31 Jul 2012 07:00
FRONTERA RESOURCES CORPORATION
("Frontera" or the "Company")
Houston, Texas, U.S.A. - 31 July 2012
BUSINESS UPDATE
Frontera Resources Corporation (London Stock Exchange, AIM Market, FRR), the oil and gas exploration and production company with assets in the country of Georgia, today announces an update:
Georgia Block 12:
- Three rigs and two swabbing units are currently in operation at Mirzaani Field, Mtsare Khevi Field and Taribani Field to maintain and enhance current production levels. In July, daily oil production has averaged approximately 220 bbls per day, including a new daily high for the year of 300 bbls per day.
- Mtsare Khevi Field Gas Sales: Commencement of gas sales from the Mtsare Khevi Gas Complex, which is projected to commence at a rate of 2 million cubic feet per day during Q3, has been delayed from July due to unanticipated delays associated with final issuance of certain requisite permits relating to transportation of the gas from Georgian government authorities. The Company now anticipates that gas sales will commence in September.
- Taribani Field: Preparation is underway at Taribani Field for commencement of a 4 well drilling campaign designed to increase oil production this year. The Company is continuing its negotiations with strategic financing partners with the aim of commencing drilling operations during Q4 2012.
Corporate:
- Corporate Finance: A nominal draw down in the amount of £145,068 ($225,000) on its previously announced $35 million Standby Equity Distribution Agreement ("SEDA") with YA Global Master SPV Ltd. has been made for the purpose of providing the Company with a short term buffer associated with the infrastructure project in advance of impending commencement of the gas sales from the Mtsare Khevi Gas Complex referred to above. The draw down has been undertaken at a price of 0.51660 pence per ordinary share of $0.00004 in the capital of the Company ("Ordinary Shares") in accordance with the terms of the SEDA, and will result in the issue of 28,081,300 new Ordinary Shares ("New Ordinary Shares").
Application has been made for the New Ordinary Shares to be admitted to trading on AIM, which is anticipated to occur on 6 August 2012 ("Admission"). On Admission the New Ordinary Shares will rank pari passu with the Company's existing issued Ordinary Shares.
For the purpose of the Financial Services Authority's Disclosure and Transparency Rules (the "DTRs"), the Company notifies the market that following Admission, the Company's issued share capital will consist of 2,173,559,646 Ordinary Shares, with voting rights. The Company does not hold any Ordinary Shares in treasury.
The above figure of 2,173,559,646 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the DTRs.
Enquiries:
Frontera Resources CorporationLiz WilliamsonVice President, Investor Relations and Corporate Communications(713) 585-3216lwilliamson@fronteraresources.com
Nominated Adviser and Joint Broker:
finnCap Limited
Matt Goode / Chris Raggett
+44 (0) 20 7220 0500
Joint Brokers:
Old Park Lane Capital PlcMichael Parnes / Luca Tenuta+44 (0)20 7493 8188
Cornhill Capital LimitedNick Bealer / Stefan Olivier+44 (0)20 7710 9610
Financial PR:
BuchananTim Thompson / Ben Romney+44 (0)20 7466 5000timt@buchanan.uk.com
Notes to Editors:
About Frontera Resources Corporation
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 currently operates in the country of Georgia 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. For more information, please visit www.fronteraresources.com .
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). The full report, dated July 1, 2010, is available at www.fronteraresources.com . 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 the statements in this announcement.
3. 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.