Frontera Resources Regulatory News (FRR)

8 May 2008 07:01

Frontera Resources Corporation08 May 2008 FRONTERA RESOURCES CORPORATION Houston, Texas, U.S.A. - May 8, 2008 OPERATIONS UPDATE, TARIBANI FIELD UNIT Frontera Resources Corporation (London Stock Exchange, AIM Market - Symbol: FRR;OTCQX Market, U.S.A. - Symbol: FRTE), an independent oil and gas exploration andproduction company, today announced an update of its operations at the TaribaniField Unit within Block 12, Georgia. After the successful completion of fracing operations at the Dino #2 developmentwell during the last week of April, as previously reported, the flowing well wasbrought under control, production tubing was set and the well was completed onMay 3. During subsequent initial production testing, early results haveindicated that the well is flowing at sustainable rates with no associated flowof sediment. The Dino #2 well is flowing oil from Zone 9, a ten-meter oil-producing reservoirinterval that was hydraulically fraced at a depth of approximately 2,300 meters.During initial production testing, the well has so far produced at rates as highas 150 barrels of oil per day of 36 degree API oil, with small amounts ofassociated gas, using a 4/64th inch choke at a well head surface pressuredrawdown of 1,500 psi. Bottom hole pressures have been measured atapproximately 5,900 psi. Flowing tubing pressures have been observed to beconstant, indicating sustainable flow from the reservoir into the well bore.Based on extrapolation modeling of current information, Frontera believes thewell is capable of producing at rates in excess of 200 barrels per day.Production testing over the next twenty to sixty days will further determinemaximum sustainable flow rates and drawdown for optimal oil recovery andreservoir management. Significantly, production information obtained from the Dino #2 well has thusfar indicated no sediment flow into the well bore, an occurrence that haspreviously presented a challenge to sustainable production from wells at theTaribani Field. In addition, the application of artificially induced fractureshas created enhanced permeability from the oil bearing Zone 9 reservoir matrixand appears to have also created connectivity with existing natural oil bearingfracture systems to provide greater reservoir permeability. Frontera believes the Dino #2 completion has validated several importantelements of its field development model regarding Zone 9. Specifically,operations have confirmed Frontera's ability to successfully apply fraccompletions to Zone 9 and arrest sediment flow. Additionally, work hasconfirmed that oil bearing natural reservoir fracture systems can besuccessfully encountered via fracing operations. Based on this newinformation--coupled with previous core analysis that determined matrixporosities were higher than originally projected by third-party reservoirengineering assessments, thereby verifying a larger hydrocarbon storagecapability--recovery per well is anticipated to also be within expectedcommercial parameters. The workover rig and frac equipment is now being mobilized a short distancewithin the Taribani Field from the Dino #2 location to the T-#45 location whereit will apply a frac pac completion to Zone 9 at a depth of approximately 2,400meters in the days ahead. Steve C. Nicandros, Chairman and Chief Executive Officer, commented: "The initial production results from the Dino #2 well are very significant andwe believe they confirm our plans for the ongoing development of Zone 9 amidstan attractive commodity price environment. With the results we have seen fromthe frac operation so far, we believe we have crossed an important milestone indeveloping this large field and validated the fit-for-purpose completiontechnology that we designed for this reservoir. While we will be continuing ourtesting program over the next several weeks, we are now evolving our plans toaccelerate our ongoing efforts and, with each successive well that is broughtinto production from Zone 9, we look forward to increasing production and theassociated reclassification of reserves within the Taribani Field Unit." 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 located 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. Zone 9 represents approximately 20% of thistotal. Additionally, Netherland, Sewell & Associates has assigned as much as 36million barrels of unrisked resource potential associated with five deeperhorizons in the field. 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 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.Frontera Resources Corporation shares are traded on the London Stock Exchange,AIM Market - Symbol: FRR and via the Over-the-Counter Market, U.S.A. - OTCQXSymbol: FRTE. For more information, please visit www.fronteraresources.com. Formore information regarding Frontera's work at the Taribani Field, please visit:http://www.fronteraresources.com/operations/taribanifieldunit.php 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. This information is provided by RNS The company news service from the London Stock Exchange