Frontera Resources Regulatory News (FRR)

Neither this announcement nor any part of it constitutes an offer to sell or issue or the solicitation of an offer to buy, subscribe or acquire any securities of the Company or Frontera Cayman in any jurisdiction in which any such offer or solicitation would be unlawful and the information contained herein is not for publication or distribution, directly or indirectly, in or into the United States of America, Canada, Japan, Australia, The Republic of South Africa or any jurisdiction in which such publication or distribution would be unlawful.

FRONTERA RESOURCES CORPORATION

Houston, Texas, U.S.A. - 28 June 2011

PROPOSED EQUITY FUNDRAISING, SEDA FACILITY,

DEBT RESTRUCTURING AND

REDOMICILE TO THE CAYMAN ISLANDS

·; Equity Fundraising - Conditional fundraising of approximately £6.8 million (US$11.0 million), before expenses, by means of a placing of new equity with certain institutional and other investors, as well as through a subscription by a Director and a senior executive, at a price of 4 pence per share.

·; SEDA- Execution of a standby equity distribution agreement providing for up to approximately £21.5 million (US$35 million) of additional equity investment over a three-year period, subject to the satisfaction of certain conditions.

·; Work Program - Net proceeds of £5.2 million (US$8.5million) to fund next phase of investment in work programs designed to increase oil and gas production and associated reserve bookings in Block 12 and to settle cash consideration to certain shareholders, as applicable.

·; Loan Note Conversion - Exchange offer for conversion and/or extension of outstanding 10% convertible loan notes due 2012 and 2013. Expected exchange of at least US$91.1 million principal amount of existing loan notes for new equity, representing approximately 75.4% of the total amount of loan notes outstanding, at the equity fundraising price.

·; Management Debt Conversion - Conversion of approximately US$8.4 million in loans by a Director and a senior executive, representing 100% of the total amount including accrued interest, at the equity fundraising price.

·; Redomicile - Redomicile from Delaware, USA, to the Cayman Islands by way of a merger into a newly incorporated Cayman Islands holding company.

The completion of the matters outlined above is subject to a number of conditions. Details of the matters and their conditions are set out below.

Steve C. Nicandros, Chairman and Chief Executive Officer, commented:

"The addition of significant new capital resources and the simultaneous restructuring of the Company's outstanding debt represents an important milestone in Frontera's growth plans. This transaction will simplify and strengthen our balance sheet and will greatly enhance Frontera's operating and financial flexibility. As a result, we will be well positioned to realise value from significantly advancing the next phase of continued investment in our work programs that are aimed at increasing oil and gas production and associated reserve bookings."

Enquiries:

Frontera Resources Corporation

Liz Williamson

Vice President, Investor Relations and Corporate Communications

(713) 585-3216

lwilliamson@fronteraresources.com

Nominated Adviser:

Strand Hanson Limited

James Harris / Andrew Emmott / Paul Cocker / Liam Buswell

+44 (0)20 7409 3494

Brokers:

Arbuthnot Securities Limited

Richard Johnson / Adam Lloyd

+44 (0)20 7012 2000

Old Park Lane Capital Plc

Michael Parnes / Luca Tenuta

+44 (0)20 7493 8188

Financial PR:

Buchanan Communications

Tim Thompson / Ben Romney

+44 (0)20 7466 5000

timt@buchanan.uk.com

IMPORTANT INFORMATION

Capitalised terms used in this announcement and not otherwise defined herein have the meanings given such terms under the heading "Definitions," found in the Appendix of this announcement.

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negatives or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include, but are not limited to, statements regarding the Group's intentions, beliefs or current expectations concerning, among other things, the Group's results of operations, financial position, liquidity, prospects, growth, strategies and expectations.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements are not guarantees of future performance and the development of the markets and the industry in which the Group operates, may differ materially from those described in, or suggested by, the forward-looking statements contained in this announcement. In addition, even if the development of the markets and the industry in which the Group operates are consistent with the forward-looking statements contained in this announcement, those developments may not be indicative of developments in subsequent periods. Exploration for oil is a speculative business that involves a high degree of risk. A number of factors could cause developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, risks inherent in oil and gas production operations; availability and performance of needed equipment and personnel; the Company's ability to raise further capital to fund the Group's 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 the Group's financial reports, which are available at www.fronteraresources.com/Investors.php?link_id=23. There is no assurance that the Group's expectations will be realised, and actual results may differ materially from those expressed in the forward-looking statements.

Any forward-looking statements in this announcement reflect the Group's current view (assuming Admission has occurred) with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's operations and growth strategy. Investors should specifically consider the factors which could cause results to differ before making an investment decision. Subject to the requirements of the AIM Rules or applicable law, the Company undertakes no obligation publicly to release the result of any revisions of any forward-looking statements in this announcement that may occur due to any change in the Group's expectations or to reflect events or circumstances after the date of this announcement.

This announcement has been issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Strand Hanson Limited, Arbuthnot Securities Limited and Old Park Lane Capital Plc, or by any of their respective affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Strand Hanson Limited, which is authorised and regulated in the United Kingdom by the UK Financial Services Authority ("FSA"), is acting as nominated adviser to the Company (and Frontera Cayman) and for no-one else in connection with Admission and the Proposals, and will not be responsible to anyone other than the Company (and Frontera Cayman) for providing the protections afforded to its clients or for providing advice to any other person in relation to the Admission and the Proposals or any other matter referred to herein.

Arbuthnot Securities Limited, which is authorised and regulated in the United Kingdom by the FSA, is acting as joint broker to Frontera Cayman and for no-one else in connection with the Placing, and will not be responsible to anyone other than the Company (and Frontera Cayman) for providing the protections afforded to its clients or for providing advice to any other person in relation to the Placing or any other matter referred to herein.

Old Park Lane Capital Plc, which is authorised and regulated in the United Kingdom by the FSA, is acting as joint broker to Frontera Cayman and for no-one else in connection with the Placing, and will not be responsible to anyone other than the Company (and Frontera Cayman) for providing the protections afforded to its customers or for providing advice to any other person in relation to the Placing or any other matter referred to herein.

The distribution of this announcement and the offering of the securities of Frontera Cayman (including the Frontera Cayman Shares to be issued pursuant to the Proposals) in certain jurisdictions may be restricted by law. No action has been taken by the Company or Frontera Cayman or its advisers that would permit an offering of such shares or possession or distribution of this announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Company and its advisers to inform themselves about, and to observe such restrictions.

The information in this announcement shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would require preparation of a prospectus or other offer documentation, or be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.

No public offer of securities of the Company or Frontera Cayman is being made in the United Kingdom, the United States, the Cayman Islands, or elsewhere. The information in this announcement does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933 as amended (the "US Securities Act") and the securities may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the US Securities Act. There will be no public offer of securities in the United States.

FRONTERA RESOURCES CORPORATION

Houston, Texas, U.S.A. - 28 June 2011

PROPOSED EQUITY FUNDRAISING, SEDA FACILITY,

DEBT RESTRUCTURING AND

REDOMICILE TO THE CAYMAN ISLANDS

Frontera Resources Corporation (London Stock Exchange, AIM Market: FRR; OTC Market, U.S.A.: FRTE), an independent oil and gas exploration and production company ("Frontera", "Frontera Delaware" or the "Company"), is pleased to announce the conditional raising of approximately £6.8 million (US$11.0 million), before expenses, through an issue by Frontera Cayman (as defined below) of new ordinary shares of US$0.00004 each ("Frontera Cayman Shares"), and a debt restructuring comprising: (a) the conversion of at least US$91.1 million of existing convertible loan notes, representing approximately 75.4% of the principal amount outstanding, and (b) the conversion of approximately US$8.4 million of management loans, representing 100% of the total amount including accrued interest, into Frontera Cayman Shares, as well as the redomicile of the Company by way of a merger (the "Merger") into a new Cayman Islands incorporated holding company ("Frontera Cayman"). The equity fundraising, the debt restructuring and the Merger are referred to collectively in this announcement as the "Proposals."

Frontera Cayman has today also entered into a Standby Equity Distribution Agreement (the "SEDA") with YA Global Master SPV Ltd, an investment fund managed by Yorkville Advisors LLC, pursuant to which, upon completion of the Proposals, up to approximately £21.5 million (US$35 million) of additional equity investment, through the issue of Frontera Cayman Shares, will be made available to Frontera Cayman over a three-year period (subject to the satisfaction of certain conditions). Further details on the SEDA and the conditions relating to its availability are set out in the Appendix.

The Company has also today announced the Group's financial results for the year ended 31 December 2010 and provided an update of its operations in Block 12 in the country of Georgia in a separate announcement.

THE PROPOSALS

The Equity Fundraising

The Group has today conditionally raised approximately £6.8 million (US$11.0 million), before expenses, by means of a placing of 115,678,351 new Frontera Cayman Shares (the "Placing") with certain institutional and other investors, as well as through a subscription for 53,959,053 new Frontera Cayman Shares by an entity associated with Steve Nicandros (Chairman of the Board and Chief Executive Officer) and another senior executive of the Group (the "Subscription" and, together with the Placing, the "Equity Fundraising").

