Frontera Resources Regulatory News (FRR)

19 Feb 2008 07:01

Frontera Resources Corporation19 February 2008 FRONTERA RESOURCES CORPORATION Houston, Texas, U.S.A. - February 19, 2008 OPERATIONS UPDATE, BASIN EDGE PLAY 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 operations at the Lloyd #1 wellat its Basin Edge Play Unit, Block 12, Georgia. In the most recent Operations Update of December 18, 2007 for drillingoperations at the "C" Prospect, it was reported that after drilling to ameasured depth of approximately 3,000 meters, a new up-dip drilling trajectory(Sidetrack #1-2) was commenced from 1,600 meters within the Lloyd #1 well-bore.This was done in order to more optimally encounter the well's Cretaceous agegeologic formation targets and also appraise the Tertiary age geologicformations in an up-dip position to where oil and gas shows were encountered lowon the structure. In early February, Sidetrack #1-2 reached the top of the middle Eocene formationat a measured depth of approximately 2,600 meters, and similar hydrocarbon showswere encountered in a position approximately 440 meters up-dip to thoseencountered in the top of the middle Eocene formation within the Lloyd #1original well bore. Hydrocarbon shows and potential reservoir were observedbased on analysis of cuttings and mud logs. Drilling in the Lloyd #1-Sidetrack #1-2 has also confirmed the up-dip presenceof important additional lower-Tertiary age geologic formations within the "C"Prospect. These formations, which consist of Oligocene and Eocene age rocks,are known to contain prolific reservoirs in fields that are situated on-trend tothe west and south of the "C" Prospect within the Upper Kura Basin. After completing logging runs, intermediate 9-5/8" casing was set to a depth ofapproximately 2,533 meters within the middle Eocene formation. Upon resumptionof drilling from this depth, unexpectedly difficult drilling conditions wereencountered that resulted in extremely slow rates of penetration andunacceptable well bore instability. Analysis has determined that these conditions are most likely attributable tothe highly tectonized nature of the middle Eocene formation and the angle atwhich the well was being drilled. As a result, a new sidetrack with a lowerwell bore angle has commenced drilling from a measured depth of approximately2,200 meters. This modification should permit operations to progress moreefficiently with the objective of drilling through the remainder of the middleEocene formation in order to optimally encounter the well's Cretaceous agegeologic formation targets. This Eocene formation is expected to be situatedstratigraphically directly above the Cretaceous age formations that are theprimary target objectives within the "C" Prospect. At this time, drilling operations at the Lloyd #1-Sidetrack #1-3 are progressingwith the expectation of reaching the top of the primary objective Cretaceousformations at a measured depth of approximately 2,950 meters within the next twoto three weeks. This is approximately 300 meters up-dip on the "C" structurefrom where it otherwise was expected to be encountered in the well's originaltrajectory. Plans are to continue drilling the well to a maximum vertical depthof as much as 3,700 meters. Steve C. Nicandros, President and Chief Executive Officer, commented: "Since the middle of December, our work at the 'C' Prospect has continued to beexciting and encouraging. The important technical progress achieved to date hasprovided further confirmation of our geologic model, and we have alreadyidentified future drilling locations for follow-up evaluation of what has beendiscovered throughout the Tertiary age formations. As our exploration effortshave continued, we have experienced unanticipated delays associated withchallenging drilling conditions at the Lloyd #1 well. However, this is a realityof drilling exploration wells that by no means overshadows the promising resultsobtained to date. As a result, we remain very focused on completing evaluationof the Eocene formation and reaching the Cretaceous objectives of the Basin Edge'C' Prospect within the next two to three weeks." 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 up-dippresence of the Oligocene and Eocene sections within the Lloyd #1-Sidetrack #1-2provides further confirmation that the geology is relatively intact andcontinuous within the "C" Prospect and that the primary objective Cretaceoussection still lies ahead within the originally predicted depth 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. Enquiries: Frontera Resources CorporationLiz WilliamsonVice President, Investor Relations and Corporate Communications(713) 585-3216lwilliamson@fronteraresources.com Brunswick Group LLPPatrick Handley / Mark Antelme+44 207 404595 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. 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