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 (“Frontera” or the “Company”), today announces the closing of a one-year revolving credit facility (the “Credit Facility”) with a company associated with Steve Nicandros, a Director of the Company, and an additional member of the Company’s executive management (together, the “Lenders”). The Company also announces that its Annual Meeting of Stockholders will be held in Houston, Texas, on February 25, 2011. Additional details regarding the meeting will be provided in due course.
Under the terms of the Credit Facility, which is effective from 7 January 2011 (the “Effective Date”), the Company has the right to draw up to $1.0 million in advances, or up to $2.0 million if agreed by the Company and the Lenders. Each advance will accrue interest at a rate of 15% per annum and will fall due for repayment on the first anniversary of the Effective Date. Amounts advanced under the Credit Facility may be repaid and re-borrowed up to the maturity date, and may be converted, at the discretion of the Lenders, into (i) an instrument having equivalent terms to a third-party loan provided to the Company during the term of the Credit Facility or (ii) common stock of the Company at a market-based price, provided the Company has sufficient shares of common stock available for such conversion. In each case, any conversion will be on a basis determined as fair and reasonable by the independent Directors of the Company at such time, having consulted with the Company’s Nominated Adviser.
The additional funds made available under the terms of the Credit Facility will be used to support Frontera’s ongoing operational and working capital requirements.
As a result of the fact that the funds to be advanced under the terms of the Credit Facility will be provided in whole or in part by a Director of the Company, the entering into of the Credit Facility by the Company constitutes a related party transaction for the purposes of the AIM Rules for Companies. The independent Directors of the Company, being all Directors with the exception of Mr. Nicandros (the “Independent Directors”), consider, having consulted with Strand Hanson Limited (“Strand Hanson”), the Company’s Nominated Adviser, that the terms of Credit Facility are fair and reasonable insofar as the Company’s shareholders are concerned. In providing its advice, Strand Hanson has taken into account the Independent Directors’ commercial assessment of the terms of the Credit Facility.
Frontera Resources Corporation
Vice President, Investor Relations and Corporate Communications
Strand Hanson Limited
James Harris / Paul Cocker / Liam Buswell
+44 (0)20 7409 3494
Arbuthnot Securities Limited
+44 (0)20 7012 2000
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. Frontera Resources Corporation shares are traded on the London Stock Exchange, AIM Market – Symbol: FRR and via the Over-the-Counter Market, U.S.A. – OTCQX Symbol: FRTE.