Frontera Cayman has today entered into a placing agreement with Strand Hanson Limited ("Strand Hanson"), as nominated adviser, and Arbuthnot Securities Limited and Old Park Lane Capital Plc, as joint placing agents (the "Placing Agreement"), pursuant to which the joint placing agents have agreed to use their reasonable endeavours to procure subscribers for 115,678,351 Frontera Cayman Shares at a price of 4 pence per share (the "Placing Price"), raising approximately £4.6 million (US$7.5 million), before expenses. The Placing is conditional, inter alia, on the other transactions contemplated by the Proposals becoming effective or not having been terminated (including the SEDA not having been terminated) and on the admission of the Frontera Cayman Shares to trading on AIM, the market operated by London Stock Exchange plc ("AIM") ("Admission"). Further details of the Placing Agreement are set out in the Appendix.

Frontera Cayman has also entered into subscription agreements with an entity associated with Mr. Nicandros and with another senior executive of the Group (the "Subscription Agreements"), pursuant to which the subscribers have agreed to subscribe for 53,959,053 new Frontera Cayman Shares at the Placing Price, raising approximately £2.2 million (US$3.5 million), in a simultaneous private placing pursuant to Regulation D under the US Securities Act. The Subscription is conditional, inter alia, on the Merger becoming effective and on Admission, and represents a further personal investment of US$2.0 million by Mr. Nicandros in the Company which, together with existing loans and prior equity investments, totals US$8.8 million since September 2009. Further details of the Subscription Agreements are set out in the Appendix.

The Directors believe that the net proceeds of the Equity Fundraising, being US$8.5 million (after expenses of approximately US$2.5 million, of which US$0.9 million has been reinvested in the Placing), will enable the Group to fund the next phase of continued investment in its work programs, which are designed to increase oil and gas production and associated reserve bookings from within its Block 12 asset portfolio. Further details on the proposed use of proceeds and the Group's future strategy are set out below.

The Debt Restructuring

Frontera Cayman has today commenced an exchange offer (the "Exchange Offer") to the holders of its US$120,763,445 10% convertible loan notes due in 2012 and 2013 (the "Old Notes"), pursuant to which the holders of the Old Notes are entitled to receive, at their option, either: (a) 15,417 Frontera Cayman Shares for every US$1,000 of Old Notes held (equivalent to a conversion at the Placing Price); (b) new 10% convertible loan notes due in 2016 (the "New Notes"); or (c) a combination of Frontera Cayman Shares and New Notes.

The New Notes will be structurally senior to the Old Notes and any Old Notes not tendered under the Exchange Offer will remain outstanding. The loan note conversion is conditional, inter alia, on acceptance of the Exchange Offer for Frontera Cayman Shares in respect of at least 75% of the Old Notes and the consent of the majority of the holders of each class of the Old Notes to adopting certain amendments to the note purchase agreements pursuant to which the Old Notes were issued by the Company.

Based on written and verbal commitments and indications of intent, the Directors believe that the holders of, in aggregate, at least US$91,115,696 of the Old Notes, representing approximately 75.4% of the total amount of outstanding Old Notes, will exchange Old Notes for Frontera Cayman Shares in the Exchange Offer. Spyros Karnessis and Stephen McGregor, members of the Board, beneficially holding an aggregate of US$14,686,439 of Old Notes, have committed to exchange at least 75% and 100%, respectively, of their Old Notes into Frontera Cayman Shares. In addition, a senior executive of the Company, holding US$1,448,298 of Old Notes has committed to exchange 100% of his Old Notes into Frontera Cayman Shares.

In addition to the Exchange Offer, Mr. Nicandros and another senior executive of the Group have entered into note exchange agreements (the "Note Exchange Agreements") to convert approximately US$8.4 million of loans to the Company, representing 100% of the total amount of indebtedness to management as at the date of this announcement, plus accrued and unpaid interest, into Frontera Cayman Shares at a conversion price per share equivalent to the Placing Price (the "Management Debt Conversion"). These loans were previously provided to the Company to support the Group's ongoing operational and working capital requirements. The amount includes any further loans by Mr. Nicandros to the Company prior to Admission, currently expected to amount to approximately US$500,000.

Frontera Cayman expects to issue a minimum of 1,404,719,039 Frontera Cayman Shares in the Exchange Offer, assuming 75.4% of Old Notes are exchanged for shares, and 129,031,219 Frontera Cayman Shares in the Management Debt Conversion. Of these shares, 323,964,695 are expected to be issued to Directors and a senior executive.

The loan note conversion resulting from the Exchange Offer, together with the Management Debt Conversion, will substantially reduce the Group's indebtedness and interest expense and are conditional, inter alia, on the other transactions contemplated by the Proposals becoming effective or not having been terminated and on Admission. Further details of the Debt Restructuring are set out in the Appendix.

Redomicile by way of the Merger

To facilitate both the Equity Fundraising and the SEDA, the Company is seeking shareholder consent to merge the Company with and into Frontera Cayman, a newly incorporated Cayman Islands exempted company. In order to qualify for an exemption from registration of the Merger under the US Securities Act, consent to the Merger will not be solicited from shareholders in the United States who are not accredited investors for purposes of Regulation D under the US Securities Act, as detailed in the Appendix.

The Merger becoming effective is subject to the satisfaction of certain conditions, including the approval of the Merger by the written consent of a majority of the Company's shareholders. Directors and management beneficially own approximately 54.7 million Frontera Delaware Shares, representing 40.4% of the outstanding shares, and intend to consent to the Merger.

The Merger will be effected pursuant to the provisions of and will have the effect provided by an agreement and plan of merger entered into today between the Company and Frontera Cayman (the "Merger Agreement"), the Delaware General Corporation Law and the Cayman Islands Companies Law. Pursuant to the Merger Agreement and applicable law, the Company will merge with and into Frontera Cayman, the corporate existence of Frontera Delaware will cease on the effective date of the Merger and Frontera Cayman will be the surviving corporation.

The result of the Merger is to effectively redomicile the Company into an offshore entity to more efficiently implement the Group's business plan. The Company was originally organised in the State of Delaware because this was considered to be the most appropriate location at the time to allow for effective capital expansion and management of the Company and its operations.

If approved, shareholders (other than certain US shareholders unable to accept shares in the Merger as set out in the Appendix) will receive one Frontera Cayman Share in exchange for every one existing Frontera Delaware Share.

Use of proceeds, RECENT OPERATIONAL HIGHLIGHTS and future strategy

Use of proceeds

The net proceeds of the Equity Fundraising and SEDA could provide up to approximately £26.8 million (US$43.5 million) of new funds for investment (approximately £5.3 million (US$8.5 million) after expenses from the Placing and up to approximately £21.5 million (US$35 million) from the SEDA). Initially, the net proceeds of the Equity Fundraising will be used to fund the commencement of the Group's next phase of planned development drilling campaigns, which are designed to increase oil and gas production and associated reserve bookings from the Shallow Fields Production Unit and the Taribani Field Unit. Assuming free cashflow from operations and/or availability of funds under the SEDA, the Group will continue to fund exploration drilling, at the Basin Edge Play Unit, as well as simultaneously advancing efforts to seek a strategic partner for ongoing exploration work associated with this asset. The Group will also continue the evaluation of the significant potential associated with the Shale Gas Play Unit.

Over the next 24 months, subject to the availability of the SEDA and the further matters referred to below, these work programs will include:

·; Shallow Fields Production Unit, Mtsare Khevi Field: Commencement of a twenty-well drilling program and the installation of infrastructure designed to enable and initiate gas sales from currently shut-in gas wells;

·; Shallow Fields Production Unit, Mirzaani Field: Commencement of a ten-well drilling program, the fracking of two existing wells, the workover and re-completion of another existing well, as well as the acquisition of new seismic data over the field;

·; Taribani Field Unit: Commencement of a thirteen-well program, including re-completion of three existing wells and drilling of ten new wells;

·; Basin Edge Play Unit: Completion of drilling operations at the existing Lloyd #1 well and the simultaneous advancement of efforts to conclude a strategic partnership for continued exploration; and

·; Shale Gas Play Unit: Continuation of laboratory and field studies to evaluate potential prospectivity and commencement of efforts to conclude a strategic partnership for exploitation.

The Directors believe that the Group's work programs and overall strategy represent an exciting development opportunity for the above-mentioned assets within its portfolio. In particular, the Directors believe that the country of Georgia offers an attractive business environment for oil and gas exploration and development, in light of the prevailing fiscal terms relating to the Production Sharing Agreement on Block 12 which include, inter alia, the absence of domestic caps on commodity prices or restrictions on oil exports. Also, the Group's assets are situated amongst a highly developed oil and gas transportation infrastructure, with three major oil and gas pipelines and a rail line passing through Block 12. In addition to the development work programs outlined above, the Directors further believe there is significant exploration upside potential on the Block 12 portfolio, with any such exploration being potentially funded by anticipated operating cash flow from production and cost recovery, and with a potential for farm-out opportunities and strategic partnership investments.

