Whi29 Jun 2018 13:42
WHIreland note on Frontera Resources (FRR) - Annual Results - 29.06.18
Market Cap £56m
Share Price 0.36p
Frontera’s annual results are innocuous, in our opinion, with revenue in the period from crude oil and gas sales amounting to $2.6m. The modest / negligible cash balance at 31 December 2017, should, in our opinion be considered in conjunction with the elimination of $32m of debt in 2017. The company has since raised £2.5m of equity to fund drilling at Taribani and secured additional third party funding for an additional (fourth) Taribani well.
The company’s is currently progressing drilling/testing at its Taribani oilfield, which we expect will have determinant / transformational implications for Frontera.
The annual results broadly indicate that Frontera has successfully undertaken a considerable balance sheet clean-up, which, in our opinion, sets a much improved backdrop to build on potentially positive forthcoming operational developments.
Operationally, the company indicated that it has drilled the T-39 deeper than we had anticipated into the Eldari B formation (Zone 19). The company anticipates testing T-39 productive potential in Zones 9, 14 and 15 (Eldari A) in addition to Zone 19 (Eldari B). The well has been successfully cased to total depth. Well testing is expected to commence 1 July 2018 according to the company.