Frontera Resources Regulatory News (FRR)

FRONTERA RESOURCES CORPORATION

Houston, Texas, U.S.A. - 30 September 2014

FRONTERA RESOURCES RELEASES FIRST HALF 2014 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 released financial results for the first half of 2014.

2014 Half Year Results: Highlights

- Revenues from crude oil and gas sales for 2014 totaled $3.3 million.

- Net loss of $5.6 million, or $0.002 per share on a fully diluted basis.

- Gas production operations ongoing at the Mtsare Khevi Gas Complex:

· - As a new competitor in the local gas market, delivery of gas to new customers from the Mtsare Khevi Gas Complex during the months of April through June equaled approximately 10.5 million cubic feet of gas, while production capability was in excess of 3 million cubic feet per day for the same period. From the 1 July 2014 to date, delivery of gas increased to 126 million cubic feet of gas as Frontera's market share developed further. New customer sales and production capability are expected to continue to increase throughout the remainder of this year.

- Frac and workover/stimulation campaign underway at the Taribani Field.

- Plans underway to commence Phase I of the Varang Exploration farmout agreement at the Taribani Field.

- Crude oil production during the first half of 2014 equaled approximately thirty three thousand barrels of oil.

Steve C. Nicandros, Chairman and Chief Executive Officer commented:

"During the first half of 2014 the Company achieved several important value creation milestones associated with our work in the Taribani Field Complex and the Mtsare Khevi Gas Complex. In addition, we have continued to progress our initiatives across the balance of our portfolio. Accordingly, we now expect to see continued increased positive financial impact of this work as we progress through the second half of this year. This is an exciting time for our operations and I look forward to reporting on our continued progress in the weeks and months ahead."

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/Christopher Raggett

+44 (0) 20 7220 0500

Co-Broker

Cornhill Capital LimitedNick Bealer / Stefan Olivier+44 (0) 207 710 9610

Financial PR:

BuchananHelen Chan+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.

Frontera Resources Corporation and Subsidiaries

Condensed Consolidated Financial Statements

Six Months Ended June 30, 2014 and 2013

Frontera Resources Corporation and Subsidiaries

Page(s)

Condensed Consolidated Financial Statements (Unaudited)

Balance Sheets................................................................................................................................. 1

Statements of Comprehensive Loss..................................................................................................... 2

Statement of Stockholders' Deficit....................................................................................................... 3

Statements of Cash Flows.................................................................................................................. 4

Notes to Financial Statements....................................................................................................... 5-13

The accompanying notes are an integral part of these condensed consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated financial statements

The accompanying notes are an integral part of these condensed consolidated financial statements.

Frontera Resources Corporation and Subsidiaries

1. Nature of Operations

Frontera Resources Corporation, a Cayman Islands corporation, and its subsidiaries (collectively "Frontera" or the "Company") are engaged in the development of oil and gas projects in emerging marketplaces. Frontera was founded in 1996 and is headquartered in Houston, Texas. The Company emphasizes development of reserves in known hydrocarbon-bearing basins, and is attracted to projects that have significant exploration upside. Since 2002, the Company has focused substantially all of its efforts on the exploration and development of oilfields within the Republic of Georgia ("Georgia"), a member of the former Soviet Union.

In June 1997, the Company entered into a 25-year production sharing agreement with the Ministry of Fuel and Energy of Georgia and State Company Georgian Oil ("Georgian Oil"), which gives the Company the exclusive right to explore, develop and produce crude oil in a 5,500 square kilometer area in eastern Georgia known as Block 12, hereafter referred to as the "Block 12 PSA". The Block 12 PSA can be extended if commercial production remains viable upon its expiration in June 2022.

Under the terms of the Block 12 PSA, the Company is entitled to conduct exploration and production activities and is entitled to recover its cumulative costs and expenses from the crude oil produced from Block 12. Following recovery of cumulative costs and expenses from Block 12 production, the remaining crude oil sales, referred to as "Profit Oil," are allocated between Georgian Oil and Frontera in the proportion of 51% and 49%, respectively.

Under the terms of the Block 12 PSA, Frontera is exempt from all taxes imposed by the government of Georgia, and any taxes imposed on the Company are paid by Georgian Oil on behalf of the Company from Georgian Oil's 51% share of Profit Oil. Taxes are defined by the Block 12 PSA to mean all levies, duties, payments, fees, taxes or contributions payable to or imposed by any government agency, subdivision, municipal or local authorities within the government of Georgia.