The Directors believe that successful completion of the above-mentioned work programs could lead to the potential increase in daily production from current levels of approximately 225 barrels per day to as much as approximately 3,300 barrels of oil equivalent per day by the end of the first 12 months, and as much as approximately 5,100 barrels of oil equivalent per day by the end of 24 months. On this basis, assuming a net back price of US$100 per barrel, the indicated revenues arising from these potential production increases, if achieved, would reach US$9.9 million by the end of the first year (US$50.4 million for the full year) after Admission and $15.1 million by the end the second year (US$156.7 million for the full year). In such a scenario, monthly operating cash flows would be expected to reach US$9.0 million by the end of the first year and US$14.0 by the end of the second year. (Note: These figures are based on the Company's internal estimates and numerous assumptions and have not been subject to external review or audit. These estimates constitute "forward-looking statements" as outlined previously in this announcement; actual outcomes are likely to vary materially from these estimates for the reasons outlined. These estimates do not constitute a revenue forecast and should not to be relied upon as such. The Group does not intend to comment further if there is any variation from these figures.)

In this context, the Directors anticipate the Group would be self-funding within two years from production revenues and cost recovery contribution, assuming completion of the Proposals and the results of the above-mentioned work programs being successful. New reserve reports are expected to be completed at milestone intervals throughout the planned work programs, and the Company is committed to completing an updated Competent Person's Report on the Group's assets within 12 months of Admission. It must be noted, however, that there is no guarantee that the above-mentioned work programs will be successful and that daily production levels will increase as anticipated.

In addition to funding ongoing oil and gas operations, the net proceeds will also be applied to settling cash consideration of up to approximately US$0.6 million payable to certain shareholders unable to accept Frontera Cayman Shares in the Merger, as detailed in the Appendix.

Implementation of the work programs outlined above assumes that sufficient funds will be available from a combination of the Equity Fundraising, the SEDA and operational cash flows. Frontera Cayman has entered into the SEDA, which may result in up to approximately £21.5 million (US$35 million) being available to it over a 36-month period and the drawdown of which is at Frontera Cayman's discretion, subject to certain conditions being satisfied from time to time. However, there can be no guarantee of the timing or availability of the drawdown of such funds. Further details regarding the SEDA and the conditions under which it is available are set out in the Appendix.

The availability of cash for investment generated from ongoing operations assumes positive outcomes from some of the planned drilling set out above. Operational developments may be more or less successful than planned and resulting cash flows may be greater than or less than currently anticipated. Accordingly, the Group may or may not have sufficient funds to complete all of the planned operations over the next 24 months.

If anticipated drawdowns of the SEDA are unavailable or are delayed, with only current resources and the new funds from the Equity Fundraising being available to the Group, the Directors intend to pursue the above-mentioned investment program on a lengthened timeline, while maintaining the same objectives. If this occurs, the Directors believe that successful completion of the planned work programs has the potential to increase daily production from current levels to as much as approximately 2,900 barrels of oil equivalent per day by the end of the first 12 months and as much as approximately 4,500 barrels of oil equivalent per day by the end of 24 months. It must be noted, however, that there is no guarantee that the above-mentioned work programs will be successful and that daily production levels will increase as anticipated.

Operational Update

As mentioned above, the Company has also today announced the Group's financial results for the year ended 31 December 2010, which included an update of its operations in Block 12 in the country of Georgia. Full details of this operational update are set out below:

Shallow Fields Production Unit

The Shallow Fields Production Unit is located in the central portion of Block 12 and represents what the Group believes to be an extensive trend of low-cost, low-risk oil and gas resources. The unit contains a number of known oil fields--Mirzaani, Mtsare Khevi, Nazarlebi, and Patara Shiraki--representing undeveloped or under-developed fields that have additional associated exploitation potential. The unit also contains an inventory of "look-alike" exploration prospects--the Kakabeti, Lambalo, Mkralihevi, Mlashiskhevi-Oleskhevi and Tsitsmatiani prospects--each of which contains Soviet-era wells that had hydrocarbon shows while drilling but were never placed on production or adequately appraised. Reservoir objectives are the well-known, regional clastic reservoirs of Pliocene and Miocene age, situated at depths from 10 meters to 1,500 meters.

Mirzaani Field

Field operations have been focused on maintaining oil production from the numerous low-productivity wells in the historically developed portion of the Mirzaani Field, which has produced 7 million barrels of oil since 1932, and is currently producing 70 to 90 barrels of oil per day from a total of 119 wells. Meanwhile, the Group continues to evaluate results from its recent drilling operations, which discovered significant northwest (up-dip) and southeast (down-dip) extensions to the field. Ongoing analysis of results from the Mirzaani #1, #2 and #5 wells confirms the attractiveness of frac completions, which are expected to maximize production rates and enhance the economic value of the field.

A successful multi-zone frac completion of the Mirzaani #5 well was conducted by Schlumberger in 2010, targeting the Pliocene (Shiraki Formation) reservoir Zones 13 and 16/17, at depths of 897-909 and 1,057-1,075 meters. Production testing of these co-mingled zones initially yielded oil at more than 100 barrels of oil per day, although increasing water production, probably from the deepest horizon, began to impair oil production and the well was temporarily suspended. A "bridge plug" will be installed to isolate the lower water zone which should allow production to resume. Based on results observed to date, 10 new well locations have been identified for exploitation of the undeveloped, up-dip northwest area of the Mirzaani field.

The Mirzaani Field is now recognised to be a large accumulation with over 500 million barrels "original oil in place" (OOIP) (gross best estimate numbers) independently assessed by Netherland Sewell & Associates ("NSA") in 2010. Primary recovery factors are, however, quite low in the mainly low pressure reservoirs (around 10%), and NSA have assigned 17.9 million barrels as Best Estimate gross Contingent Resources for the main part of the field, with an additional 25.9 million barrels as the Best Estimate gross Prospective Resources (unrisked) in the northwest field extension area, which appears to be significantly higher pressure. The Group holds a 100% working interest in the field.

Mtsare Khevi Field

The Mtsare Khevi Field is located in the western portion of Block 12, with multiple Upper Pliocene sandstone reservoirs of the Akchagil formation situated at depths between 200 and 1,100 meters. A large number of shallow wells were drilled following field discovery in the 1960's, although there was very little production. Five wells were known to be on production during 1989 to 1994, but there has never been a coherent development plan for the field and total production is reported to be less than 30,000 barrels. Some gas is present in the field, mainly on the crest although there is no clearly defined gas cap.

Since 2008, the Group has been implementing a re-development plan designed to bring the field back to significant production levels. A well workover program was followed by a total of 18 new wells drilled into the Akchagil reservoir, and frac completions have been used to improve well deliverability. A program to install Progressive Cavity pumps in the field, replacing the traditional sucker rod pumps, was completed in March 2011 and early results show a reduction in downtime and operating costs. Current production is around 90 barrels of oil per day from a total of 14 wells. Twenty new well locations have been identified, targeting both oil and gas reservoirs and providing for some pressure support through three proposed water injection wells. A previously disclosed infrastructure project designed to initiate gas sales from shut in wells within the field is now on track for implementation.

The NSA (2010) independent assessment identifies approximately 15 million barrels of OOIP and 2.6 billion cubic feet of original gas in place (OGIP) in the field (gross Best Estimate numbers). Primary oil recovery is again quite low, although gas recovery of about 60% is anticipated; NSA accordingly assigns 1.4 million barrels and 0.516 billion cubic feet as Best Estimate gross Contingent Resources, with an additional 0.7 million barrels and 1.017 billion cubic feet as the Best Estimate gross Prospective Resources (unrisked) in the northwest part of the field which is thought to be prospective mainly for gas.

These assessments are generally consistent with the Group's internal estimates for the Akchagil formation, although the Group's estimates reflect additional resource potential along the northwest trend of the fault block, which NSA was not asked to evaluate.

Taribani Field Unit

The Taribani Field is a large, under-developed oil field covering an area of approximately 80 square kilometers on the southern side of Block 12, with up to 12 productive horizons situated in Pliocene and Miocene age reservoirs at depths between 2,200 and 3,500 meters. The field, which has been known since the 1930s, has been penetrated by 41 wells drilled during the Soviet era, but production has been very poor due to inadequate drilling and completion practices. Around 550,000 barrels have been produced from the field to date; current production is 38 barrels of oil per day from 5 wells.

The Group has acquired a significant seismic database over the field, including 2D and 3D data, and has drilled three new wells in the field as the initial steps in its re-development of this asset. The Dino #2 and T #45 wells were originally completed with first-generation fracs in the field, and these results along with analysis of more recent frac results from the nearby Mirzaani Field, have resulted in the re-design of future frac completions for the Taribani Field. Ten new well locations have been identified for the next campaign of development drilling, along with the re-entry and recompletion of the three Frontera-drilled wells, targeting reservoir Zones 9, 14 and 15.

