Frontera Resources Regulatory News (FRR)

FRONTERA RESOURCES CORPORATION

("Frontera" or the "Company")

Houston, Texas, U.S.A. - 21 May 2012

OPERATIONS UPDATE AND NEW VENTURE INITIATIVE IN GREATER BLACK SEA REGION

Frontera Resources Corporation (London Stock Exchange, AIM Market, FRR), the oil and gas exploration and production company with assets in the country of Georgia, today announces an update of operations:

Key highlights:

- Since January, oil sales generated average monthly revenues of $760,000, projected to increase to $1.2 million with commencement of gas sales in Q3.

- Mtsare Khevi Gas Complex significantly expanded in potential and area

- Taribani Field 4 well drilling campaign designed to increase oil production this year

- Strategic partnership for Block 12 in development

- Memorandum of Understanding signed with Ukraine for new venture expansion

- Matured 2012 corporate debt retired

Mtsare Khevi Field

Mtsare Khevi Gas Complex

Throughout Q1 and Q2 of this year, efforts have continued to evaluate the extent of the Mtsare Khevi Field's gas potential. After recently completing an initiative of new drilling in the field, work has focused on continued testing and analysis of results from these wells and incorporating these results into assessment of gas exploitation area. In support of this, a new effort was initiated and completed to locate and analyze approximately 40 Soviet era wells throughout an expanded area related to the Mtsare Khevi Field, many of which encountered gas.

The result has been an expansion of the area that is now considered prospective for gas exploitation. Whereas efforts to date have been focused on an area of approximately 15 square kilometres in the southwest portion of the Mtstare Khevi Field area, an ongoing study to the northwest of this area has revealed a larger play of approximately 80 square kilometres that is now referred to as the Mtsare Khevi Gas Complex and encompasses zones 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 as much as approximately 1.2 tcf of gas in place (28 billion cubic meters) and approximately 700 bcf of recoverable gas (19.8 billion cubic meters).

Since January, testing has successfully confirmed and expanded the area for gas reserves down-dip to the Mtsare Khevi #32 discovery well that established the extension of gas reserves in this portion of the field late last year. Gas has tested at commercial rates from the #35 well, approximately 500 mcf/d (14,000 cubic meters per day) after oil was initially tested from one of the well's targeted objectives. Similarly, at the #33 well, after oil was initially tested from one of the well's target objectives, testing operations are ongoing for gas intervals that are analogous to those tested in the other wells in this portion of the field. All wells in this area of the field completed drilling operations to total depths of approximately 400 meters and have encountered both oil and gas reserves. The objective in this portion of the field is to continue to delineate/produce oil and gas reservoirs associated with Zones I, II and III, as well as begin initiatives to exploit deeper horizons that have now been identified.

Of note, among the analyzed inventory of wells drilled during the Soviet era, the V-#18 well was successfully located and re-entered in April. This well was found to contain significant gas potential and has been the basis for revising prospectivity associated with the Mtsare Khevi Gas Complex. When the well was originally drilled in 1985, gas was not a primary objective and, hence, was identified but never exploited. An extensive workover of this well is underway with plans to test multiple zones that encountered gas when the well was originally drilled to a total depth of approximately 5,000 meters.

Oil and Gas Sales

In parallel, plans for installation of gas sales infrastructure continues to progress. Original plans called for installation of gas infrastructure in April. However, due to extreme winter weather conditions during Q1 2012, slower than expected government permitting process, as well as delays associated with locating and modifying customized gas compression components, installation has been delayed until July. Gas from currently shut-in wells are poised to commence production in Q3 2012 at a rate of approximately 2 million cubic feet per day (57,000 cubic meters per day) and generate additional revenue of approximately $500,000 per month from the field.

Since January, oil production from the field has held steady at approximately 75 bopd, generating revenue of approximately $245,000 per month. With current continuous drilling plans, gas and oil production capacity is expected to increase as this year progresses.

Taribani Field

Negotiations are underway with a potential strategic partner for development of this large field prior to commencement of operations on a 4 well campaign designed to continue exploitation of Zones 9, 14, 15 and 19 within the field. Subject to completion and associated availability of funds, drilling operations at the field will commence, with the re-entry, sidetrack and frac-completion of the Niko #1 well. When Frontera originally drilled the Niko #1 well, it flowed at a peak rate of 960 bopd and produced 5,345 barrels during its forty day production test. However, production was suspended as a result of a poor completion and failed packer.Today, reservoir performance modelling by Frontera from this planned operation predicts a "most-likely" case of approximately 1,000 bopd.

In addition, Frontera plans the deepening of the existing T-#45 well in order to apply a frac-completion to Zones 14 and 15, as well as the drill two new wells with similar frac-completions in the same zones, T-#46 and T-#47. These wells are expected to deliver daily production rates of 300 bopd.

In total, the 4 well program is expected to add approximately 1,900 bopd or about $5.7 million in revenue per month at today's oil price.

In the meantime, oil production from 2 wells in the field has averaged 50 bopd and is currently being increased to 70 bopd with adjustment of production pumps, generating revenue of approximately $228,000 per month.

