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29 Oct 2008 07:00
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FRONTERAΒ RESOURCES CORPORATION
Houston,Β Texas,Β U.S.A.Β -Β OctoberΒ 29, 2008
FRONTERAΒ RESOURCESΒ REPORTS FAVORABLE DECISION IN GAC ARBITRATIONΒ
Frontera Resources Corporation (London Stock Exchange, AIM Market - Symbol: FRR; OTCQX Market, U.S.A. - Symbol: FRTE),Β an independent oil and gas exploration and production company,Β todayΒ announced thatΒ on October 24, 2008,Β it had received a favorable ruling in its arbitration withΒ GAC Energy Company and GAC International Holdings Ltd (collectively "GAC"). The arbitrator awarded GAC no damages in its claimΒ againstΒ Frontera andΒ FronteraΒ Resources Georgia Corporation, and directed GAC to pay Frontera's arbitration costs of approximately $85,000. The arbitration was conducted throughΒ theΒ InternationalΒ CenterΒ for Dispute ResolutionΒ of the American Arbitration Association inΒ Houston.
This matter involved a dispute over GAC's performanceΒ underΒ aΒ 2002Β farmout agreement for an ownership interest in Frontera's Block 12 license areaΒ inΒ Georgia. Frontera conditionally assigned GAC an interest in Block 12 underΒ the farmoutΒ agreement, subject to completion of certain financial and work obligations. However, GAC ultimately defaulted on its obligations prompting a reassignment of its conditional interest in 2004. GAC initiatedΒ this arbitrationΒ in 2007 contending that it earned a portion of the defaulted interest.
The arbitrator found that GAC failed to complete its obligations under theΒ farmoutΒ agreementΒ and rejected GAC's claims for either anΒ interest in Block 12 or $19 million in restitution. The arbitrator alsoΒ denied GAC'sΒ claimΒ for a partial ownership interest under the doctrine of "substantial performance."Β The arbitration, which is binding on the parties,Β resolves all claimsΒ and counterclaimsΒ between Frontera andΒ GACΒ with respect to theΒ farmout agreement.
Enquiries:
Frontera Resources Corporation Liz Williamson Vice President, Investor Relations and Corporate CommunicationsΒ (713) 585-3216lwilliamson@fronteraresources.comΒ
Nominated Advisor:
Morgan StanleyJon Bathard-Smith +44 20 7425 8000
Notes to Editors:
1.Β Frontera Resources Corporation is an independent Houston, Texas,Β 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 has operated inΒ GeorgiaΒ since 1997 where it holds a 100 percent working interest in a production sharing agreement with the government ofΒ Georgia. This gives Frontera the exclusive right to explore for, develop and produce oil and gas from a 5,060 square kilometer area in easternΒ GeorgiaΒ known as Block 12. For more information about Frontera Resources, please seeΒ www.fronteraresources.com.Β
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