Taribani is known to be a very large oil accumulation with around 788 million barrels OOIP independently assessed by NSA (2005) for Zones 9, 14, 15 and 19. Recoveries are expected to be somewhat higher in these deeper reservoirs and NSA assigns a 15% recovery factor giving "Technical Possible Reserves" of 118 million barrels for the field, contingent upon declaration of commerciality and approval of a development plan, among other factors. An additional 36 million barrels are assessed as unrisked Prospective Resources in five deeper zones in the field.

Basin Edge Play Unit

Ongoing analysis has continued associated with a recent remapping project relating to the Basin Edge "A", "B" and "C"prospects. Of note, relating to this analysis, new well locations have been identified for the continued future appraisal and exploration of these prospects. Additionally, an effort is underway to seek a strategic partner for the continuation of exploration efforts.

The Basin Edge Play Unit is located along the northern border of Block 12 and represents what the Company believes is one of the newest and potentially most prolific exploration plays in the Upper Kura Basin, with very large potential structures in Cretaceous carbonate reservoirs. In 2005, NSA estimated total unrisked prospective resource potential to be in excess of 680 million barrels within the primary Cretaceous and secondary Miocene (Sarmatian) reservoir targets of two major prospects in the play ("B" and "C").

Shale Gas Play Unit

Since the completion of a study last year that resulted in the identification of significant liquids and gas prospectivity associated with the Maykop shales within Block 12, work has continued to advance this opportunity. Work to date has resulted in the identification of a prospective area encompassing approximately 2,000 square kilometers where potentially significant quantities of natural gas and liquids could be exploited from the regionally present Oligocene-Lower Miocene age Maykop shales and Mesozoic age Liassic shales. Potentially similar to extensive natural gas shale plays in North America and Europe, study work to further define the play's prospectivity continues. The Group's internal estimates indicate over 1 trillion cubic feet of recoverable gas reserves and up to 500 million barrels of oil potential associated with the play. The next phase of planned work includes an independent assessment of these internal prospectivity estimates.

Working capital and financial position

The Group's consolidated financial statements for the fiscal year ending 31 December 2010, as released today in a separate announcement, contain an explanatory paragraph regarding the Company's ability to continue as a going concern in the report of the independent auditors. The Directors believe the completion of the Proposals together with funds provided by the SEDA and realisation of successful outcomes from the Group's current operating plan outlined above will address its ability to continue as a going concern.

The Group has incurred net losses and negative cash flows from operations in most fiscal periods since inception. Based on the Group's current operating plan and as outlined in the Company's financial results, if the Proposals are not successfully completed and additional sources of financing are not otherwise made available to the Group, its existing working capital will not be sufficient to meet the cash requirements to fund the Group's planned operating expenses and capital expenditures through to 31 December 2011.

In the event the Proposals are not completed, the Directors plan to further reduce costs and seek other sources of financing. However, failure to generate sufficient operating cash flows, raise additional capital or further reduce spending will have a material adverse effect on the Group's ability to continue as a going concern and to achieve its intended business objectives. There can be no assurance that sufficient revenues will be generated in the future to sustain the Group's operations.

Notwithstanding the Directors' plan to reduce costs and raise additional financing in the event the Proposals are not successfully completed, the Group's viability is dependent upon producing oil and gas in sufficient quantities and marketing such oil and gas at sufficient prices to provide positive operating cash flow to the Group. The Group is solely responsible for providing all of the funding for the development of Block 12 in Georgia and will require additional funding in order to obtain certain levels of production and generate sufficient cash flows to meet future capital and operating spending requirements. This is dependent upon, among other factors, achieving significant increases in production, production of oil and gas at costs that provide acceptable margins, reasonable levels of taxation from local authorities, and the ability to market the oil and gas produced at or near world prices.

The Directors' plan for addressing the above uncertainties is partially based on forward looking events which have yet to occur, including the completion of a successful development program, and accordingly, there is no assurance that those events will transpire as initially contemplated.

Related Party Transactions

Spyros Karnessis and Stephen McGregor, members of the Board, are beneficial holders of, in aggregate, US$14,686,439 principal amount of Old Notes and have agreed to exchange at least 75 and 100%, respectively, of their beneficial holdings for Frontera Cayman Shares in the Exchange Offer. Steve Nicandros, Chairman of the Board and Chief Executive Officer, is the beneficial holder of US$6,190,000 principal amount in loans to the Company as at 21 June 2011 and has agreed to convert 100% of his beneficial holding into Frontera Cayman Shares at the Placing Price in the Management Debt Conversion plus expected additional loans prior to admission of US$500,000 and accrued interest. In addition, as mentioned above, an entity associated with Mr. Nicandros has agreed to subscribe in the aggregate for 30,833,745 Frontera Cayman Shares at the Placing Price pursuant to a subscription agreement.

The transactions described above are all classified as related party transactions in accordance with the AIM Rules. Accordingly, the independent directors, being Luis Giusti and Andrew Szescila, having consulted with Strand Hanson, the Company's nominated adviser, consider the terms of these transactions to be fair and reasonable insofar as the Company's shareholders are concerned. In providing its advice, Strand Hanson has taken into account the independent directors' commercial assessments.

Admission to AIM of Frontera Cayman

The Merger requires the cancellation of admission to trading on AIM of the Frontera Delaware Shares and application for the admission of the entire issued share capital of Frontera Cayman. Accordingly, the Company hereby gives notice of the intended cancellation of admission of the Frontera Delaware Shares to trading on AIM, subject to the approval by shareholders of the Company of the Merger and the Merger becoming effective. Application will be made for the admission of the entire issued share capital of Frontera Cayman to be admitted to trading on AIM under the symbol "FRR", comprising the Frontera Cayman Shares issued pursuant to the Proposals, as well as Frontera Cayman Shares issued to advisers prior to Admission in lieu of cash fees.

Cancellation of the Company's admission to trading on AIM is expected to take place at 7.00 a.m. on 2 August 2011 and Admission of Frontera Cayman to trading on AIM is expected to take place at 8.00 a.m. on 2 August 2011. The requirements for Admission include, inter alia, the production of an admission document prepared in accordance with AIM Rules, which will be published by Frontera Cayman prior to Admission. An announcement will be made once the admission document is available.

Legislative changes as a RESULT OF THE MERGER

The Merger will result in a change in the legal and regulatory jurisdiction in which the holding company of the Group is located and the laws and regulations to which it is subject, including changes as a result of adopting different constitutional documents which will be subject to the laws of the Cayman Islands (save for the AIM Rules which, following Admission, will apply to Frontera Cayman). Shareholders should consult their own legal and tax advisers with respect to the legal and tax consequences of the Merger in their particular circumstances.

If you reside in the United Kingdom you are recommended to seek your own personal financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the FSMA, or if you reside outside the United Kingdom from another appropriately authorised independent financial adviser. 

Expected Timetable of Principal Events AND PROPOSAL STATISTICS

Expected Timetable of Principal Events

All references to times and dates in this announcement are to UK time unless otherwise stated.

Share Capital- Proposal Statistics

Notes:

1. As at 27 June 2011 (being the latest practicable date prior to the publication of this announcement).

2. Assuming issuance of 4 million Frontera Delaware Shares to a former Director of the Company prior to the Merger becoming effective and that the issued share capital of Frontera Delaware otherwise remains unchanged prior to the Merger becoming effective.

3. Including 14,260,862 Frontera Cayman Shares issued to certain advisers in lieu of cash fees in the Placing.

4. Assuming 75.4% of the Old Notes are exchanged for Frontera Cayman Shares in the Exchange Offer, based on principal amount at 30 June 2011. In the event that 100% of the Old Notes are exchanged for Frontera Cayman Shares the number of Frontera Cayman Shares issued pursuant to the Exchange Offer will be 1,861,794,605.

5. Based on principal plus accrued interest as at 21 June 2011 (being the latest practicable date prior to the publication of this announcement) and the estimated amount of additional loans prior to Admission, totaling approximately $8.4 million.

6. Based on an implied placing price of US$0.065 per Frontera Cayman Share (US$1.6216 per £1).

7. Including 11,550,211 warrants expected to be issued to certain advisers in connection with the Placing.

APPENDIX

Further information on the Proposals and the SEDA

The Equity Fundraising

The Equity Fundraising comprises the Placing and the Subscription. The total proceeds of the Equity Fundraising will be £6.8 million (US$11.0 million) before expenses and £5.3 million (US$8.5 million) after cash expenses of approximately US$2.5 million, of which US$0.9 million has been reinvested in the Placing.

Frontera Cayman has entered into the Placing Agreement with Strand Hanson, as nominated adviser, Arbuthnot Securities Limited ("Arbuthnot") and Old Park Lane Capital Plc ("OPL") (Arbuthnot and OPL together, the "Placing Agents") pursuant to which, the Placing Agents have agreed to use their reasonable endeavours to procure subscribers for 115,678,351 Frontera Cayman Shares at a price of 4 pence per share, raising total gross proceeds of £4.6 million (US$7.5 million) before expenses. Net proceeds of the Placing will be £3.1 million (US$5.0 million). The Frontera Cayman Shares to be issued in the Placing include 14,260,862 shares to be issued to certain advisers to Frontera Cayman that have agreed to receive Frontera Cayman Shares in lieu of fees.

