26 Sep 2016 15:35
FRONTERA RESOURCES CORPORATION
Houston, Texas, U.S.A. - 26 September 2016
FRONTERA ANNOUNCES OPERATIONS PROGRESS AT THE SOUTH KAKHETI GAS COMPLEX IN THE COUNTRY OF GEORGIA AND ASSOCIATED SEDA DRAW DOWN
Frontera Resources Corporation (AIM: FRR), an independent oil and gas exploration and production company ("Frontera" or the "Company"), is pleased to issue the following update of operations in the country of Georgia.
Since Frontera's last update on September 5, 2016, operations continue to progress at the South Kakheti Gas Complex, situated within its Block 12 portfolio.
Work programs have this year resulted in important new technical milestones that have been achieved in Oil Window frac operations. The application of demonstrated stimulation methodology has improved overall Zone 9 hydrocarbon recovery. As we implement techniques that have been applied in similar zones across North America, we continue to adapt in order to maximize production rates and cumulative volumes. With this, well preparation, site construction and associated materials procurement are in process for the next six well campaign that is planned to commence in October.
The upcoming campaign will continue to yield results for Oil Window and Gas Window reservoir objectives against the Company's planned work programs this year. Of note, related to Gas Window operations, the Udabno#2 well will be stimulated as part of a testing program in October. The planned stimulation will be the first that is designed to evaluate an extensive gas-bearing interval of approximately 2,000 meters in gross reservoir thickness associated with this well. A targeted, multi-zone approach will be implemented in order to maximize the stimulated rock volume.
Additionally, procurement of additional stimulation and related equipment has been completed. This will serve to expand the Company's present fleet in order to implement more complex and beneficial completion designs for the current and future stimulation campaigns.
As previously announced on 10 June 2016, financing of ongoing capital requirements is sourced via an existing Standby Equity Distribution Agreement ("SEDA") with YA II PN, Ltd. (formerly as YA Global Master SPV Ltd.). In this context, a draw in the amount of £527,475.24 (the "Draw Down") has been completed and the Draw Down has been undertaken at a price of £0.0007 per share in accordance with the terms of the SEDA, and will result in the issue of 753,536,060 new ordinary shares of US$0.00004 each in the Company ("New Ordinary Shares"). The funds will be used to advance work programs of the Company.
Application will be made for the New Ordinary Shares to be admitted to trading on AIM, which is anticipated to occur on 30 September 2016 ("Admission"). The New Ordinary Shares will rank pari passu with existing ordinary shares of the Company.
Following Admission, the Company will have 7,947,397,998 ordinary shares in issue with voting rights. The Company does not hold any ordinary shares in treasury and accordingly there are no voting rights in respect of any treasury shares. The aforementioned figure of 7,947,397,998 ordinary shares may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company, under the disclosure requirements applicable to the Company.
Steve C. Nicandros, Chairman and Chief Executive Officer, commented:
"The technical progress related to our Gas Window and Oil Window operational objectives continue to yield extremely important results with respect to achieving increased pilot-production rates from tight reservoir targets that have either never produced before or have previously yielded low production rates. Our next series of well stimulations are part of an important progression of focused well-completion design work that will serve to enhance pilot-production results from the tight reservoirs found in Block 12. As stimulation designs continue to evolve with the delivery of increased pumping capacity, we are moving closer to unlocking the value associated with the vast oil and gas potential that our historical investments have identified."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
Enquiries:
Frontera Resources Corporation
Jesse Jefferies
(713) 585-3216
info@fronteraresources.com
Nominated Adviser
Cairn Financial Advisers LLP
61 Cheapside, London EC2V 6AX
Jo Turner / Liam Murray
+44 (0) 20 7148 7900
Broker
Cornhill Capital Limited
Nick Bealer
+44 (0) 207 710 9610
Financial PR
Buchanan
Ben Romney
+44 (0) 20 7466 5000
frontera@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.
1. Information on Resource Estimates: The independent 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). Internal resources estimates were determined by the Company. 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 both independent and internal estimates in this announcement.
2. 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.
3. 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.