FRONTERA RESOURCES CORPORATION
Houston, Texas, U.S.A. – 30 September 2016
FRONTERA RESOURCES RELEASES FIRST HALF 2016 FINANCIAL RESULTS
Frontera Resources Corporation (London Stock Exchange, AIM Market – Symbol: FRR), an independent oil and gas exploration and production company (“Frontera” or the “Company”), today releases its financial results for the first half of 2016.
– Revenues from exploration pilot oil and gas production sales totaled $2.0 million.
– Ongoing exploration efforts resulted in a net loss of $10.9 million, or $0.003 per share on a fully diluted basis. Of this total, approximately $1.1 million is reflected in one-time charges associated with recorded impairment and inventory related accounting due to significant decrease of crude oil prices.
During the first half of 2016, the Company continued to invest in its focused exploration work programs in the country of Georgia amidst a depressed commodity price environment. Ongoing technical study of results from workover, drilling, and stimulation completion programs associated with its ongoing Oil Window and Gas Window operations at its South Kakheti Gas Complex provided the basis for design and implementation of an accelerated and more technically advanced work program over the remainder of this year and next year. This planned program, as outlined in the Company’s Circular to shareholders provided on 10 June 2016, is currently underway and is expected to result in increased revenue from exploration related pilot production programs for oil and gas.
Ongoing work programs have this year resulted in important new technical milestones that have been achieved in frac operations with application of demonstrated stimulation methodology that has improved overall hydrocarbon recovery. As the Company continues to implement techniques that have been applied in similar zones across North America, it continues to evolve completion designs in order to maximize production rates and cumulative volumes. As announced on September 26, 2016, well preparation, site construction and associated materials procurement are in process for the next six well campaign that is planned to commence in October.
Political challenges in Georgia’s domestic gas market continue to delay related gas-focused investment and production due to the Ministry of Energy’s discouragement of ongoing exploration of domestic natural gas resources in favor of preserving existing gas import monopolies. This continues to maintain a hold on previously announced expectations to achieve daily gas production in excess of 7 million cubic feet per day from existing exploration pilot production operations. As efforts are ongoing to address the Ministry’s opposition to this work, we are hopeful that it will ultimately see the benefit of allowing for a free and competitive market for U.S. and foreign investment in its domestic natural gas sector.
Steve C. Nicandros, Chairman and Chief Executive Officer commented:
“Frontera’s exploration investments since the beginning of this year continue to demonstrate our commitment to the methodical technical progress that our work has achieved to date. Because of the significant oil and gas resources that our historical investments have identified, our focused efforts to evolve stimulation completion designs are now yielding results that have never before been achieved. As we continue our planned work programs through the remainder of this year, we strongly believe that our operations are reaching new milestones that will result in bringing the giant oil and gas resources associated with Block 12 into increased, sustainable production levels.”
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
Frontera Resources Corporation
Cairn Financial Advisers LLP
61 Cheapside, London EC2V 6AX
Jo Turner / Liam Murray
+44 (0) 20 7148 7900
Cornhill Capital Limited
+44 (0) 207 710 9610
+44 (0) 20 7466 5000
Notes to Editors:
About Frontera Resources Corporation
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 in Eastern Europe around the Black Sea. Frontera Resources Corporation shares are traded on the London Stock Exchange, AIM Market – Symbol: FRR. For more information, please visit www.fronteraresources.com.
1. Information on Resource Estimates: The independent 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). Internal resources estimates were determined by the Company. Gerard Bono, Frontera’s Vice President and Chief Reservoir Engineer, who is a member of the SPE, is the qualified person who reviewed and approved both independent and internal estimates in this announcement.
2. This release may contain certain forward-looking statements, including, without limitation, expectations, beliefs, plans and objectives regarding the transactions, work programs 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. 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.
3. Glossary of Terms: BCF – means Billion Cubic Feet of gas. TCF – means Trillion Cubic Feet of gas. Mcf – means Thousand Cubic Feet of gas. OOIP – means Original Oil in Place. Bopd – means Barrels of Oil Per Day.