The Taribani Field is a very large oil accumulation with 788 million barrels OOIP independently assessed by Netherland, Sewell & Associates (NSA) 2005 for Zones 9, 14, 15 and 19. NSA assigns a 15% recovery factor giving "Technical Possible Reserves" of 118 million barrels for the field. An additional 36 million barrels are assessed as un-risked Prospective Resources in five deeper zones in the field.

Mirzaani Field

Since January, together with Schlumberger, optimized frac completion designs were completed for future new drilling operations at the Mirzaani Field. New drilling operations have been designed to advance work in the undeveloped northwestern portion of the field. Pending availability of capital to commence work, a 5 well program is expected to commence later this year with individual wells each expected to deliver approximately 100bbls per day, generating new revenue of approximately $1.5 million per month at today's prices.

The Mirzaani Field, which Frontera operates with 100% interest, is located in the eastern portion of the Shallow Fields Production Unit amidst a complex of several existing oil fields and currently delivers approximately 90 bopd from the older and historically developed portion of the field and surrounding areas, generating revenue of approximately $290,000 per month.

Discovered in 1932, the Mirzaani Field has historically produced oil from a small developed portion of the field but contains extensive undeveloped and underdeveloped areas. After acquiring approximately 100 kilometers of new 2D seismic data as part of an effort to re-map and identify new potential associated with the field, Frontera drilled the Mirzaani #1, #2 and #5 discovery and appraisal wells, which were the first wells to be drilled in the field since the Soviet-era.

NSA have assigned a "Best Estimate" for gross original oil-in-place for the Mirzaani Field and Mirzaani Northwest Extension of 541.7 million barrels, with a "low"-to-"high" range of 343.8-857.3 million barrels; and a "Best Estimate" for remaining recoverable gross contingent and unrisked prospective oil resources of 43.8 million barrels, with a "low"-to-"high" range of 20.5-86.1 million barrels. This assessment is consistent with Frontera's internal estimates.

Block 12

Consistent with Frontera's objectives to secure a strategic partner for the further advancement of work in Block 12, negotiations are underway to form a strategic partnership throughout all of Frontera's license area in Georgia.

Greater Black Sea Strategy - Ukraine

In March 2012, Frontera signed a Memorandum of Understanding (MOU) with the State Service For Geology and Mineral Resources of Ukraine. This agreement opens the way to provide Frontera with the ability to select an area for exploration and production work in the country. The MOU culminates an extensive effort of more than a year to advance Frontera's Greater Black Sea Strategy in order to pursue new growth throughout a region that contains significant undeveloped and under-explored oil and gas potential that the Company has identified.

With this milestone achieved, work will continue this summer to secure a new license and establish an operating presence in the country. Frontera's objective is to build on its extensive regional geologic knowledge and extend its efforts to the west through the acquisition of an expanded exploration and production portfolio.

Corporate Highlights

In May 2012, Frontera retired $262,000 of debt associated with the 2012 maturity of outstanding convertible notes that did not convert to equity or new 2016 convertible notes in August of last year.

Frontera plans to issue full year end 2011 results during the month of June.

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

"Frontera's progress has continued at a steady pace throughout the first half of 2012. Our multiple initiatives throughout Block 12 in Georgia are advancing with an objective of increasing revenues and profitability in the near term. Simultaneously, we continue to progress good efforts to secure an important strategic partner for our work in Block 12.

Looking beyond Georgia, timing has been favorable to advance our Greater Black Sea Strategy commencing with an identified objective in the Ukraine that represents a significant new addition to our Company's growth. This initiative builds on our extensive historical regional experience in Georgia and Azerbaijan, and allows us to bring this advantaged capability westward to secure new value for Frontera.

Finally, as we have now extinguished matured 2012 debt obligations, we also have carefully assessed utilization of our $35 million Standby Equity Distribution Agreement (SEDA) since the beginning of the year. Given the downward pressure on our stock price that has resulted from significant follow-on sales volumes associated with last year's debt conversion, we have been cautious in utilizing our $35 million facility at current pricing levels in order to accelerate operations. As a result, some of our programs have been delayed. That said, we look forward to utilizing alternative funding sources, strategic partnerships, as well as our SEDA during the second half of this year in order to advance our programs. With this in mind, I look forward to reporting our continued progress in the weeks and months to come."

Enquiries:

Frontera Resources CorporationLiz WilliamsonVice President, Investor Relations and Corporate Communications(713) 585-3216lwilliamson@fronteraresources.com

Nominated Adviser and Joint Broker:

finnCap Limited

Sarah Wharry

+44 (0) 20 7220 0500

Co-Brokers:

Old Park Lane Capital PlcMichael Parnes / Luca Tenuta+44 (0)20 7493 8188

Cornhill Capital LimitedNick Bealer / Stefan Olivier+44 (0)20 7710 9610

Financial PR:

BuchananTim Thompson / Helen Chan+44 (0)20 7466 5000timt@buchanan.uk.com

Notes to Editors:

About Frontera Resources Corporation 

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 currently operates in the country of Georgia 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. For more information, please visit www.fronteraresources.com.

2. 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). The full report, dated July 1, 2010, is available at www.fronteraresources.com. 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. 

3. 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.

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