Canada's Parex Resources has offered $500 million for Frontera Energy Colombia's assets

Parex Resources announced on Monday that it has submitted a $500 million cash-only proposal to purchase the Colombian Upstream Operations of Frontera Energy.

The offer includes the assumption of debt as well as a contingent payment amounting to $25 million. Parex stated that the bid represents an $125 million premium compared to a previously announced Frontera acquisition agreement.

GeoPark announced in January a definitive deal to purchase all of Frontera Energy's oil, gas and exploration assets in Colombia for $375m.

GeoPark confirmed Monday that Parex's proposal is a "counter-proposal" but stated it has no further comment at this time.

Calgary-based Parex stated that the combination of Frontera and Parex's portfolios will immediately create the largest independent Colombian energy company. Both companies have already partnered in Colombia's VIM-1 energy block.

Imad Mohsen, Parex's Chief Executive Officer, said in a press release that "our all-cash offer... provides immediate value and greater value to Frontera and its investors." He added he expected the board would categorize the bid a "superior proposition."

Frontera's Colombian Portfolio consists of 17 exploration and production blocks, including the Cubiro and Quifa fields. At the end of last year's third quarter, the company reported an average annual production of 38.934?barrels?of oil equivalent per day. Reporting by Nelson Bocanegra, Marianna Pararaga and Hugh Lawson

(source: Reuters)