Frontera Resources Regulatory News (FRR)

FRONTERA RESOURCES CORPORATION

Houston, Texas, U.S.A. - 29 September 2015

HALF YEARLY REPORT

FRONTERA RESOURCES RELEASES FIRST HALF 2015 RESULTS,

ANNOUNCES OPERATIONS UPDATE AND

UPGRADES GAS POTENTIAL IN GEORGIA OPERATIONS

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 2015 and provided an operations update, including announcement of a significant upgrade to gas resources associated with its holdings in the country of Georgia.

Highlights

- Revenues from crude oil and gas sales totaled $3.2 million

- Net loss of $7.2 million, or $0.002 per share on a fully diluted basis.

- Mtsare Khevi Gas Complex: Drilling and workover operations continue in accordance with previously announced 8 well drilling program and 18 well workover program for the remainder of this year. This program is designed to continue to add new gas production as well as access gas production from extensive unperforated/behind-pipe gas-bearing intervals in existing wells. Together with ongoing well operations, expansion of existing processing facilities is underway and it anticipated that these operations will bring daily gas production in excess of 7 million cubic feet per day by the end of this year.

- Taribani Field Complex: Operations continue at the Niko#1 location under Phase I of the Varang Exploration farmout agreement at the Taribani Field. Preparations are currently underway to test and produce the first of several oil-bearing zones associated with this well. Associated with this operation, Varang Exploration recently completed its own independent assessment of the oil and gas reserves associated with the Niko#1 well and provided these results to Frontera. Conducted by the U.S.-based firm Ryder Scott, this assessment has estimated the well to contain 209,681 bbls of oil/condensate and 223 mmcf of Proved Undeveloped reserves; 483,554 bbls of oil/condensate and 197 mmcf of Probable Undeveloped reserves, and; 1,143,599 bbls of oil/condensate and 1,146 mmcf of Possible Undeveloped reserves.

In addition, during the first half of this year, an eight well campaign re-entry frac/re-completion campaign commenced within the field and is currently ongoing. This campaign is targeting Zones 9, 14 and 15 and is designed to also enhance oil production from the Taribani Field.

- Gas Resources/South Kakheti Gas Complex: Earlier this year, Frontera announced results of a report it commissioned by the independent consulting firm of Netherland, Sewell & Associates that confirmed combined prospective natural gas resources of as much as 12.9 trillion cubic feet (365 billion cubic meters) of gas-in-place, with as much as 9.4 trillion cubic feet (266 billion cubic meters) of recoverable prospective natural gas resources at the Mtsare Khevi Gas Complex and Taribani Field Complex.

Following on from this assessment, extensive geologic and geophysical studies have continued within and between the Mtsare Khevi Gas Complex and the Taribani Field Complex areas as the Company believes that these individual areas are geologically interconnected. As a result, during the first half of 2015, these studies have confirmed an extensive integrated gas resource potential much larger than previously identified. Because of this, Frontera has combined the technical focus of its Mtsare Kheve Gas Complex and Taribani Field Complex into one integrated geologic unit called the South Kakheti Gas Complex. In addition to gas resources previously identified for subsets of this combined area of approximately 2,000 square kilometers, Frontera's recently concluded studies estimate as much as 135 trillion cubic feet (3.8 trillion cubic meters) of gas in place from reservoir targets found between 300 metres and 5,000 metres in depth. An independent assessment of Frontera's new internal estimates will now commence during the fourth quarter of 2015.

Additionally, Frontera's work at the South Kakheti Gas Complex includes the integration of ongoing studies related to the extensive Maykop shales situated predominantly throughout its boundaries. Significant unconventional reservoir potential is believed to be associated with these shales and ongoing analysis will further quantify and define the additional prospectivity related to these targets.

- Greater Black Sea Strategy: Following the Company's announcement in July related to a strategic Memorandum of Understanding that was signed with Ukraine's national energy company, National Joint Stock Company Naftogaz of Ukraine, Frontera has continued to advance its objectives under this agreement. Studies related to the evaluation of upstream exploration and production projects in Ukraine have resulted in commencement of efforts to acquire specific licence areas. In addition, an engineering study continues with Naftogaz related to the possibility of bringing liquefied natural gas (LNG) to Ukraine from Frontera's ongoing gas work in Georgia.

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

"During the first half of 2015 our ongoing investments in Georgia have continued to reveal the emergence of what we believe to be a world class gas play with the identification of the South Kakheti Gas Complex. Much like the recent evolution of prolific gas plays in the United States that have transformed the U.S.A.'s energy independence trajectory, our results continue to indicate that Georgia has the natural gas resources to follow a similar path. We believe that our ongoing work will further serve to establish Georgia's domestic energy independence in the years to come and also make it a strategic supplier of gas to Europe's nearby consumption markets."

Enquiries:

Frontera Resources Corporation:Liz WilliamsonVice President, Investor Relations and Corporate Communications+1 713 585 3216lwilliamson@fronteraresources.com

Nominated Adviser:Cairn Financial Advisers LLP61 Cheapside, London EC2V 6AXAvi Robinson / Jo Turner+44 (0) 20 7148 7900

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

Financial PR:BuchananHelen Chan+44 (0) 20 7466 5000helenc@buchanan.uk.com

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.