On August 2, 2011, the Company completed a merger with and into a new Cayman Islands exempted company ("Frontera Cayman"), with Frontera Cayman being the surviving entity (the "Merger"). By operation of the Merger, all assets, liabilities, properties, corporate acts, plans, policies, contracts, approvals and authorizations of each of the Company and Frontera Cayman and their respective shareholders, boards of directors, committees elected or appointed thereby, officers and agents, which were effective immediately before the Merger, were vested in, assumed by or taken, as applicable, for all purposes as the acts, plans, policies, contracts, approvals and authorizations of Frontera Cayman and are effective and binding on Frontera Cayman in the same manner as they were with respect to the Company or Frontera Cayman, as the case may be, before the Merger.

Simultaneously with the Merger, Frontera Cayman entered into a Standby Equity Distribution Agreement ("SEDA") with YA Global Master SPV, Ltd. ("YAGM"), pursuant to which YAGM has agreed (subject to certain conditions) to make available a facility (the "SEDA facility") of up to £21.6 million ($35.0 million) in consideration for the issue of Frontera Cayman Shares. As of June 30, 2014, approximately $30.0 million was available to drawdown upon this facility.

Frontera Resources Corporation and Subsidiaries

In April 2014, the Company's wholly-owned subsidiary, Frontera Resources Georgia Corporation, has signed a farmout agreement with Varang Exploration Limited ("Varang Exploration"), a wholly owned subsidiary of a privately held independent natural resources investment group, for the farmout of up to a 50% working interest in Frontera's Taribani Field and Taribani Field Complex, situated within Block 12 in Georgia. In consideration for this transaction, Frontera will receive a carry on its future expenditure on the Taribani Field and the greater Taribani Field Complex of up to approximately US$36 million for the costs associated with a seven well drilling program over three phases. Frontera will continue to act as managing Operator for all planned operations. The Company will retain 100% working interest throughout the balance of its Block 12 holdings.

2. Liquidity and Capital Resources

The following key financial measurements reflect the Company's financial position and capital resources as of June 30, 2014, December 31, 2013, and June 30, 2013 (USD):

Frontera's future revenues depend on operating results from its operations in Georgia. The success of Frontera's operations is subject to various contingencies beyond management control. These contingencies include general and regional economic and political conditions, prices for crude oil, competition and changes in regulation. Frontera is subject to various additional political and economic uncertainties in Georgia which could include restrictions on transfer of funds, import and export duties, quotas and embargoes, domestic and international customs and tariffs, and changing taxation policies, foreign exchange restrictions, political conditions and regulations.

The Company has incurred net losses and negative cash flows from operations in most fiscal periods since inception. Management plans to continue to mitigate costs and raise additional financing to continue to facilitate the Company's 2014 and 2015 operating plan. Commencement of production from its Mtsarekhavi gas field in second quarter of 2014, together with periodic access to the SEDA facility (see discussion in Notes 1 and4) should provide positive cash flows for the foreseeable future.

Notwithstanding management's plan to reduce costs and raise additional financing, the Company's viability is dependent upon producing oil and gas in sufficient quantities and marketing such oil and gas at sufficient prices to provide positive operating cash flow to the Company.

Frontera Resources Corporation and Subsidiaries

The Company is solely responsible for providing all of the funding for the development of Block 12 in Georgia and will require additional funding in order to obtain certain levels of production and generate sufficient cash flows to meet future capital and operating spending requirements. This is dependent upon, among other factors, achieving significant increases in production, production of oil and gas at costs that provide acceptable margins, reasonable levels of taxation from local authorities, and the ability to market the oil and gas produced at or near world prices.

Management's plan for addressing the above uncertainties is partially based on forward looking events which have yet to occur, including the successful completion of its development program, and accordingly, there is no assurance that those events will transpire as initially contemplated.

3. Basis of Presentation and Summary of Significant Accounting Policies

The condensed consolidated balance sheet of the Company at December 31, 2013 was derived from the Company's audited consolidated financial statements as of that date, but does not include all disclosures required by accounting principles generally accepted in the United States of America ("US GAAP"). The condensed consolidated balance sheet at June 30, 2014 and June 30, 2013, the condensed consolidated statements of operations for the six month periods ended June 30, 2014 and 2013, the condensed consolidated statement of changes in stockholders' deficit for the six month period ended June 30, 2014, and the condensed consolidated statements of cash flows for the six month periods ended June 30, 2014 and 2013 were prepared by the Company.

In the opinion of Company management, all adjustments, consisting of normal recurring adjustments, necessary to state fairly the consolidated financial position, results of operations and cash flows were recorded. The results of operations for the six month period ended June 30, 2014 are not necessarily indicative of the operating results for a full year or of future operations.

