HOUSTON, TX -- 08/29/08 --
Frontera Resources Corporation (London Stock
Exchange, AIM Market - Symbol: FRR; OTCQX Market, U.S.A. - Symbol: FRTE),
an independent oil and gas exploration and production company, today
announced an update of operations at its Shallow Fields Production Unit,
Block 12, Georgia.
Development drilling operations at the Mtsare Khevi Field have continued to
progress since the completion of a multi-well workover program during the
second quarter of 2008. Production results from this program, as reported
previously by Frontera, confirmed the basis for commencement of a new
development program. During the second half of August, the first two wells
were successfully drilled as part of a continuous drilling program designed
to drill as many as 60 new development wells within the field.
To date, the MK#12 and MK#25 development wells have been drilled to total
measured depths of approximately 355 meters (1,164 feet). As expected,
three oil and gas bearing zones were encountered within the Upper Pliocene
age Akchagil formation between depths of approximately 200 meters to 315
meters with mud log oil shows present in these horizons. Well log analysis
indicates approximately 20-30 meters of potential gross pay in each well.
These results have confirmed reservoir thickness and continuity observed in
older existing offset wells that were perforated and tested in Frontera's
workover program earlier this year. Production testing of these wells is
underway and will continue over a period of 30-60 days. Development
drilling will continue with the commencement of the MK#22 well while
additional surface locations are being prepared in advance of planned
continuous drilling operations. Dedicated rigs and equipment from within
Georgia are being utilized to undertake this program with an objective of
drilling as many as 20 wells this year.
The Mtsare Khevi Field is located in the western portion of Block 12 with
multiple objective reservoirs situated at depths between 200 meters and
1,100 meters. It was discovered and partially delineated with multiple
exploration wells from 1989 to 1994, but never developed and produced.
After completing a field study in 2007 that indicated this field
potentially contains approximately 5 million barrels of recoverable oil
reserves, Frontera designed a plan to bring the shallow reservoirs from the
Akchagil formation into production. Additional potential exists in deeper
Miocene age sandstone horizons that have previously tested and flowed oil.
This potential is currently under study and will become the focus of future
operations to fully develop the Mtsare Khevi Field.
Steve C. Nicandros, Chairman and Chief Executive Officer, commented:
"The commencement of our new drilling campaign within the Shallow Fields
Production Unit at the Mtsare Khevi Field has progressed very well, and we
are encouraged by the results and efficient pace of our early work in this
new development program. As drilling continues, our rolling development
plan calls for these shallow wells to be completed and brought into
production as quickly as possible in order to ramp up production from the
field, as it represents an important near-term value component within our
overall portfolio."
Frontera's Shallow Fields Production Unit is located in the central portion
of Block 12 and represents what the company believes to be an extensive
trend of low-cost, low-risk undeveloped oil and gas reserves. Containing
four discovered yet undeveloped or underdeveloped fields that have
additional exploration potential, objectives are considered to be
traditional, well-known reservoirs of Pliocene and Miocene age that are
situated at depths from 10 meters to 1,500 meters.
Notes to Editors:
1. Frontera Resources Corporation is an independent Houston, Texas,
U.S.A.-based international oil and gas exploration and production company
whose strategy is to identify opportunities and operate in emerging markets
around the world. Frontera has operated in Georgia since 1997 where it
holds a 100 percent working interest in a production sharing agreement with
the government of Georgia. This gives Frontera the exclusive right to
explore for, develop and produce oil and gas from a 5,060 square kilometer
area in eastern Georgia known as Block 12. For more information about
Frontera Resources, please see www.fronteraresources.com. For more
information about Frontera's Shallow Fields Production Unit, please see
www.fronteraresources.com/operations/mirzaani2.php.
2. Gerard Bono, Frontera's Vice President and Chief Reservoir Engineer, is
the qualified person who reviewed and approved the estimated reserve
information contained in this announcement. These estimates are currently
being reviewed by Netherland, Sewell & Associates and will be released as
soon as practicable.
3. This release contains certain forward-looking statements, including,
without limitation, expectations, beliefs, plans and objectives regarding
the potential transactions, potential drilling schedule, well results and
ventures discussed in this release, as well as reserves, future drilling,
development and production. Among the important factors that could cause
actual results to differ materially from those indicated by such
forward-looking statements are: future exploration and development
activities; availability and performance of needed equipment and personnel;
seismic data; evaluation of logs and cores from wells drilled; fluctuations
in oil and gas prices; weather conditions; general economic conditions; the
political situation in Georgia and neighboring countries; and other factors
listed in Frontera's financial reports, which are available at
www.fronteraresources.com/investors/finreports.php. There is no assurance
that Frontera's expectations will be realized, and actual results may
differ materially from those expressed in the forward-looking statements.
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Enquiries:
Frontera Resources Corporation
Liz Williamson
Vice President, Investor Relations and Corporate Communications
(713) 585-3216
Email Contact
Brunswick Group LLP
Patrick Handley / Camilla Gore
London: +44 207 4045959
Nominated Advisor:
Morgan Stanley
Jon Bathard-Smith
+44 20 7425 8000