2. The Mtsare Khevi Gas Complex is an area of approximately 140 square kilometers and encompasses gas reservoir targets found between 300 meters and 5,000 meters in depth. Based on Frontera's internal estimates, analysis has revealed significant gas potential throughout this area of up to approximately 11 TCF of gas-in-place and up to approximately 9 TCF of recoverable gas resources. An April 2015 report by the independent consulting firm of Netherland, Sewell & Associates confirms prospective resources of as much as 8.29 TCF of gas-in-place for the Mtsare Khevi Gas Complex, with as much as 6.15 TCF of recoverable prospective resources. 

3. The Taribani Field Complex is an area that encompasses approximately 1,400 square kilometers and includes the discovered yet undeveloped Taribani, Kila Kupra, Bayda and Iori fields within Block 12. Internal preliminary analysis suggests that there could be as much as 18 billion barrels of oil in place throughout this complex. Ongoing work continues to study and assess the viability of this analysis and larger scale development potential. Situated within the Taribani Field Complex, the Taribani Field's oil potential consists of 788 million barrels of original oil in place ("OOIP") at depths between 2,000 meters and 3,300 meters, independently assessed by Netherland, Sewell & Associates ("NSA") in 2005. In addition, Frontera estimates gas-in-place resources associated with deeper horizons at the Taribani Field to be as much as approximately 9 tcf from reservoir targets found between 3,400 meters and 5,000 meters in depth. An April 2015 report by NSA confirms prospective resources of as much as 4.62 TCF of gas-in-place associated with deeper gas bearing sands at the Taribani Field, with as much as 3.23 TCF of recoverable prospective resources from horizons situated between 3,400 meters and 5,400 meters in depth. 

4. 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). 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.

5. 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.

6. 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.

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 Houston, Texas based 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").

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, 2015, approximately $28.8 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, 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, 2015, December 31, 2014, and June 30, 2014 (USD):

Frontera's future revenues depend on operating results from its operations in Georgia. The success of Frontera's operations is subject to various risk factors beyond management control. These risk factors 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 and equity raises to continue to facilitate the Company's 2015 and 2016 operating plan.

Notwithstanding management's plan to reduce costs and raise additional financing or equity, 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. Commencement of production from its Mtsarekhavi gas field in second quarter of 2014, participation of farm-in partner in Taribani, together with periodic access to the SEDA facility (see discussion in Notes 1 and 4) should provide positive cash flows for the foreseeable future.

Frontera Resources Corporation and Subsidiaries

The Company is solely responsible 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, 2014 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, 2015 and June 30, 2014, the condensed consolidated statements of operations for the six month periods ended June 30, 2015 and 2014, the condensed consolidated statement of changes in stockholders' deficit for the six month period ended June 30, 2015, and the condensed consolidated statements of cash flows for the six month periods ended June 30, 2015 and 2014 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, 2015 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, 2014.

For a description of the Company's accounting policies, refer to Note 3 of the Company's 2014 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, 2015, December 31, 2014 and June 30, 2014, 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, 2015 and 2014.

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 1 measurement per the fair value hierarchy. Additionally, the derivative warrant liabilities are recorded at fair value in the accompanying balance sheets.

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, 2015 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 2015 and 2014, the Company entered into a series of further notes payable governed by this Credit Facility with the Lenders in the aggregate amounts of $1.2 million and $2.1 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, 2015, 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 at that time, 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.

Frontera Resources Corporation and Subsidiaries

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).

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, 2015 and 2014, the Company elected to pay the quarterly interest payments in kind and issued approximately $1.3 million and $1.2 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, 2015 approximately $28.8 million of commitment amount was still available for drawdown. The term of the agreement is through December 31, 2018.

The Company drew down from their SEDA-backed loan agreements with YA Global Master SPV Ltd. Under these drawdowns, $3.2 million and $2.0 million remained outstanding as of June 30, 2015 and 2014, respectively. As of June 30, 2015, 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.

Frontera Resources Corporation and Subsidiaries

Future principal maturities as of June 30, 2015 for debt obligations are, as follows for the periods ending December 31:

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 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 November 2012, ARAR attempted again to challenge Court of Appeals' decision of August 16, 2012, before the Supreme Court of the United States, which denied ARAR's petition for a writ of certiorari on January 7, 2013.

Frontera Resources Corporation and Subsidiaries

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. On June 20, 2014, FEGL was notified that the appeals court granted FEGL's appeal and overturned the 4th Commercial Court's decision. The case was subsequently sent back to the 4th Commercial Court in order to adopt a new decision in line with the appeals court's instructions. .

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. ARAR appealed the 14th Commercial Court's decision with the appeals court in Ankara. On June 23, 2014, FEGL was notified that, upon review of the appeal, the appeals court in Ankara dismissed ARAR's appeal in its entirety and affirmed the 14th Commercial Court's earlier decision in FEGL's favor. Subsequently, on July 15, 2014, ARAR applied to the appeals court in Ankara and requested the revision and correction of the previous decision. The case is pending at the appeals court.

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, 2015 for these ongoing proceedings.

7. Subsequent Events

Events occurring after June 30, 2015 were evaluated through September 24, 2015, the date these financial statements were available to be issued, to ensure that any subsequent events meeting the criteria for recognition or disclosure were included.