Certain information and footnote disclosures normally included in financial statements presented in accordance with US GAAP have been condensed or omitted. The accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company's consolidated financial statements for the year ended December 31, 2013.

For a description of the Company's accounting policies, refer to Note 3 of the Company's 2013 consolidated financial statements.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent asset and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Frontera Resources Corporation and Subsidiaries

Estimates of oil and natural gas reserves and their values, future production rates and future costs and expenses are inherently uncertain for numerous reasons, including many factors beyond the Company's control. Reservoir engineering is a subjective process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact manner. The accuracy of

any reserve estimate is a function of the quality of data available and of engineering and geological interpretation and judgment. In addition, estimates of reserves may be revised based on actual production, results of subsequent exploitation and development activities, prevailing commodity prices, operating costs and other factors. These revisions may be material and could materially affect the Company's future depletion, depreciation and amortization expenses.

The Company's revenue, profitability, and future growth are substantially dependent upon the prevailing and future prices for oil and natural gas, which are dependent upon numerous factors beyond its control such as economic, regulatory developments and competition from other energy sources. The energy markets have historically been volatile and there can be no assurance that oil and natural gas prices will not be subject to wide fluctuations in the future. A substantial or extended decline in oil and natural gas prices could have a material adverse effect on the

Company's financial position, results of operations, cash flows and quantities of oil and natural gas reserves that may be economically produced.

Impairment

Under the full cost method of accounting, the net book value of natural gas and crude oil properties may not exceed a calculated "ceiling." The ceiling limitation is the discounted estimated future net revenue from proved natural gas and crude oil properties plus the cost of properties not subject to amortization. In calculating future net revenues, costs used are those as of the end of the appropriate period. The prices used are the unweighted average first-day-of-the-month commodity prices for the prior twelve months. These prices are not changed except where different prices are fixed and determinable from applicable contracts for the remaining term of those contracts.

The net book value is compared to the ceiling limitation on both a quarterly and annual basis. Any excess of the net book value is written off as impairment expense. Impairment expense recorded in one period may not be reversed in a subsequent period even though higher natural gas and crude oil prices may have increased the ceiling limitation in the subsequent period. As the full cost ceiling exceeded the net capitalized costs at June 30, 2014, December 31, 2013 and June 30, 2013, there was no such reduction of the Company's carrying value of its natural gas and crude oil properties during the six month periods ended June 30, 2014 and 2013.

Fair Value Measurements

The Company's financial instruments consist primarily of cash and cash equivalents, trade receivables, trade payables, long-term debt and derivative stock warrant liabilities. Management considers the carrying values of cash and cash equivalents, trade receivables and trade payables to be representative of their respective fair values. As such, the measurement was categorized as a Level 3 measurement per the fair value hierarchy. Additionally, the derivative warrant liabilities are recorded at fair value in the accompanying balance sheets.

Frontera Resources Corporation and Subsidiaries

The authoritative guidance related to fair value defines a hierarchy of inputs to valuation techniques based upon whether those inputs reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs). The Company performed an analysis on its derivative warrant liabilities as of the balance sheet date. The fair value of the combined derivative stock warrant liabilities on June 30, 2014 was nil, within Level 2 of the fair value hierarchy. Refer to the fair value of debt disclosed in Note 4. The Company does not have any assets or liabilities classified within Level 3 of the fair value hierarchy.

4. Debt

Debt consists of the following:

Related Party Notes Payable

On January 11, 2011, a revolving credit facility ("Credit Facility") was put in place by and between the Company, Steve C. Nicandros, a Director of the Company, and Zaza Mamulaishvili, member of the Company's senior management team (together, the "Lenders") in the amount of $2,000,000. The $2,000,000 borrowing limit pursuant to the Credit Facility was removed on October 30, 2012. Accordingly, during 2014 and 2013, the Company entered into a series of further notes payable governed by this Credit Facility with the Lenders in the aggregate amounts of $2.1 million and $5.2 million, respectively. These notes have a one-year term, bear interest of 15%, and are classified within Related Party Notes Payable on the consolidated Balance Sheet. As of June 30, 2014, the fair value of the related party notes was approximately $9.5 million.

The further draw-downs under the Credit Facility as noted above, constitute related party transactions pursuant to the AIM Rules for Companies as the Lenders are directors or applicable employees of the Company, as the case may be. The independent directors of the Company, being all the directors excluding Steve Nicandros, consider, having consulted with finnCap, the Company's nominated adviser, that the further draw downs pursuant to the credit facility as detailed above, are fair and reasonable insofar as the Company's shareholders are concerned.

