Frontera Resources Regulatory News (FRR)

31 Aug 2007 07:01

Frontera Resources Corporation31 August 2007 FRONTERA RESOURCES CORPORATION Houston, Texas, U.S.A. - 31 August, 2007 OPERATIONS UPDATE, TARIBANI FIELD UNIT AND BASIN EDGE PLAY UNIT Frontera Resources Corporation (London Stock Exchange, AIM Market - Symbol:FRR), an independent oil and gas exploration and production company, todayannounces an update on operations at its Taribani Field Unit and Basin Edge PlayUnit, Block 12, Georgia. Summary: • Operations at the Dino #2 well, the first of an extensive Zone 9development program at the Taribani Field Unit, have commenced and are inprogress. • Final preparations have been made for the drilling of the second ofthree planned Zone 9 development wells this year at Taribani Field (T-#45). Thiswell will spud in September after completion of work at the Dino #2 well. • Mobilization of drilling rig to Lloyd #1 location at the Basin EdgePlay Unit "C" Prospect is substantially complete and preparations are underwayto commence drilling operations shortly. Steve C. Nicandros, President and Chief Executive Officer, commented: "During the month of August, we passed several important milestones in our workprograms at the Taribani Field Unit and the Basin Edge Play Unit. Operationscommenced at the Dino #2 well within the Taribani Field Unit and are progressingaccording to plan. Moreover, important new reservoir engineering simulationswere also completed and provided further validation of our historical analysisrelated to anticipated production performance from our planned completiondesigns for the Zone 9 development wells. At our Basin Edge Play Unit, despite minor transportation delays related toshipping a second drilling rig to Georgia, the rig is now on location and willcommence drilling operations shortly. In recent weeks, we have also continuedto receive encouraging results from ongoing AVO analysis of our 3D seismicsurvey over the 'C' Prospect. As a result, we are technically well prepared andextremely excited to be commencing drilling operations on this giant prospect." 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 Taribani Field Unit Operations designed to re-complete the Dino #2 well in Zone 9 are now underway. Once this reservoir is isolated and perforated in the Dino #2 well, it will beput on controlled production test until the end of October when specializedequipment will be mobilized to apply frac-pac completions to this well and thenext well to be drilled, Taribani #45. Frac-pac completions are designed toenhance well flow-rates and ensure sustainability of production. When operations are completed at the Dino #2 well in September, the ARAR Dynamic#1 rig will immediately move a short distance within the field to commencedrilling the next Zone 9 development well at the Taribani #45 location.Construction of this location was completed in July and drilling will takeapproximately fifty days to reach total depth and complete in Zone 9. A thirdwell, the Taribani South #1, is also scheduled to commence in the fourth quarterof this year. Eight new wells are planned for 2008 as part of the ongoing Zone9 development plan. The re-entry of the Dino #2 well and drilling of the Taribani #45 and TaribaniSouth #1 wells are part of the Zone 9 development program, a 36-month, 20-wellprogram representing approximately 17 percent of the reserves attributed toZones 9, 14, 15 and 19 within the field. During the month of August, Fronteracompleted new internal reservoir simulation analysis designed to try to betterunderstand potential production performance of Zone 9 at the Dino #2 well andsubsequent Zone 9 completions. This work provided further validation thatpreviously modeled pre-frac and post-frac production rates of Zone 9 continue tobe supported by the extensive analysis of core samples taken during last year'soperations at the Dino #2 well. Frac-pac applications are expected to enhancepre-frac production rates by a factor of two to three times the pre-frac rate. The Taribani Field is a large, undeveloped oil field covering an area ofapproximately 80 square kilometers with productive horizons situated in Mioceneand Pliocene age reservoirs. These reservoirs are situated at depths between2,200 meters and 3,500 meters. The independent consulting firm of Netherland,Sewell & Associates has assigned 118 million barrels of P3 reserves from Zones9, 14, 15 and 19 within the field. Additionally, Netherland, Sewell &Associates has assigned as much as 36 million barrels of unrisked resourcepotential associated with five deeper horizons in the field. Basin Edge Play Unit Activities in anticipation of the commencement of drilling operations at theBasin Edge Play Unit "C" Prospect have continued to progress well. The LapidothIdeco Super 7-11/II drilling rig is now substantially on location andpreparations are underway to shortly commence drilling operations. Themobilization of this rig, comprising some 90+ truck loads of equipment from theGeorgian Black Sea port of Poti, will see the final remaining truckloads arriveon location within the next day. Designed to evaluate multiple horizons, this well will target completion inprimary reservoir objectives at a total depth of approximately 2,700 meters. TheLloyd #1 well is expected to take approximately 50 days to reach total depth. Ongoing analysis of 3D seismic data related to the "C" Prospect continues toconfirm that the prospect has a structural height of approximately 1,000 metersand, most significantly, the primary target Cretaceous reservoirs have beenidentified on the basis of seismic attributes at depths that could occur from2,000 meters to 3,700 meters. Further analysis utilizing amplitude with offsettechnology (AVO) in the processing of the 3D seismic data also continues tosuggest the possible presence of hydrocarbons within structural closure. Frontera's objectives within the Basin Edge Play Unit remain focused onaccessing the resource potential that is estimated by the independent consultingfirm of Netherland, Sewell and Associates to be in excess of one billion barrelsof recoverable oil for the "B" and "C" Prospects. Of this total, prior to theacquisition of new seismic data, the "C" prospect was estimated to contain asmuch as 500 million barrels of recoverable oil. The Basin Edge "B" and "C"Prospects are situated along the northern border of Block 12 and represent oneof the newest and potentially most prolific exploration plays in the Upper KuraBasin. Frontera's primary reservoir targets are located in the Cretaceous agecarbonate rocks, with secondary reservoir targets in the Jurassic, Miocene andPliocene age clastic rocks. 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. 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 and ventures discussed in thisrelease, as well as reserves, future drilling, development and production. Amongthe important factors that could cause actual results to differ materially fromthose indicated by such forward-looking statements are future exploration anddevelopment results, availability and performance of needed equipment andpersonnel, seismic data, fluctuations in oil and gas prices, weather conditions,general economic conditions and the political situation in Georgia andneighboring countries. There is no assurance that Frontera's expectations willbe realized, and actual results may differ materially from those expressed inthe forward-looking statements. This information is provided by RNS The company news service from the London Stock Exchange