Frontera Resources Regulatory News (FRR)

18 Sep 2009 07:00



FRONTERA RESOURCES CORPORATION

Houston, Texas, U.S.A. - 18 September 2009

FRONTERA RESOURCES COMPLETES US$7.6 MILLION PLACEMENT 

Frontera Resources Corporation (London Stock Exchange, AIM Market - Symbol: FRR; OTCQX Market, U.S.A. - Symbol: FRTE), an independent oil and gas exploration and production company, today announced that it has completed the placement of shares of common stock (a "Common Share") and warrants referred to in its announcement on September 4, 2009, and increased the size of the financing to approximately US$7.6 million. The resulting net proceeds will be used to fund the company's ongoing oil and gas development programs within its Shallow Fields Production Unit, Block 12, located in the country of Georgia, and for general corporate purposes. 

The Company has issued 45,186,536 units ("Units") each comprised of one Common Share and one Common Share purchase warrant (a "Warrant") at an issue price of 10.3 pence per Unit, for gross proceeds of approximately US$7.6 million (£4.6 million). Each Warrant will entitle the holder to purchase from the Company one Common Share for a period of two years following the transaction closing date at an exercise price of 15 pence per Common Share.

Following this issue, the enlarged issued share capital of the Company will be 120,087,464 Common Shares (excluding 5,739,855 shares held as treasury stock). The new Common Shares will rank pari passu with the existing shares.

Companies or other entities controlled by certain members of the Board of Directors of Frontera have subscribed for 38,854,055 Units as follows:

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1Includes certain warrants to purchase Common Shares at an exercise price of $1.70 per share.

For this reason, the transaction is classified as a related party transaction for the purposes of the AIM rules for companies. Accordingly, as required by the AIM rules for companies, the directors of Frontera (with the exception of Messrs. Nicandros, Bentsen, McGregor and Karnessis, who abstained), having consulted Frontera's nominated adviser, Canaccord Adams, consider that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

The Company's outstanding warrants issued in 2008 exercisable for approximately 3.15 million Common Shares in the aggregate will be adjusted in accordance with their terms following the placement. Those warrants will be adjusted to approximately 6.49 million Common Shares in the aggregate at a price of $1.70 per share.  

The Common Shares comprised in the Units will be admitted to trading on the AIM Market of the London Stock Exchange and dealings will commence at 8.00 a.m. London time on September 18, 2009. No application will be made for admission of the Warrants to the AIM market.

Enquiries:

Frontera Resources Corporation

Liz Williamson 

Vice President, Investor Relations and Corporate Communications 

(713) 585-3216

lwilliamson@fronteraresources.com

Nominated Adviser and Broker: 

Canaccord Adams Limited 

Jeffrey Auld/Ryan Gaffney/Elijah Colby 

+44 20 7050 6500

Notes:

1. The Company: 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's shares are traded on the London Stock Exchange, AIM Market - Symbol: FRR and via the Over-the-Counter Market, U.S.A. - OTCQX Symbol: FRTE. For more information, please visit www.fronteraresources.com.

2.  Forward-Looking Statements: This release may contain certain forward-looking statements, including, without limitation, expectations, beliefs, plans and objectives regarding the offering, potential drilling schedule and well results discussed in this release, as well as reserves, future drilling, development and production. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: future exploration and development activities; availability and performance of needed equipment and personnel; the company's ability to raise capital to fund the planned exploration and development programs; evaluation of seismic data; evaluation of logs, cores and other data from wells drilled; fluctuations in oil and gas prices; adverse weather conditions; general economic conditions; the political situation in Georgia and neighboring countries; and other factors listed in Frontera's financial reports and admission document, which are available on Frontera's website at http://www.fronteraresources.com/Investors.php?link_id=29. 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.