17 Mar 2009 07:29
Frontera Resources Continues Development Drilling at the Mtsare Khevi Field in Georgia HOUSTON, TX--(Marketwire - March 17, 2009) - 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 the continuation of its development drilling program at the Mtsare Khevi Field within its Shallow Fields Production Unit, Block 12, in the country of Georgia. Following a brief pause in development drilling operations at the end of last year in order to observe and study results from the thirteen wells that had been drilled through December, the Mtsare Khevi #27 development well was recently drilled and completed and is currently being placed into production. This well is part of an ongoing program designed to continue to increase production and expand development drilling into the northwestern portion of the Mtsare Khevi Field's structure. Results from wells drilled in this portion of the field have yielded the best sustainable daily production rates from the historical drilling campaign to date, averaging 30-40 barrels per day per well from one of three objective horizons. Since development drilling operations commenced in August 2008, drilling operations have targeted three reservoir objectives within the Upper Pliocene age Akchagil formation as part of a rolling development program. All 14 wells drilled to date have reached total measured depths of approximately 355 meters (1,170 feet) and each has encountered multiple hydrocarbon bearing zones situated between 200 and 315 meters in depth. Well log analysis continues to indicate approximately 20-30 meters of gross pay in each well. Since the start of the development drilling campaign, nine wells have been categorized as oil wells with initial rates from single horizons as high as 40 barrels per day of 21 to 28 degree API oil. In addition, five wells have been categorized as gas wells with initial rates of as much as 1.2 million cubic feet of gas per day. Daily production from the field is currently approximately 140 barrels per day of oil and is expected to continue to increase as a result of ongoing operations. With the continuation and increase of sustainable production, permanent processing facilities are currently being constructed within the field. Additionally, as five wells to date are considered to be reserved for future gas production, a study is underway to determine the feasibility of commercializing this resource, as the local gas sales grid is situated within five kilometers of the field. The Mtsare Khevi Field is located in the western portion of Block 12 with multiple objective reservoirs situated at depths between 200 meters and 1,100 meters. The field was discovered and partially delineated with multiple exploration wells from 1989 to 1994, but never developed and produced. After completing a field study in 2007 that indicated this field potentially contains as much as 5 million barrels of recoverable oil reserves, Frontera designed a plan to bring the shallow reservoirs from the Akchagil formation into production. Additional reserve potential exists in deeper Miocene age sandstone horizons that have previously tested and flowed oil. This potential is currently under study and will become a focus of future operations to fully develop the Mtsare Khevi Field. Rigs and equipment sourced from within Georgia are being utilized to undertake the currently ongoing development program. Steve C. Nicandros, Chairman and Chief Executive Officer, commented: "With the completion of our most recent development well and progression of field processing facility installation at the Mtsare Khevi Field, results continue to reveal a profitable development profile such that we are increasingly confident that this field will continue to provide important near term value creation for our company." Frontera's Shallow Fields Production Unit is located in the central portion of Block 12 and represents what the company believes to be an extensive trend of low-cost, low-risk undeveloped oil and gas reserves. Containing four discovered yet undeveloped or underdeveloped fields that have additional exploration potential, objectives are considered to be traditional, well-known reservoirs of Pliocene and Miocene age that are situated at depths from 10 meters to 1,500 meters. Notes to editors: 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 has operated in Georgia since 1997 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 and via the Over-the-Counter Market, U.S.A. - OTCQX Symbol: FRTE. For more information, please visit www.fronteraresources.com. For more information regarding Frontera's work at the Shallow Fields Production Unit, please visit: www.fronteraresources.com/Operations.php?link_id=43. 2. Gerard Bono, Frontera's Vice President and Chief Reservoir Engineer, is the qualified person who reviewed and approved the estimated reserve information contained in this announcement. These estimates are currently being reviewed by Netherland, Sewell & Associates and will be released as soon as practicable. 3. This release contains certain forward-looking statements, which may include, without limitation, expectations, beliefs, plans and objectives regarding potential transactions or ventures, potential drilling schedule, reserves and well performance, as well as 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: exploration and development results; availability and performance of needed equipment and personnel; seismic data; evaluation of logs and cores from wells drilled; results of production testing; fluctuations in oil and gas prices; weather conditions, general economic and capital markets conditions; the political situation in Georgia and neighboring countries; and other factors listed in Frontera's financial reports, which are available at www.fronteraresources.com/Investors.php?link_id=23. 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. Enquiries: Frontera Resources Corporation Liz Williamson Vice President, Investor Relations and Corporate Communications (713) 585-3216 lwilliamson@fronteraresources.com Nominated Advisor: Morgan Stanley Jon Bathard-Smith +44 20 7425 8000