The Placing is conditional, inter alia, on the other transactions contemplated by the Proposals becoming effective or not having been terminated (including the SEDA not having been terminated) and on Admission having occurred by 8:00 a.m. on 2 August 2011, or such later time or date as the Company, the Placing Agents and Strand Hanson may agree, but not later than 5:00 p.m. on 31 August 2011.

The Placing Agreement contains, inter alia, customary undertakings, indemnities and warranties given by Frontera Cayman in favour of the Placing Agents and Strand Hanson. The Placing Agents and Strand Hanson may terminate the Placing Agreement in certain specified circumstances prior to the Merger becoming effective including, inter alia, if Frontera Cayman is in material breach of the Placing Agreement, Strand Hanson or the Placing Agents become aware of any circumstance which results in or is reasonably likely to result in a material breach of the warranties given under the Placing Agreement, or if an event of force majeure has occurred. The Placing Agreement is governed by English law. 

All of the Frontera Cayman Shares to be sold pursuant to the Placing will only be offered, or solicitations to subscribe for Frontera Cayman Shares pursuant to the Placing will only be made:

As part of the Equity Fundraising, Frontera Cayman has entered into the Subscription Agreements with Mr. Nicandros and with another senior executive of the Group (the "Participating Affiliates"), pursuant to which the Participating Affiliates have agreed to purchase an aggregate of 53,959,053 Frontera Cayman Shares at the Placing Price, raising approximately £2.2 million (US$3.5 million). These Frontera Cayman Shares will be subscribed for pursuant to an agreement directly with Frontera Cayman, without the participation of the Placing Agents, and will be sold pursuant to the exemption from registration under the US Securities Act by virtue of Section 4(2) of the US Securities Act and Regulation D thereunder. 

The Subscription Agreements contain, among other things, customary representations and warranties by the Participating Affiliates relating to their status as accredited investors as defined in Rule 501 of Regulation D, and with respect to their intent to purchase the Frontera Cayman Shares under the Subscription Agreements for their own accounts and not with a view to the redistribution thereof in violation of the US Securities Act. The Subscription Agreements also contain an indemnity in favor of Frontera Cayman for any damages Frontera Cayman may incur as a result of the breach of the Subscription Agreements by the Participating Affiliates or due to the inaccuracy of any representation or warranty by the Participating Affiliates contained in the Subscription Agreements.

The obligations of the Participating Affiliates to purchase Frontera Cayman Shares pursuant to the Subscription Agreements are conditional upon, inter alia, the Merger becoming effective in accordance with the terms of the Merger Agreement and Admission. The Subscription Agreements are governed by the laws of the Cayman Islands.

The Frontera Cayman Shares issued under the Equity Fundraising will be issued credited as fully paid and will rank pari passu in all respects with the shares arising or issued pursuant to the other Proposals including the right to receive and retain all dividends and other distributions declared, paid or made in respect of the Frontera Cayman Shares after Admission.

The Debt Restructuring

Subject to certain conditions, Frontera Cayman is offering to purchase any and all of the outstanding Old Notes for consideration payable in the form of Frontera Cayman Shares, New Notes or a combination thereof. Holders of Old Notes may tender such Old Notes in exchange for either:

(a) 15,417 Frontera Cayman Shares for each US$1,000 principal amount of Old Notes (equivalent to a conversion price of US$0.065 (£0.04 per share) tendered for exchange (the "Frontera Cayman Share Payment");

(b) US$1,000 principal amount of New Notes for each US$1,000 principal amount of Old Notes tendered for exchange; or

(c) any combination thereof.

The New Notes will:

(a) be issued by Frontera Resources Holdings, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Frontera Cayman to be formed before the closing of the Exchange Offer (the "New Notes Issuer");

(b) be structurally senior to the Old Notes (because the New Notes Issuer is a wholly-owned subsidiary of Frontera Cayman and the parent of the Frontera Group's operating subsidiaries, and restrictions in the new note purchase agreement prohibit the New Notes Issuer from transferring funds to Frontera Cayman, other than for general and administrative costs and debt service requirements);

(c) bear interest at the rate of 10% per annum;

(d) mature on 31 July 2016; and

(e) be convertible into Frontera Cayman Shares at the option of the holder at the rate of 4,000 Frontera Cayman Shares for each US$1,000 principal amount converted (equivalent to a conversion price of US$0.25 per share).

The Frontera Cayman Share Payment, the New Notes Payment or the combination thereof paid to a tendering Holder is referred to herein as the "Exchange Payment."

The Exchange Payment will include accrued and unpaid interest from the last interest payment date up to, but not including, the Settlement Date (as defined below), and will be payable in the form of additional Frontera Cayman Shares, New Notes, or a combination thereof on the Settlement Date according to the tendering Old Note holder's election with respect to the Exchange Payment.

Holders of Old Notes who validly tender and do not validly withdraw their Old Notes pursuant to the Exchange Offer at or before the Expiration Time (as defined below) will receive on the Settlement Date, following the satisfaction or waiver of the conditions to the Exchange Offer and subject to the terms and conditions of the Exchange Offer, the Exchange Payment for which such holder has elected.

The Exchange Offer is being made in conjunction with the Merger. Upon consummation of the Merger, any Old Notes that remain outstanding will be obligations of Frontera Cayman as successor to Frontera Delaware.

Completion of the Exchange Offer is subject to the following conditions:

(a) the Merger becoming effective;

(b) at least 75% of the aggregate principal amount of the Old Notes being tendered in exchange for the Frontera Cayman Shares;

(c) the consent of the requisite holders of the Old Notes to the adoption of certain amendments to the Old Note Purchase Agreements;

(d) the Placing Agreement and the Subscription Agreements not having been terminated;

(e) the SEDA not having been terminated;

(f) the Note Exchange Agreements not having been terminated; and

(g) Admission taking place in accordance with the AIM Rules.

If the Exchange Offer is terminated or otherwise not completed, the Exchange Payment will not be paid or become payable to holders of Old Notes who have validly tendered Old Notes in connection with the Exchange Offer.

By tendering Old Notes for an Exchange Payment, the holder of the tendered Old Notes will also irrevocably consent to the amendments to the Old Note Purchase Agreements.

The Exchange Offer will commence on 28 June 2011 and will expire at 5:00 p.m., Houston time, on 26 July 2011, unless extended or earlier terminated by Frontera Cayman (the "Expiration Time").

The "Settlement Date" for the Exchange Offer is expected to be five Houston, Texas business days following the Expiration Time. Frontera Cayman may, at its sole discretion, accelerate or extend the Settlement Date. No tender is valid if submitted after the Expiration Time.

In addition to the Exchange Offer, the Participating Affiliates have entered into the Note Exchange Agreements to convert approximately US$8.4 million of loans to the Company, representing 100% of the outstanding principal amount of indebtedness due to management as 21 June 2011 of US$7,570,000, plus accrued and unpaid interest and anticipated additional loans prior to Admission, into Frontera Cayman Shares at a conversion price per share equivalent to the Placing Price.

The Note Exchange Agreements contain, among other things, customary representations and warranties given by the Participating Affiliates relating to their status as accredited investors as defined in Rule 501 of Regulation D, and with respect to their intent to purchase the Frontera Cayman Shares under the Note Exchange Agreements for their own accounts and not with a view to the redistribution thereof in violation of the US Securities Act. The Note Exchange Agreements also contain an indemnity in favor of Frontera Cayman for any damages Frontera Cayman may incur as a result of the breach of the Note Exchange Agreements by the Participating Affiliates or due to the inaccuracy of any representation or warranty by the Participating Affiliates contained in the Note Exchange Agreements.

The obligations of the Participating Affiliates to purchase Frontera Cayman Shares pursuant to the Note Exchange Agreements are conditioned upon, inter alia, the Merger becoming effective in accordance with the terms of the Merger Agreement and Admission. The Note Exchange Agreements are governed by the laws of the Cayman Islands.

An offer to purchase in connection with the Exchange Offer, letters of transmittal and other Exchange Offer materials are being distributed to holders of the Old Notes today, in which the terms of the Exchange Offer are described in full. The offer to purchase and letters of transmittal contain detailed procedures for tendering and withdrawing the Old Notes, the manner in which such securities will be accepted by Frontera Cayman for payment, risk factors and a discussion of certain United States federal income tax considerations of the Exchange Offer. Holders of the Old Notes are highly encouraged to carefully read the offer to purchase and related materials, as they contain important information that holders of Old Notes should consider before making any decision with respect to the Exchange Offer.

Additional copies of the offer to purchase, related letters of transmittal and other Exchange Offer materials governing the Exchange Offer may be obtained at the Company's expense by contacting Liz Williamson, Vice President, Investor Relations and Corporate Communications, by telephone at (713) 585-3216 or by e-mail at lwilliamson@fronteraresources.com.

Computershare Trust Company, N.A., the depositary and exchange agent for the Exchange Offer, may be contacted by telephone at (781) 575-4154, by fax at (781) 575-2420, or by overnight mail or courier at 250 Royall Street, Canton, MA 02021.

