Frontera Resources Regulatory News (FRR)

18 Dec 2007 07:02

Frontera Resources Corporation18 December 2007 Operations Update, Basin Edge Play Unit HOUSTON, TX--(Marketwire - December 18, 2007) - Frontera Resources Corporation(AIM: FRR) (PINKSHEETS: FRTE), an independent oil and gas exploration andproduction company, today announced an update of operations at the Lloyd #1 wellat its Basin Edge Play Unit, Block 12, Georgia. Since issuing the most recent Operations Update of November 27, 2007 fordrilling operations at the "C" Prospect, ongoing analysis has revealed that theLloyd #1 well has encountered multiple potential reservoirs as well as multiplehydrocarbon shows throughout the Tertiary age section of the well. In addition,geologic core samples have been observed to contain oil and vertical fractures. Within this Tertiary age section, drilling has also revealed the unexpecteddiscovery of the presence of important additional lower-Tertiary age geologicformations within the "C" Prospect. These formations, which consist of Oligoceneand Eocene age rocks, are known to contain prolific reservoirs in fields thatare situated on-trend to the west and south of the "C" Prospect within the upperKura Basin. The deepest and oldest interval encountered thus far is of Eocene age, which isexpected to be situated stratigraphically above the Cretaceous age formationsthat are primary target objectives within the "C" Prospect. At this time, drilling operations continue with the objective of ultimatelyreaching target depth in Cretaceous age formations within the next three weeks.Based on analysis of drilling and logging results during the past two weeks, itwas determined that the well was drilling through highly dipping lower Tertiaryrocks. When calibrated to 3D seismic data, it was noted that the Lloyd #1well-bore was on a trajectory further down-dip, or lower on the flank of the "C"Prospect structure than originally desired. As a result, after drilling to a measured depth of approximately 3,000 meters toobtain important geologic information regarding the "C" Prospect's down-dipflank, a new up-dip drilling trajectory was commenced from 1,600 meters withinthe Lloyd #1 well-bore. This was done in order to more optimally encounter thewell's Cretaceous age geologic formation targets and also appraise the Tertiaryage geologic formations in an up-dip position to where oil and gas shows wereencountered low on the structure. Based on the geologic results observed todate, the new trajectory is expected to re-encounter Tertiary age formationsapproximately 130 meters to 170 meters up-dip from where oil and gas shows havealready been observed and core samples exhibiting live-oil and verticalfractures have been taken in middle-Miocene age sandstones. The well is nowexpected to encounter the top of the primary objective Cretaceous formations ata true vertical depth of approximately 2,700 meters, a depth that is 400 metersup-dip on the "C" structure from where it otherwise was expected to beencountered in the well's former trajectory. On the basis of data gathered fromdrilling operations, plans are to continue drilling the well to a maximum depthof as much as 3,700 meters. Steve C. Nicandros, President and Chief Executive Officer, commented: "We remain very encouraged by the results that we continue to observe from theLloyd #1 well, and I am proud of the manner in which our exploration team hasapproached the evaluation of the 'C' Prospect thus far. In this context,calibration of well logs and biostratigraphic data obtained from the Lloyd #1well to the high resolution 3D seismic data over the 'C' Prospect has proved tobe a critical element in the evolution of our understanding of this prospect,and we are incorporating this information into the ongoing drilling of the Lloyd#1 well. As a result, we will now be able to not only appraise the hydrocarbonsthat have already been encountered in the well's Tertiary age secondaryobjectives, but we will also be able to adjust our drilling target to enhancethe possibility to more optimally encounter the well's Cretaceous age primaryobjectives. This is a very important achievement in our evaluation of theenormous potential of the Basin Edge 'C' Prospect with only the first well onthe structure." As previously stated, analysis of the 3D seismic data related to the "C"Prospect prior to commencement of drilling indicated that the primary targetreservoir objectives, identified on the basis of seismic attributes, could occurat depths from 2,000 meters to 3,700 meters. Data thus far gathered from theLloyd #1 well continues to support this model. The recently discovered presenceof the Oligocene and Eocene sections within the Lloyd #1 well provides furtherconfirmation that the geology is relatively intact and that the primaryobjective Cretaceous section still lies ahead within the originally predicteddepth intervals. Frontera's Basin Edge Play Unit is located along the northern border of Block 12and represents what the company believes is one of the newest and potentiallymost prolific exploration plays in the Upper Kura Basin. Netherland, Sewell andAssociates estimate total unrisked resource potential to be in excess of onebillion barrels of recoverable oil within the unit's two major prospects ("B"and "C"). Of this total, prior to the acquisition of new seismic data suggestingan even larger structure, the "C" Prospect was estimated to contain as much as300 million barrels of recoverable oil from primary reservoir targets and asmuch as 250 million barrels from secondary reservoir objectives. Frontera'sprimary reservoir targets are located in the Cretaceous age carbonate rocks,with secondary reservoir targets in the Tertiary age clastic rocks as well asJurassic carbonates. Notes to editors: 1. Frontera Resources Corporation is an independent Houston, Texas, U.S.A.-basedinternational oil and gas exploration and production company whose strategy isto identify opportunities and operate in emerging markets around the world.Frontera has operated in Georgia since 1997 where it holds a 100 percent workinginterest in a production sharing agreement with the government of Georgia. Thisgives Frontera the exclusive right to explore for, develop and produce oil andgas from a 5,060 square kilometer area in eastern Georgia known as Block 12. Formore information about Frontera, please visit www.fronteraresources.com. 2. The reserve information herein was determined by the independent consultingfirm of Netherland, Sewell & Associates in accordance with the petroleumresource definitions adopted by the Society of Petroleum Engineers (SPE), WorldPetroleum Council (WPC) and the American Association of Petroleum Geologists(AAPG) in 2000. 3. This release contains certain forward-looking statements, including, withoutlimitation, expectations, beliefs, plans and objectives regarding the potentialtransactions, potential drilling schedule, well results and ventures discussedin this release, as well as reserves, future drilling, development andproduction. Among the important factors that could cause actual results todiffer materially from those indicated by such forward-looking statements are:future exploration and development results; availability and performance ofneeded equipment and personnel; seismic data; evaluation of logs and cores fromwells drilled; fluctuations in oil and gas prices; weather conditions, generaleconomic conditions; and the political situation in Georgia and neighboringcountries. There is no assurance that Frontera's expectations will be realized,and actual results may differ materially from those expressed in theforward-looking statements. Enquiries: Frontera Resources CorporationLiz WilliamsonVice President, Investor Relations and Corporate Communications(713) 585-3216lwilliamson@fronteraresources.com Brunswick Group LLPPatrick Handley / Mark Antelme+44 207 4045959 This information is provided by RNS The company news service from the London Stock Exchange