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 that on October 24, 2008, it had received a favorable ruling in its arbitration with GAC Energy Company and GAC International Holdings Ltd (collectively “GAC”). The arbitrator awarded GAC no damages in its claim against Frontera and Frontera Resources Georgia Corporation, and directed GAC to pay Frontera’s arbitration costs of approximately $85,000. The arbitration was conducted through the International Center for Dispute Resolution of the American Arbitration Association in Houston…
This matter involved a dispute over GAC’s performance under a 2002 farmout agreement for an ownership interest in Frontera’s Block 12 license area in Georgia. Frontera conditionally assigned GAC an interest in Block 12 under the farmout agreement, subject to completion of certain financial and work obligations. However, GAC ultimately defaulted on its obligations prompting a reassignment of its conditional interest in 2004. GAC initiated this arbitration in 2007 contending that it earned a portion of the defaulted interest.
The arbitrator found that GAC failed to complete its obligations under the farmout agreement and rejected GAC’s claims for either an interest in Block 12 or $19 million in restitution. The arbitrator also denied GAC’s claim for a partial ownership interest under the doctrine of “substantial performance.” The arbitration, which is binding on the parties, resolves all claims and counterclaims between Frontera and GAC with respect to the farmout agreement.
Frontera Resources Corporation
Vice President, Investor Relations and Corporate Communications
+44 20 7425 8000
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.