Redomicile by way of Merger

Frontera Delaware and Frontera Cayman have entered into the Merger Agreement, pursuant to which Frontera Delaware will merge with and into Frontera Cayman, with Frontera Cayman being the surviving company.

The Merger will be effected pursuant to the provisions of and will have the effect provided by the Merger Agreement, the Delaware General Corporation Law and the Cayman Islands Companies Law. Pursuant to the Merger Agreement and applicable law, the Company will merge with and into Frontera Cayman, the corporate existence of Frontera Delaware will cease on the effective date of the Merger and Frontera Cayman will be the surviving corporation. It is expected that the Merger will become effective on 1 August 2011.

The Merger requires the written consent of holders of a majority of the issued and outstanding Frontera Delaware Shares as of 28 June 2011, the record date for determining shareholders entitled to act in connection with the Merger. Following receipt of shareholder approval of the Merger, and fulfillment of the requisite conditions to the Merger set out below, Frontera Delaware will be merged with and into Frontera Cayman.

By operation of the Merger, each outstanding Frontera Delaware Share on the date the Merger becomes effective will be converted into and represent the right to receive either (a) one Frontera Cayman Share (the "Frontera Cayman Share Consideration") or (ii) an amount, in cash in respect of each Frontera Delaware Share held, equal to the Placing Price (the "Cash Consideration"), as more fully described below. All holders of Frontera Delaware Shares will receive the Frontera Cayman Share Consideration in the Merger, except for US Shareholders who are not "accredited investors" (as defined in Rule 501 of Regulation D under the US Securities Act), who will receive the Cash Consideration.

To comply with the requirements of Regulation D under the US Securities Act, Frontera Delaware is not soliciting consents to the Merger from any US shareholder who is not an accredited investor. Non-accredited US shareholders will receive the Cash Consideration rather than the Frontera Cayman Share Consideration in the Merger. The Directors estimate that approximately 9 million Frontera Delaware Shares are held by non-accredited US shareholders, which is equal to approximately 6.7% of the issued and outstanding Frontera Delaware Shares based on Frontera Delaware's share register on 22 June 2011 (the latest practicable date prior to publication of this announcement) and the Director's belief regarding the status of certain US shareholders. Therefore, aggregate Cash Consideration to be paid as a result of the Merger is expected to be approximately US$0.6 million.

The Merger and the Merger Agreement are conditional upon:

(a) the Merger and the Merger Agreement being approved by a majority of the holders of Frontera Delaware Shares;

(b) at least 75% of the holders of the Old Notes having tendered their Old Notes for Frontera Cayman Shares in connection with the Exchange Offer and the Exchange Offer not having been terminated;

(c) the consent to the adoption of certain amendments to the Old Note Purchase Agreements, which requires the affirmative vote of 50% of the issued and outstanding Old Notes issued under the applicable Old Note Purchase Agreements, in each case excluding therefrom Old Notes held by the Company or its affiliates;

(d) the Placing Agreement not having been terminated;

(e) the Subscription Agreements not having been terminated;

(f) the SEDA not having been terminated;

(g) the Note Exchange Agreements not having been terminated; and

(h) Strand Hanson having confirmed to the Company that the London Stock Exchange will issue a stock notice with respect to the trading of the cessation of Frontera Delaware Shares on AIM.

From the effective date of the Merger, the Memorandum and Articles of Association of Frontera Cayman which are in place immediately before the date of the Merger will continue to be the Memorandum and Articles of Association of the surviving corporation.

Upon consummation of the Merger, all assets, liabilities, properties, corporate acts, plans, policies, contracts, approvals and authorisations of each of Frontera Delaware and Frontera Cayman and their respective shareholders, boards of directors, committees elected or appointed thereby, officers and agents, which were effective immediately before the date of the Merger, will be vested in, assumed by or taken, as applicable, for all purposes as the acts, plans, policies, contracts, approvals and authorisations of Frontera Cayman and shall be effective and binding on Frontera Cayman in the same manner as they were with respect to Frontera Delaware or Frontera Cayman, as the case may be, before the Merger becoming effective.

The directors of Frontera Cayman are the same as those of Frontera Delaware and upon the Merger becoming effective they will continue to be the same.

Pursuant to the Merger Agreement, the date and time on which it is intended that the Merger is to take effect will be (subject to the satisfaction of the conditions to the Merger) the date of filing of the Merger Agreement with the Registrar of Companies in the Cayman Islands (the " Cayman Registrar"), being the date on which the applicable merger documents are to be registered by the Cayman Registrar to consummate the Merger, or on any such subsequent date as Frontera Delaware and Frontera Cayman may agree and specify to the Cayman Registrar in accordance with Cayman Islands law upon the filing of the Merger Agreement with the Cayman Registrar. The Merger Agreement is governed by the laws of the State of Delaware.

Cancellation of Frontera Delaware Share certificates

Upon completion of the Merger, all share certificates representing the Frontera Delaware Shares in certificated form will thereafter represent the right to receive certificates representing Frontera Cayman Shares, except that the holdings of Non-Accredited US Shareholders will represent the right to receive the Cash Consideration. Holders holding share certificates representing Frontera Delaware Shares who wish to receive a certificate representing their Frontera Cayman Shares must first surrender their Frontera Delaware Share certificates. New share certificates will be delivered representing Frontera Cayman Shares following surrender of share certificates representing Frontera Delaware Shares as follows.

(a) Share certificates issued to US Shareholders will bear a restrictive legend to the effect that such shares have not been registered under the US Securities Act or any state securities laws, and may be transferred only pursuant to an exemption from the registration requirements of the US Securities Act and applicable state securities laws; and

(b) Share certificates issued to non US Shareholders will not bear a restrictive legend.

US Shareholders who are Qualified Institutional Buyers as defined in Rule 144A under the US Securities Act, and who execute and deliver to Frontera Cayman a Qualified Institutional Investor representation letter pursuant to which they agree to certain restrictions on the transfer of their Frontera Cayman Shares, will receive Frontera Cayman Shares without a restrictive legend.

CREST and Depositary Interests

CREST is a paperless settlement procedure through which uncertificated securities may be transferred electronically in accordance with the CREST Regulations. Frontera Delaware Shares and Frontera Cayman Shares cannot be held and settled in CREST, because companies incorporated in those countries are ineligible to participate in CREST. However, depositary interests ("DIs") representing Frontera Delaware Shares and Frontera Cayman Shares can participate in the CREST system. A holder of Frontera Cayman Shares who desires to participate in CREST can do so by depositing its Frontera Cayman Shares with a depositary in exchange for DI's that are eligible for CREST participation as described more fully below.

Frontera Cayman will put in place depositary arrangements to allow holders of Frontera Cayman Shares to hold and settle their Frontera Cayman Shares in CREST in the form of dematerialised DIs. DIs represent entitlements to underlying Frontera Cayman Shares. The Depositary records the interests of each Depositary Interest holder on the Depositary Interest Register. Shareholders who currently hold DIs representing their Frontera Delaware Shares will, following the Merger, receive DIs representing an equivalent number of Frontera Cayman Shares. The DIs representing Frontera Delaware Shares, if any, will cease to exist.

Under the depositary arrangements, Computershare Investor Services plc (the "Depositary") will hold the relevant Frontera Cayman Shares as trustee for those holders who wish to hold and settle their interests in Frontera Cayman Shares through CREST (in accordance with the terms of the DI deed which governs the relationship between the Depositary and the DI holders). The Depositary will issue DIs to such holders. The DIs will be settled and transferred through CREST in a process facilitated by the Depositary. The Frontera Cayman Shares themselves will at no time be admitted to CREST and the Depositary (through its custodian, Computershare Company Nominees Limited) will be recorded in the Frontera Cayman Register as the legal owner of those shares.

Transfers of DIs are likely to be subject to SDRT, as appropriate in the normal way.

CREST is a voluntary system and holders of Frontera Cayman Shares who wish to hold their Frontera Cayman Shares in certificated form will be able to do so.

Overseas Shareholders

The implications of the Merger for persons resident in, or citizens or nationals of, jurisdictions outside the United Kingdom, Georgia or the Cayman Islands, ("Designated Foreign Shareholders") may be affected by the laws of the relevant jurisdictions. Such Designated Foreign Shareholders should inform themselves about and observe all applicable legal requirements.

Shareholders must satisfy themselves as to their full observance of the laws of the relevant jurisdiction in connection with the Merger, including the obtaining of any governmental, exchange control or other consents that may be required, and compliance with other necessary formalities that are required to be observed and the payment of any issue, transfer or other taxes due in such jurisdiction.