Convertible Notes Payable

During May 2007, the Company raised approximately $67.0 million through a private placement of convertible unsecured notes due May 2012 ("2012 Notes"). The 2012 Notes were issued at par and bear interest at 10% per annum, payable quarterly in arrears in cash or in kind at the Company's discretion. The 2012 Notes are convertible into shares of common stock at conversion price of $1.67 per share. The 2012 Notes will be automatically converted into common stock at the conversion price if the stock price exceeds two times the conversion price for at least 20 consecutive trading days. On August 2, 2011, 85.1% of the 2012 Notes were converted into common stock and another 14.6% were exchanged for the 2016 Notes (as defined below) and the remaining portion was subsequently repaid.

On July 3, 2008, the Company raised $23.5 million through a private placement of convertible unsecured notes due July 2013 ("2013 Notes"). The notes were issued at par and bear interest at 10% per annum, payable quarterly in arrears in cash or in kind at the Company's discretion. The notes are convertible into common stock at a conversion price of $1.71 per share. On August 2, 2011 84.0% of the 2013 Notes were converted into common stock and another 16.0% were exchanged for the 2016 Notes (as defined below).

Frontera Resources Corporation and Subsidiaries

On August 2, 2011, note holders exchanged $18.2 million of 2012 and 2013 Notes into new notes issued under the 2016 Note Purchase Agreement due 2016 ("2016 Notes"). The 2016 Notes accrue interest at the rate of 10% per annum, mature five years from the date of issuance and are convertible into Frontera Cayman Shares, at the option of the holder, at a conversion rate of $0.25 per share.

During the six month periods ended June 30, 2014 and 2013, the Company elected to pay the quarterly interest payments in kind and issued approximately $1.2 million and $1.1 million, respectively, in additional convertible notes in accordance with terms of the note purchase agreements.

Other Notes Payable

On June 28, 2011 the Company entered into the SEDA facility with YA Global Master SPV Ltd, an investment fund managed by Yorkville Advisors LLC providing for up to approximately £21.6 million (US$35 million) of additional equity investment, through the issue of the new shares in the Company. As of June 30, 2014 approximately $30 million of commitment amount was still available for drawdown. The term of the agreement is through December 31, 2015.

The Company drew down from their SEDA-backed loan agreements with YA Global Master SPV Ltd. Under these drawdowns, $2.0 million and $2.2 million remained outstanding as of June 30, 2014 and 2013, respectively. As of June 30, 2014, the carrying value of the other notes payable approximates fair value. The outstanding amount has the ability to be settled in cash or issuance of new shares. Future principal maturities as of June 30, 2014 for debt obligations are, as follows for the periods ending December 31:

 5. Derivative Stock Warrant Liabilities

In July 2008, the Company solicited consents from holders of its 10% convertible notes due May 2012 to amend the note purchase agreements governing such notes to permit the issuance of the new notes and to release escrowed proceeds of $5.0 million from the May 2007 private placement. In connection with the solicitation, each consenting holder received a warrant exercisable into shares of common stock in an amount equal to 7.5% of the number of shares of common stock into which such consenting holder's existing notes were convertible. The warrants are exercisable for 3,151,000 shares in the aggregate. Each warrant entitled the holder to purchase one share of common stock at a price of $3.50 per share. Due to anti-dilution provisions contained in the warrant agreements, as of June 30, 2013 the warrants became exercisable into 77,557,078 shares in the aggregate at an exercise price of £0.089 per share. The warrants have a five-year term and include a cashless exercise provision along with other customary terms and provisions. The issuance date fair value of these warrants was estimated to be $0.9 million and was recorded as a derivative stock warrant liability. The warrants were valued on the issuance date using the following

Frontera Resources Corporation and Subsidiaries

assumptions: risk-free interest rate of 3.42%, expected volatility of 146.3%, no expected dividend yield and a term of 5 years. All of these warrants expired on July 3, 2013.

On February 8, 2011 the Company issued a warrant instrument entitling Arbuthnot, broker of Company, to purchase 500,000 Shares of Common Stock at an exercise price of £0.06 per share. These warrants expired on February 8, 2013.

On August 2, 2011 as part of the fees and commissions payable to Arbuthnot, OPL and Strand Hanson for their respective roles in the Placing, Company has issued 12,558,307 warrants with an exercise price of £0.04 per share with terms ranging from 2 to 3 years. Of these warrants, 11,870,807 expired on August 2, 2013 and 687,500 expire on August 2, 2014.

Under the terms of SEDA-backed loan agreement in respect of Initial Advance in January 2012 Yorkville had been granted 15,000,000 warrants exercisable within 2 years with an exercise price of £0.018 per share. These warrants expired on January 31, 2014.

