20 Apr 2015 07:00
Houston, Texas, U.S.A. - 20 April 2015
FRONTERA RESOURCES CORPORATION HIGHLIGHTS GEORGIA
GAS OPERATIONS PROGRESS IN OPERATIONS UPDATE
Frontera Resources Corporation (AIM: FRR), an independent oil and gas exploration and production company, today announces operations progress at its Mtsare Khevi Gas Complex and Taribani Field Complex in Georgia and completion of independent resource assessment reports.
Highlights
Mtsare Khevi Gas Complex:
- Independent assessment of as much as 8.29 TCF of gas-in-place prospective resources with as much as 6.15 TCF recoverable prospective resources.
- Ongoing drilling/workover campaign continues.
- Expansion of gas processing/sales and transportation facilities in process.
Taribani Field Complex:
- Independent assessment of as much as 4.62 TCF gas-in-place prospective resources with as much as 3.23 TCF recoverable prospective resources.
- Preparation for commencement of operations associated with Varang Exploration farmout continues.
- Existing well workover/frac-recompletion campaign advancing.
Mtsare Khevi Gas Complex:
Independent Assessment of Gas Resources: A report by the independent consulting firm of Netherland, Sewell & Associates confirms prospective resources of as much as 8.29 TCF of gas-in-place for the Mtsare Khevi Gas Complex, with as much as 6.15 TCF of recoverable prospective resources. This is the first independent assessment to be conducted against Frontera's ongoing work at this asset. The final report can be accessed on Frontera's website at www.fronteraresources.com.
The Mtstare Khevi Gas Complex is an area of approximately 140 square kilometres and encompasses gas reservoir targets found between 300 metres and 5,000 metres in depth. Based on Frontera's internal estimates, analysis has revealed significant gas potential throughout this area of up to approximately 11 TCF of gas-in-place and up to approximately 9 TCF of recoverable gas resources.
Continuous Drilling Operations: Since Q4 of 2014, continuous drilling operations, workover operations and gas production operations have continued at the Mtsare Khevi Gas Complex. Of note, well #34 that was tested and completed in late 2014 was put into production at a daily rate of 1,250 Mcf per day. The well is producing from approximately 100 meters of gross objective intervals from depths between 220 meters to 320 meters.
Frontera's program this year consists of drilling 8 new wells and adding gas production from extensive unperforated/behind-pipe gas-bearing intervals that have been identified throughout an existing well inventory of 18 wells. These parallel operations will continue to provide increased gas-production and revenue generation from the area and will serve to further delineate gas reserves and associated upside potential for the Mtsare Khevi Gas Complex.
Expansion Of Existing Facilities: With the successful progression of ongoing operations, engineering design work has been completed to increase capacity of the existing gas gathering/processing facilities and associated 14 kilometer transportation system that has accommodated gas production at a planned rate of approximately two million cubic feet per day of gas. As a result of this work, the Company is in the process of increasing system capacity to approximately 7 million cubic feet of gas per day.
Taribani Field Complex:
Independent Assessment of Gas Resources: A report by the independent consulting firm of Netherland, Sewell & Associates confirms prospective resources of as much as 4.62 TCF of gas-in-place associated with deep gas bearing sands at the Taribani Field, with as much as 3.23 TCF of recoverable prospective resources from horizons situated between 3,400 meters and 5,400 meters in depth. This is the first independent assessment of the field's deep gas horizons to be conducted against Frontera's ongoing work. The final report can be accessed on Frontera's website at www.fronteraresources.com.
Over the past year, new internal geologic studies have been concluded at the Taribani Field revealing significant new gas resource potential associated with the field's deeper horizons. These extensive studies have been associated with recently completed similar work related with the nearby Mtsare Khevi Gas Complex that is situated to the west and on-trend with the Taribani Field Complex. Studies included the integration of historical drilling, geologic, geophysical and engineering databases; new geologic field work and outcrop sampling, as well as associated laboratory analysis.
Situated within the Taribani Field Complex, the Taribani Field's oil potential consists of 788 million barrels of original oil in place ("OOIP") at depths between 2,000 meters and 3,300 meters, independently assessed by Netherland, Sewell & Associates ("NSA") in 2005. The broader Taribani Field Complex is an area that encompasses approximately 1,400 square kilometres and includes the discovered yet undeveloped Taribani, Kila Kupra, Bayda and Iori fields within Block 12. Internal preliminary analysis suggests that there could be as much as 18 billion barrels of oil in place throughout this complex. Ongoing work continues to study and assess the viability of this analysis and larger scale development potential.
New Drilling: Preparation continues related to commencement of operations associated with Phase I of the Varang Exploration farmout agreement. Commencement of operations has been delayed due to equipment availability, with drilling now expected to commence during Q2 of 2015.
As previously announced, Phase I calls for the completion of three wells (estimated to be approximately US$17 million) over a period of 18 months. These wells are designed to continue exploitation of the Taribani Field's main oil reservoir objectives, as well as other associated horizons situated within a potentially prospective 1,000-meter geologic column situated between 2,000 meters and 3,000 meters in depth.
Specific operations will include the re-entry, sidetrack and frac-completion of the Niko #1 well and side track of the T-#31 and T-#16 wells in order to apply frac-completions to Zones 14 and 15. Based on the Company's reservoir performance modeling, it is anticipated that these wells can achieve a combined daily production rate of 1,600 bopd per day with hydraulic fracture stimulation.
Workover/Re-Completion Campaign: An eight well campaign for the remainder of this year has been planned for re-entry frac/re-completions within the field. This campaign will target Zones 9, 14 and 15 and will serve to enhance oil production from the Taribani Field. Operations will be conducted with Frontera's company-owned frac fleet that it has assembled over the past year. It is anticipated that each well could deliver 30-70 bopd of oil production.
Steve C. Nicandros, Chairman and Chief Executive Officer commented:
"In addition to the meaningful value that Frontera's historical investments have identified associated with our oil-related assets, our ongoing technical work continues to evolve and confirm a very significant gas resource in Georgia, which is now confirmed by the independent reserve auditing firm of Netherland, Sewell and Associates. As it has now been nearly one year since commencing gas production operations at the Mtsare Khevi Gas Complex, we are very focused to continue to expand and accelerate our efforts to bring this strategic resource to not only Georgia's domestic market, but also to nearby regional markets in Turkey, the European Union and Eastern Europe."
Enquiries:
Frontera Resources Corporation
Liz Williamson
Vice President, Investor Relations and Corporate Communications
(713) 585-3216
lwilliamson@fronteraresources.com
Nominated Adviser:
Cairn Financial Advisers LLP
61 Cheapside, London EC2V 6AX
Jo Turner/Avi Robinson
+44 (0) 20 7148 7900
Broker
Cornhill Capital Limited
Nick Bealer / Stefan Olivier
+44 (0) 207 710 9610
Financial PR:
Buchanan
Helen Chan
+44 (0) 20 7466 5000
helenc@buchanan.uk.com
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 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.
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). 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.
4. 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.