If, in respect of any Designated Foreign Shareholders, Frontera Cayman is advised that the issuance of Frontera Cayman Shares would or might infringe the laws of any Designated Foreign Jurisdiction, or would or might require Frontera Cayman to obtain legal advice or any governmental or other consent or effect any registration, filing or other formality with which, in the opinion of Frontera Cayman, it would be unable to comply or that it regards as unduly onerous, Frontera Cayman may determine either:

(a) that Designated Foreign Shareholder's Frontera Cayman Shares shall be issued to such Designated Foreign Shareholder or to a nominee for such Designated Foreign Shareholder appointed by Frontera Cayman and then sold on such holder's behalf, with the net proceeds of sale being paid to the Designated Foreign Shareholder; or

(b) make a cash payment to the Designated Foreign Shareholder in respect of such Designated Foreign Shareholder's Frontera Cayman Shares or enter into such other arrangement with such Designated Foreign Shareholder as it deems fit.

Designated Foreign Shareholders should consult their own legal and tax advisers with respect to the legal and tax consequences of the Merger in their particular circumstances.

If you are a Designated Foreign Shareholder and want to hold Frontera Cayman Shares upon completion of the Merger, you are requested to advise Frontera Cayman of an alternative address for you in the United Kingdom, the Cayman Islands or another jurisdiction outside of the United States, as soon as possible and in any event before the date the Merger becomes effective. If you fail to do this, and the Merger becomes effective, the Frontera Cayman Shares to which you would have been entitled may, at the discretion of Frontera Cayman, be sold and the net proceeds of sale paid to you.

United States Shareholders

The Frontera Cayman Shares and DIs have not been, and will not be, registered under the US Securities Act, or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be transferred except pursuant to an exemption from the registration requirements of the US Securities Act.

The distribution of Frontera Cayman Shares in exchange for Frontera Delaware Shares held by US persons in the Merger will constitute an offering of securities in the United States under the US Securities Act, and therefore, requires registration under US Securities Act and applicable state securities laws or an exemption from registration. Therefore, Frontera Delaware is conducting the Merger pursuant to the exemption from registration under Section 4(2) of the US Securities Act and Rule 506 of Regulation D thereunder. Under Rule 506 of regulation D, the Merger will be exempt from registration under the US Securities Act if all the conditions of Regulation D are satisfied. Those conditions include, among other things, that Frontera Delaware not make a sale of Frontera Cayman Shares to more than 35 Non-Accredited US Shareholders.

To comply with the requirements of Regulation D, Frontera Delaware is not soliciting consents to the Merger from any US Shareholder who is not an accredited investor as defined in Regulation D. Non-Accredited US Shareholders will receive the Cash Consideration rather than Frontera Cayman Share Consideration in the Merger.

The Frontera Cayman Shares issued to US Shareholders in the Merger will be restricted securities for purposes of Rule 144 under the US Securities Act. Therefore, the Frontera Cayman Shares issued to US Shareholders in the Merger will be subject to a one-year holding period before such US Shareholders can trade them under Rule 144.

(a) US Shareholders who receive Frontera Cayman Share Considerationin the Merger will receive certificates representing the Frontera Cayman Shares bearing a restrictive legend to the effect that such Frontera Cayman Shares have not been registered under the US Securities Act or any state securities laws, and may be transferred only pursuant to an exemption from the registration requirements of the US Securities Act and applicable state securities laws. In order to transfer these restricted shares, holders may be required to provide Frontera Cayman with a legal opinion, in form and substance satisfactory to Frontera Cayman and its counsel, that registration of the transfer is not required.

(b) The DIs currently representing Frontera Delaware Shares will be canceled and the holders thereof will receive new DIs representing their Frontera Cayman Shares.

(c) Non-US Shareholders will receive Frontera Cayman Shares without a restrictive legend.

(d) US Shareholders who: (i) receive Frontera Cayman Share Consideration; (ii) are Qualified Institutional Buyers as defined in Rule 144A under the US Securities Act; and (iii) execute and deliver to Frontera Cayman a Qualified Institutional Investor representation letter, pursuant to which they agree to certain restrictions on the transfer of their Frontera Cayman Shares, will receive Frontera Cayman Shares without a restrictive legend.

All Frontera Cayman Shares issued without a restrictive legend may be deposited with Computershare Investor Services plc in exchange for DIs.

The Cash Consideration payable to Non-Accredited US Shareholders shall be paid by Computershare Investor Services (Jersey) Limited by cheque sent to the address of such Non-Accredited US Shareholder as listed on the stock register of Frontera Delaware or, if different, the principal residence supplied by such Non-Accredited US Shareholder on its letter of transmittal, as described below.

Shareholders who are citizens or residents of the United States should consult their own legal and tax advisers with respect to the legal and tax consequences of the Merger in their particular circumstances.

Procedures for receiving Merger consideration

Upon consummation of the Merger, Frontera Delaware will be merged with and into Frontera Cayman, and Frontera Delaware will cease to exist. Thereafter, the former Frontera Delaware Shares will evidence the right to receive either the Frontera Cayman Share Consideration or the Cash Consideration, as applicable.

All Frontera Delaware Shares held as depositary interests in CREST will automatically be converted into Frontera Cayman Shares and will be listed on the Frontera Cayman Register of Members without further action of the shareholders.

Promptly following the date the Merger becomes effective, the Company will send to all former Frontera Delaware shareholders who hold physical Frontera Delaware Share certificates, and all US holders, a letter of transmittal to be used in connection with the delivery of the Merger consideration. In the letter of transmittal, former Frontera Delaware shareholders will be asked to supply Frontera Delaware with certain information concerning the issuance and delivery of their Frontera Cayman Share certificates. In addition, US Shareholders will be asked to certify whether they are accredited investors as defined in Regulation D under the US Securities Act.

Former Frontera Delaware shareholders who hold Frontera Delaware Share certificates must complete and submit a letter of transmittal and deliver it to Frontera Cayman along with their Frontera Delaware Share certificates. Upon receipt of a properly completed and executed letter of transmittal and such Frontera Delaware Share certificates, Frontera Cayman will issue to the holder a Frontera Cayman Share certificate or pay the Cash Consideration to such shareholder, as applicable.

After the Merger, trading in Frontera Cayman Shares held in street name will not be eligible for electronic settlement through the facilities of the Depositary Trust Company ("DTC"). Therefore, former holders of Frontera Delaware Shares who held their shares in street name will be required to give their brokers the information required to be provided under the letters of transmittal so Frontera Cayman can determine whether such street name shareholders are entitled to the Frontera Cayman Share Consideration or the Cash Consideration.

Frontera Cayman will be unable to determine which US Shareholders are accredited investors who will receive the Frontera Cayman Share Consideration and which US Shareholders are non-accredited investors who will receive the Cash Consideration until the US Shareholders have returned a properly completed letter of transmittal. Therefore, all Frontera Cayman Shares issuable in the Merger initially will be issued as treasury shares assuming that 100% of the US Shareholders are entitled to receive the Frontera Cayman Share Consideration. On a weekly basis, Frontera Cayman will examine all letters of transmittal submitted during the previous week and will cause the Frontera Cayman Share Consideration and Cash Consideration to be issued as appropriate. US Shareholders who have not submitted a properly completed letter of transmittal by the expiration of 120 days following the date the Merger becomes effective will be presumed to be non-accredited investors and will receive the Cash Consideration. Any previously issued Frontera Cayman Shares held in treasury for purposes of issuing the Frontera Cayman Share Consideration will thereupon be canceled.

US Shareholders who receive the Frontera Cayman Share Consideration will receive a certificate representing their Frontera Cayman Shares bearing a restrictive legend to the effect that such Frontera Cayman Shares have not been registered under the US Securities Act or any state securities laws and may be transferred only pursuant to an exemption from the registration requirements of the US Securities Act and applicable state securities laws. All non-US Shareholders will receive Frontera Cayman Shares without a restrictive legend. In addition, both US Shareholders and non-US Shareholders who are Qualified Institutional Buyers as defined in Rule 144A under the US Securities Act who execute and deliver to Frontera Cayman a Qualified Institutional Investor representation letter will receive Frontera Cayman Shares without a restrictive legend. All Frontera Cayman Shares issued without a restrictive legend may be deposited with the Depositary in exchange for DI's.

The SEDA

Frontera Cayman has entered into the SEDA with YAGM, pursuant to which YAGM, subject to certain conditions and limitations, including, inter alia, Admission, has agreed to subscribe for up to £21,529,060 of Frontera Cayman Shares (the "Commitment Amount") over a period of 36 months.

Under the SEDA, Frontera Cayman may, at its discretion, require YAGM to subscribe from time to time for a number of its shares (an "Advance") not to exceed, in general, the greater of £30,750 or 300% of the average volume weighted daily trading value of Frontera Cayman's issued shares for the 10 trading day period immediately preceding the date of the relevant notice requesting the Advance (an "Advance Notice"), provided that no Advance may be greater than £2,500,000 and subject to an overall limit of the Commitment Amount or, if less, the issue of 273,384,889 Frontera Cayman Shares.

Frontera Cayman may request an Advance no more than once every 10 trading days. There is no minimum amount required for any Advance. If the market price of Frontera Cayman Shares increases over each of the last two days of the Pricing Period described below, Frontera Cayman has the right to increase the net amount of an Advance by 50%.