The change in the aggregate fair value of the warrants resulted in derivative expense of $0.00 million and $0.01 million for the six months ended June 30, 2014 and 2013, respectively.

6. Commitments and Contingencies

ARAR Arbitration

In January 2008, Frontera Eastern Georgia Limited ("FEGL") served a notice of arbitration and claim on ARAR, Inc. ("ARAR"), for breach of contract under a drilling services contract dated May 2007, specifically for, among other things, failure to commence work by the time specified in the contract, failure of the drilling rig to meet required specifications and failure to reconcile advance payments made by FEGL with work actually performed. FEGL terminated the contract after ARAR failed to mobilize the rig to the required location and failed to commence work as otherwise required under the contract. FEGL claimed damages of approximately $7.0 million in the arbitration. ARAR denied FEGL's claims and filed counterclaims against FEGL, seeking payments of approximately $7.1 million for, among other things, standby charges for the period of time the rig was undergoing inspection and repairs to bring it into contract specification, early termination fees and demobilization fees. The parties entered into a settlement agreement in December 2008 pursuant to which ARAR was required to make a series of payments to FEGL through December 2009 in the aggregate amount of $1.25 million. The settlement resolved all outstanding claims and counterclaims between Frontera and ARAR arising out of the drilling services contract. Beginning in August 2009, ARAR defaulted on its monthly payments and remained in default on payments due August - December 2009. FEGL applied to the arbitration panel for entry of an agreed award pursuant to the settlement agreement. The panel held a hearing on FEGL's application in March 2010, and in April 2010 entered a final, binding award in the amount of $1.43 million in favor of FEGL ("Final Award").

In April 2010, FEGL filed an action in the U.S. District Court for the Southern District of Texas ("District Court") seeking confirmation of the Final Award pursuant to the Convention on Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958 as a precursor to further enforcement action in the U.S. In May 2010, ARAR filed a counterclaim in the District Court seeking to deny confirmation and to vacate the Final Award. On August 15, 2011, the District

Frontera Resources Corporation and Subsidiaries

Court entered final judgment ("Final Judgment") confirming the Final Award and granting FEGL total amount of $1,552,707.01, which include total amount of the Final Award and FEGL's attorney's fees and expenses. On September 13, 2011, ARAR appealed the Final Judgment with the United States Court of Appeals for the Fifth Circuit ("Court of Appeals"). On July 16, 2012, Court of Appeals dismissed ARAR's appeal and affirmed District Court's Judgment in its entirety. ARAR attempted to further appeal Court of Appeal's decision via "motion for rehearing"; on August 16, 2012, Court of Appeals denied ARAR's motion and affirmed its earlier decision.

In order to enforce the Final Award against assets of ARAR located in Turkey, in July 2010 FEGL filed an enforcement action in the 4th Commercial Court in Ankara, Turkey. 4th Commercial Court conducted a series of hearings on the enforcement action, and by its order dated November 23, 2012, rejected FEGL's request for enforcement. FEGL filed its appeal of the court order with the appeals court in Ankara on June 7, 2013, and expects that the appeals court will reverse the lower court order. Appeals court's decision is expected sometime during the third quarter of 2013. In parallel, in July 2010 an affiliate of ARAR filed a lawsuit against FEGL in the 7th Commercial Court in Ankara, Turkey claiming damages of $0.3 million in connection with the exportation of the drilling rig from Georgia. On July 5, 2012, 7th Commercial Court dismissed ARAR's lawsuit in its entirety.

In parallel to the enforcement action in Turkey, on January 13, 2012, FEGL filed a petition in the High Court of Justice, Queens Bench Division, in London, UK ("London High Court"), seeking enforcement of the Final Award in the UK against the defendants' assets located in the UK. Additionally, FELG sought an injunction prohibiting the defendants to dispose of any assets in the UK while the enforcement action is pending. On January 31, 2012, the London High Court entered an order granting FEGL's both petition for enforcement and motion for injunction. Defendants vigorously contested the court order and filed a response requesting to vacate it. On January 23, 2013, the London High Court issued its Final Charging Order affirming its earlier decision and dismissing defendants' contentions.

The Company has not recognized a receivable as of June 30, 2014 for these ongoing proceedings.

7. Subsequent Events

Events occurring after June 30, 2014 were evaluated through September 23, 2014, the date these financial statements were available to be issued, to ensure that any subsequent events meeting the criteria for recognition ordisclosure were included.

In July 2014, the Company successfully completed an equity fund raising initiative of GBP 350,000. The funds have been raised through a subscription by Shard Capital Partners, LLP of 48,611,111 new ordinary shares of GBP 0.72 each in the Company.