Corporate Update and Issue of Equity

Houston, Texas, U.S.A. – 1 August 2016

Frontera Resources Corporation


Corporate Update and Issue of Equity

Frontera Resources Corporation (AIM: FRR), an independent oil and gas exploration and production company, today releases the following update with respect to its operations in the country of Georgia.

Further to the Company’s plans that were outlined in the Shareholder Circular dated 10 June 2016 (“Circular”) and adopted at the Company’s General Meeting on 28 June 2016, it has issued 2,398,786,214 new ordinary shares of US$0.00004 each in the Company (“New Ordinary Shares”) at a price of 0.127 pence in order to create strategic alliances with service providers associated with its operations in the country of Georgia. Specifically, 2,098,937,937 New Ordinary Shares were issued to Uniserve Ltd. and 299,848,277 New Ordinary Shares were issued to Craft 07 Ltd. (both, collectively, “Service Providers”). As stated in the Circular, the price has been calculated based on an average of the daily volume weighted average prices of the shares traded during the 15 consecutive trading days beginning on 28 June 2016.

As described in the June Circular, issuance of these New Ordinary Shares is in consideration of procurement of $4,000,000 of oilfield services by the Service Providers. This strategic alliance will enable implementation of accelerated and more technically advanced operations over the remainder of this year and next year at the Company’s South Kakheti Gas Complex and Shallow Fields Production Unit assets within its Block 12 portfolio. The Company expects that this work will increase revenue from ongoing exploration related pilot-production programs and potentially establish the basis for initiating full-scale commercial development from both areas. Overall, the planned operations are anticipated to achieve a transformational step change in Frontera’s cash flow profile.

In addition, the Company has drawn down on its previously announced Standby Equity Distribution Agreement (“SEDA”) with YA Global Master SPV Ltd to the amount of US $545,000 (“Draw Down”). The Draw Down has been undertaken at a price of 0.0808 pence per share in accordance with the terms of the SEDA, and will result in the issue of 513,365,718 new ordinary shares of US$0.00004 each in the Company (“SEDA New Ordinary Shares”). This funding will be used to advance work programs of the Company and for general working capital purposes.

Application has been made for the New Ordinary Shares and the SEDA New Ordinary Shares to be admitted to trading on AIM, which is anticipated to occur on 4 August 2016 (“Admission”). The New Ordinary Shares and the SEDA New Ordinary Shares will rank pari passu with existing shares of common stock of the Company. Following Admission, Uniserve Ltd. will hold 29.2% of issued share capital in the Company and Craft 07 Ltd. will hold 4.2 % of issued share capital in the Company.

Following Admission, the Company will have 7,193,861,938 ordinary shares in issue with voting rights. The Company does not hold any ordinary shares in treasury and accordingly there are no voting rights in respect of any treasury shares. The aforementioned figure of 7,193,861,938 ordinary shares may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company, under the disclosure requirements applicable to the Company.

Steve C. Nicandros, Chairman and Chief Executive Officer commented:

“We are very pleased to have created these important strategic alliances with Uniserve Ltd. and Craft 07 Ltd. These service providers have been an important part of supporting Frontera’s operations in Georgia for many years. As we look to the future and move ahead with the strong alignment that our new arrangement has created, we believe that our alliance will further enhance Frontera’s ability to successfully execute the value creation objectives that it has targeted.”


Frontera Resources Corporation
Jesse Jefferies
+1 (713) 585-3216

Buchanan Communications
Ben Romney/Hannah Brandstaetter
+44 (0) 20 7466 5000

Nominated Adviser
Cairn Financial Advisers LLP
61 Cheapside, London EC2V 6AX
Jo Turner/ Liam Murray
+44 (0) 20 7148 7900

Cornhill Capital Limited
Nick Bealer
+44 (0) 207 710 9610