are you thinking of the business in that sense?
Okay. I mean the good, I mean the first thing I would say is to highlight what Gabriella already said, which is that we have now a controlling interest in Puerto Bahia, which give us the authority to change the direction distributor or direction of the company and unlocking the value out of the port. We believe that the Puerto is a unique asset. It's a state-of-the-art facility. Last year, the port manage 50,000 barrels per day of oil and oil products. Now that gives you an indication of the level of activity that we are seeing in the ports.
We have the largest run-on, runoff at cargo operator in the country. And we have a standalone EBITDA between $15 million and $20 million. As we stated, 80% of that is coming from third parties. So which is great and the last thing I would say is that last year we revamped the management team of Puerto Bahia with the orientation of developing the containers business in the port.
No look, I would address since I'm the finance guy, I would add a couple of just extra data points. We have assets here that has significant value. On a combined basis, if you take the 35% interest in ODL and you combine it with our 100% interesting in Puerto Bahia or 99.8%, you're talking to a business that has a combined proportional EBITDA in excess of $90 million. That's exciting too to us and that's why when we're referred to a standalone business is that this is the central resource to feed, it has growth opportunities. And we believe that if we continue to mature this business, this could generate significant equity upside potential for our shareholders that you don't see reflected in our stock today.
Perfect that's very clear. Thanks and I'm going to [indiscernible] thanking my -- for taking my questions.
Thank you. [Operator Instructions]. There are no further questions at this time. Should you have any further questions, please e-mail ir@fronteraenergy.ca. This concludes the call. Thank you all for participating.