Frontera Resources Regulatory News (FRR)

3 Aug 2007 07:00

Frontera Resources Corporation03 August 2007 FRONTERA RESOURCES CORPORATION Houston, Texas, U.S.A. - 3 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 9 development program at the Taribani Field Unit, will commence during the first half of August. The unexpected duration of planned rig inspections and required upgrades has delayed initiation of work for a short period. • Construction of a new drilling location for the second of three planned Zone 9 development wells this year at Taribani Field (T-#45) is now complete. • Construction of the drill site location for the Lloyd #1 well, as well as 6.5 kilometers of new road leading to it at the Basin Edge Play Unit "C" Prospect, is now complete. A drilling rig is being mobilized and drilling operations are expected to commence during the second half of August. Steve C. Nicandros, President and Chief Executive Officer, commented: "During the month of July, we continued to responsibly progress towards theimminent commencement of new drilling operations at both the Basin Edge 'C'Prospect and the Taribani Field Unit. While we have been very eager to commencedown-hole operations as soon as possible at the Taribani Field Unit, we found itnecessary to take additional time to conduct appropriate inspections and requireassociated repairs to the mobilized drilling equipment prior to accepting it forour operations. The high demand for equipment in today's marketplace is suchthat proper diligence is necessary to ensure that Frontera will have safe anduninterrupted development operations in the months ahead. At the Basin Edge 'C' prospect, important milestones have been achieved with thecompletion of the Lloyd #1 drill site location as well as a new road to thelocation that is situated in a relatively remote area of Block 12. A seconddrilling rig is currently enroute to the site and drilling is expected tocommence during the second half of August. With two rigs running simultaneouslyin these very prospective business units, the rest of this year will be a veryexciting time for our company." 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 The ARAR Ideco Dynamic #1 drilling rig arrived on location in June to primarilyundertake the planned development program of Zone 9 over the next 36 months.After a series of planned mechanical inspections prior to accepting the rig foroperations from the drilling contractor, it was determined that putting the rigimmediately to work should be delayed in favor of making a variety of necessaryrepairs and upgrades prior to the start of extensive development drillingoperations. Over the past month, these repairs and upgrades have been addressedand operations at the Dino #2 well will commence in the first half of August. Once operations begin, completion in the Zone 9 interval within the Dino #2 wellis expected to take approximately 30 days. After perforation, the well will beput on controlled production until late October when specialized equipment ismobilized from Eastern Europe to apply frac-pack completions to this well andthe next well to be drilled, Taribani #45. When operations are completed at the Dino #2 well, the Dynamic #1 rig willimmediately move a short distance within the field to commence drilling the nextZone 9 development well at the Taribani #45 location. Construction of thislocation was completed during the past month and the well is scheduled tocommence in September. It will take approximately fifty days to reach totaldepth and complete in Zone 9. A third well, the Taribani South #1, is scheduledto commence in November. Eight new wells are planned for 2008 as part of theongoing Zone 9 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. 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 Preparations for the commencement of drilling operations at the Basin Edge PlayUnit "C" Prospect have progressed well in July. Drillsite construction and 6.5kilometers of new road construction that leads to the Lloyd #1 location are nowcomplete. The Lapidoth Ideco Super 7-11/II drilling rig is being mobilized tothe location and, after experiencing transportation delays associated withshipping the rig to Georgia during July, it will now be ready to commencedrilling operations during the second half of August. 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. 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