Frontera Resources Corporation (London Stock Exchange, AIM Market – Symbol: FRR; OTC Market – Symbol: FRTE), an independent oil and gas exploration and production company (“Frontera” or the “Company”), today provides an update on operations at the Mirzaani #5 well in the Mirzaani Field, located within its Shallow Fields Production Unit, Block 12, in the country of Georgia.
A multi-zone frac completion at the Mirzaani #5 well, located in the undeveloped Mirzaani Northwest extension of the field, was successfully completed in late September. The frac completion targeted Zones 13 and 16/17, at depths of approximately 897-909 meters and 1,057-1,075 meters, respectively, commingling these intervals. After a 36-hour cleanout, the well delivered a 48-hour initial average flow rate of approximately 230 barrels per day of fluid, at an average flowing well head pressure of approximately 230 psi, including an average of approximately 100 barrels per day of oil with associated gas, from the 28 meters (92 feet) of fraced pay. The well has continued to flow naturally at a 14-day average rate of approximately 130 barrels per day of fluid, including 60 barrels per day of 29.5O API oil and associated gas. The well will remain on cleanout production operations for the next 30 days in order to continue to recover the remainder of the approximately 2,200 barrels of injection water that was pumped into the reservoir formations during fracing operations. During this early production period, the well will be monitored and analyzed, after which flow parameters will be determined for the sizing of a submersible pump to maximize production rates from the well. Production logs also will be recorded in order to determine production rates from individual reservoir intervals for purposes of future reserves booking.
The Mirzaani #5 frac completion constitutes an essential first step towards increasing near term production at the Mirzaani Field. As development continues within the field, similar frac completions will be employed in existing and future wells.
Discovered in 1932, the Mirzaani Field has historically produced approximately 7 million barrels of oil, but contains extensive undeveloped and underdeveloped areas. An independent assessment by Netherland, Sewell & Associates gives a “Best Estimate” for gross original oil-in-place for the Mirzaani Field and Mirzaani Northwest Extension of 541.7 million barrels, with a “low”-to-“high” range of 343.8–857.3 million barrels; and “Best Estimate” for gross contingent and unrisked prospective oil resources in the Mirzaani and Mirzaani Northwest Extension areas of 43.8 million barrels, with a “low”-to-“high” range of 20.5–86.1 million barrels. This assessment is consistent with Frontera’s internal estimates. Frontera holds a 100% working interest in the field.
Steve C. Nicandros, Chairman and Chief Executive Officer, commented:
“We are very encouraged with the initial results from frac operations at the Mirzaani #5 well. As production operations continue, we expect that the well will contribute significantly towards reaching our near term production objectives and establish the foundation for continued development operations at the Mirzaani field.”
Shallow Fields Production Unit
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 oil and gas resources. Containing the Mirzaani Field, Mtsare Khevi Field, Nazarlebi Field, and Patara Shiraki Field, these assets represent discovered yet undeveloped or underdeveloped fields that have additional associated exploitation potential. In addition, this unit contains an inventory of look-alike prospects known as the Kakabeti, Lambalo, Mkralihevi, Mlashiskhevi-Oleskhevi and Tsitsmatiani prospects. Each of these prospects contains Soviet-era wells that demonstrated hydrocarbon shows while drilling but were never placed on production or adequately appraised. 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.
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. -Symbol: FRTE. For more information, please visit www.fronteraresources.com. For more information regarding Frontera’s work at the Shallow Fields Production Unit, please visit: www.fronteraresources.com/Operations.php?link_id=43.
2. Information on Resource Estimates: The contingent and prospective resources estimates contained in this announcement were determined by the independent consulting firm of Netherland, Sewell & Associates (NSA) in accordance with the definitions and guidelines set forth in the 2007 Petroleum Resources Management System (PRMS) adopted by the Society of Petroleum Engineers (SPE). Contingent resources are those quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from known accumulations but for which the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies. Contingent resources estimates in this announcement for Mirzaani Field are contingent solely upon demonstration of the economic viability of the project and an approved development program. If this issue is resolved, some portion of the contingent resources may be reclassified as reserves. Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects.
The full report of Netherland, Sewell & Associates is available at www.fronteraresources.com. NSA’s report did not include risked estimates for contingent resources (which is an estimate of commercial risk) or a calculation of net attributable interest to the Company, as provided in AIM’s 2009 Guidance Note for Mining and Oil & Gas Companies. The Company’s net working interest in the Block 12 license is 100 percent
3. This release may contain certain forward-looking statements, including, without limitation, expectations, beliefs, plans and objectives regarding the operations schedule, production rates and other matters discussed in this release. Exploration for oil is a speculative business that involves a high degree of risk. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: risks inherent in oil and gas production operations; availability and performance of needed equipment and personnel; the Company’s ability to raise capital to fund its exploration and development programs; seismic data; evaluation of logs, cores and other data from wells drilled; inherent uncertainty in estimation of oil and gas resources; fluctuations in oil and gas prices; weather conditions; general economic conditions; the political situation in Georgia and relations with neighboring countries; and other factors listed in Frontera’s financial reports, which are available at www.fronteraresources.com/Investors.php?link_id=23. 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.