Houston, Texas, U.S.A. – 14 January 2016
FRONTERA RESOURCES CORPORATION
SOUTH KAKHETI GAS COMPLEX OPERATIONS UPDATE
Frontera Resources Corporation (AIM: FRR), an independent oil and gas exploration and production company (“Frontera” or the “Company”), is pleased to announce an operations update for its work in the South Kakheti Gas Complex, situated within its portfolio in the country of Georgia.
Last year, Frontera announced that its historical work had resulted in the identification of an extensive integrated 2,000 square kilometer geologic unit called the South Kakheti Gas Complex (“Complex”). Within the Complex, hydrocarbon generation has resulted in a gas component (“Gas Window”) as well as an oil or liquids component (“Oil Window”). Studies are ongoing to further define these integrated components with an objective of better understanding how to most efficiently exploit the greater Complex over time.
Gas Window Initiative – As reported on 23 December 2015, operations continue associated within the western area of the Complex where work is ongoing to continue to explore, test and add new gas production from reservoirs situated between 300 metres and 5,000 metres in depth. Due to heavy snow during the past three weeks and the need to unexpectedly repair the existing wellhead as a result of high bottom hole pressures and resulting high shut-in surface pressures, operations at the Udabno#2 well remain at a depth of approximately 3,300 meters. In parallel, the Company has completed a gas testing program design with the assistance of Weatherford International (NYSE: WFT). The testing program is designed to evaluate an extensive gas-bearing interval of approximately 2,000 meters in gross thickness. Frontera’s internal reservoir engineering models estimate production capability in the range of 10 million – 20 million cubic feet per day of gas once Udabno#2 is completed during the first quarter of 2016.
As reported in December, Frontera’s ongoing work had assessed the gas resources associated with its ongoing exploration and production efforts at the South Kakheti Gas Complex to contain as much as 187 trillion cubic feet (5.31 trillion cubic meters) of gas in place from reservoir targets found between 300 metres and 5,000 metres in depth. In 2015, Frontera announced results of reports that it commissioned by the U.S.-based consulting firm of Netherland, Sewell & Associates in order to provide independent assessment of the company’s estimates
Oil Window Initiative – Within the central portion of the Complex, operations have continued at the Niko#1 well. Since December, preparation and mobilisation for fracing operations have been underway and Frontera now expects to frac this well as part of a three well campaign commencing in February 2016. Production testing at the Niko#1 well recently resulted in a new technical discovery that has revealed better than anticipated reservoir parameters associated with this portion of the Complex. Frontera expects upcoming frac-completion operations to potentially yield an initial production rate of approximately 1,000 bbls of oil per day for the Niko#1 well. In addition, two other related wells are expected to be completed in order to build on the new results observed from recent operations at the Niko#1 well.
As previously announced, Frontera’s “stack and frac” completion plan is expected to exploit approximately 690 million bbls of original oil in place associated with Netherland, Sewell & Associate’s assessment of 788 million bbls of oil in place related to the area of current Oil Window operations at the Complex.
Steve C. Nicandros, Chairman and Chief Executive Officer, commented:
“As we begin 2016, our pending Gas Window and Oil Window operations at the Udabno#2 well and the Niko#1 well represent significant value additions related to our ongoing work. Thanks to our historically persistent and focused technical effort associated with this important asset, Frontera is now able to advance early in 2016 to continue to unlock the giant oil and gas potential that is contained within the South Kakheti Gas Complex.”
Frontera Resources Corporation
Vice President, Investor Relations and Corporate Communications
+1 713 585 3216
Cairn Financial Advisers LLP
61 Cheapside, London EC2V 6AX
Avi Robinson / Jo Turner
+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