The price at which Frontera Cayman will issue shares to YAGM will be 95% of the lowest daily volume weighted average price of the shares during the 10 consecutive trading days beginning on the first trading day after the relevant Advance Notice (the "Pricing Period"). Frontera Cayman may set a minimum price for each Advance not greater than 95% of the daily volume weighted average price of the shares on the trading day immediately before the relevant Advance Notice.

The Frontera Cayman Shares issued pursuant to any Advance will be delivered not later than the fifth trading day after the relevant Pricing Period. Upon delivery of the shares, the proceeds of such Advance will be released to Frontera Cayman.

Neither YAGM nor its affiliates may engage in any short sales with respect to Frontera Cayman's shares, provided that YAGM may during a Pricing Period sell any shares it anticipates receiving in an Advance. In such event, if the amount realised by YAGM exceeds the final Advance proceeds with respect to the shares sold during the Pricing Period by 5% or more, the price of such shares will be increased by an amount equal to 50% of such excess.

Effect of the Proposals on Existing Warrants AND OPTIONS

The Company's outstanding warrants issued in 2008, currently exercisable for, in aggregate, 6,593,037 Frontera Delaware Shares at an exercise price of US$1.69 per share (the "2008 Warrants"), will be adjusted in accordance with their terms following completion of the Proposals. If holders of 75% of the aggregate principal amount of the Old Notes elect to receive the Frontera Cayman Share Payment, upon completion of the Proposals, the 2008 Warrants will be adjusted to, in aggregate, 69,569,441 Frontera Cayman Shares at an exercise price of US$0.16 (£0.10) per share. The 2008 Warrants expire in July 2013.

The Company's outstanding warrants issued in 2009, currently exercisable for, in aggregate, 43,542,132 Frontera Delaware Shares at an exercise price of £0.15 per share (the "2009 Warrants"), will be adjusted in accordance with their terms following completion of the Proposals. If holders of 75% of the aggregate principal amount of the Old Notes elect to receive the Frontera Cayman Share Payment, upon completion of the Proposals, the 2009 Warrants will be adjusted to, in aggregate, approximately 140,484,748 Frontera Cayman Shares at an exercise price of £0.047 (US$0.075) per share. The 2009 Warrants expire in September 2011.

As a result of the Merger, any of the Company's 14,850,389 options to purchase Frontera Delaware Shares that are currently unvested will vest and become exercisable for Frontera Cayman Shares in accordance with their respective terms and the terms of the employee share option plans pursuant to which they were issued.

DEFINITIONS

The following definitions apply throughout this announcement (including the Appendix), unless the context requires otherwise:

2008 Warrants means the Company's outstanding warrants issued in 2008, currently exercisable for, in aggregate, 6,593,037 Frontera Delaware Shares at an exercise price of US$1.69 per share;

2009 Warrants means the Company's outstanding warrants issued in 2009, currently exercisable for, in aggregate, 43,542,132 Frontera Delaware Shares at an exercise price of £0.15 per share;

Admission means admission to trading on AIM of the entire issued share capital of Frontera Cayman in accordance with the AIM Rules, being the Frontera Cayman Shares arising under the Proposals;

Advance means the subscription for Frontera Cayman Shares by YAGM pursuant to the SEDA;

Advance Notice means a written notice from Frontera Cayman to YAGM specifying the cash amount to be received by Frontera Cayman in exchange for Frontera Cayman Shares pursuant to the SEDA;

AIM means the market operated by London Stock Exchange;

AIM Rules means the AIM Rules for Companies published by London Stock Exchange;

Arbuthnot means Arbuthnot Securities Limited;

Board means the directors of Frontera Delaware or Frontera Cayman (as the context may require);

Cash Consideration means the amount in cash, calculated by reference to the Placing Price, which may be received by shareholders of the Company as a result of the Merger;

Commitment Amount means up to £21,529,060 of Frontera Cayman Shares to which YAGM may be required to invest in Frontera Cayman Shares pursuant to the SEDA;

Company means Frontera Resources Corporation, a company incorporated under the General Corporation Law of the State of Delaware, United States of America;

Depositary means Computershare Investor Services Plc;

Depositary Interest Register means the register of Depositary Interest holders and their underlying entitlement to Frontera Cayman Shares, maintained by the Depositary;

Depositary Interests or DIs means Depositary Interests representing Frontera Cayman Shares issued by the Depositary;

DTC means Depositary Trust Company;

Equity Fundraising means the Placing and the Subscription, taken together;

Exchange Offer means Frontera Cayman's offer to the holders of the Old Notes to receive, at their option, either: (a) the Frontera Cayman Share Payment; (b) New Notes; or (c) a combination of the Frontera Cayman Share Payment and New Notes.

Exchange Payment means the Frontera Cayman Share Payment, the New Notes Payment or the combination thereof paid to a tendering holder;

Expiration Time means the expiration time of the Exchange Offer;

Frontera Delaware means Frontera Resources Corporation, a company incorporated under the General Corporation Law of the State of Delaware, United States of America;

Frontera Cayman means Frontera Resources Corporation, an exempted company limited by shares incorporated in the Cayman Islands under Cayman Islands Company Law with registered number 256380;

Frontera Cayman Shares means the ordinary shares, par value $0.00004 per share, in the authorised share capital of Frontera Cayman;

Frontera Delaware means Frontera Resources Corporation, a company incorporated under the General Corporation Law of the State of Delaware, United States of America;

Frontera Delaware Shares means common stock of Frontera Delaware, par value US$0.00004 per share;

FSA means Financial Services Authority in the UK;

FSMA means Financial Services and Markets Act 2000, as amended;

Group means, before the Merger becoming effective, Frontera Delaware and its direct and indirect subsidiaries and, following the Merger becoming effective, Frontera Cayman and its direct and indirect subsidiaries;

London Stock Exchange means London Stock Exchange plc;

Merger means the merger of Frontera Delaware with and into Frontera Cayman pursuant to the Merger Agreement, with Frontera Cayman being the surviving corporation;

Merger Agreement means the agreement and plan of merger entered into between Frontera Delaware and Frontera Cayman relating to the Merger;

New Notes means the 10% convertible notes due 2016 of the New Notes Issuer;

New Notes Issuer Frontera Holdings LLC, a Delaware limited liability company and a wholly-owned subsidiary of Frontera Cayman, to be formed before the closing of the Exchange Offer;

New Notes Payment means US$1,000 principal amount of New Notes for each US$1,000 principal amount of Old Notes tendered for exchange;

Non-Accredited US Shareholders means a US Shareholder who, the board of directors of Frontera Cayman, in its sole discretion, has a reasonable basis for believing is not an "accredited investor", as defined in Rule 501 of Regulation D promulgated under the US Securities Act; and shall include a US Shareholder that fails to complete, sign and return a letter of transmittal at or before 12:00 pm (London time) on the date that is 120 days following the effective date the Merger;

Note Exchange Agreements means the note exchange agreements entered into by Mr. Nicandros and another senior executive of the Company, with Frontera Cayman under which approximately US$8.4 million of loans will be converted into Frontera Cayman Shares at a conversion price per share equivalent to the Placing Price;

NSA means Netherland Sewell & Associates;

Old Notes means the 2012 Notes and the 2013 Notes taken together;

OPL or Old Park Lane means Old Park Lane Capital plc;

Participating Affiliates Mr. Nicandros and a another senior executive of the Group, being the parties to the Subscription Agreements with Frontera Cayman;

Placing means the conditional placing of 115,678,351 Frontera Cayman Shares with placees procured by the Placing Agents at a price of 4 pence per share, raising a total of £4.6 million (US$7.5 million) (before expenses);

Placing Agents means Arbuthnot Securities Limited and Old Park Lane Capital Plc, as placing agents for the Placing;

Placing Agreement means the conditional placing agreement entered into between Frontera Cayman, Strand Hanson and the Placing Agents in relation to the Placing;

Placing Price means the price of 4 pence per Frontera Cayman share to be issued by Frontera Cayman in relation to the Placing;

Proposals means the Equity Fundraising, the Debt Restructuring and the Merger, referred to collectively in this announcement;

Pricing Period means the 10 consecutive trading days beginning on the first trading day after the relevant Advance Notice to calculate the price at which Frontera Cayman will issue shares to YAGM, being 95% of the lowest daily volume weighted average price of the shares;

Regulation D Rules 501 through 508 under the US Securities Act;

Regulation S Rules 901 through 905 under the US Securities Act;

US Securities Act means United States Securities Act of 1933, as amended;

SDRT means United Kingdom stamp duty and stamp duty reserve tax;

SEDA or SEDA Facility means the standby equity distribution agreement entered into between Frontera Cayman and YAGM pursuant to which, YAGM has agreed to invest up to £21,529,060 in the share capital of Frontera Cayman in consideration for the issue of Frontera Cayman Shares over a 36‑month period (subject to certain conditions);

Settlement Date means five Houston, Texas, business days following the Expiration Time, which may be accelerated or extended by Frontera Cayman at its sole discretion;

Strand Hanson means Strand Hanson Limited;

Subscription means the subscription for new Frontera Cayman Shares by an entity associated with Steve Nicandros (Chairman and Chief Executive Officer) and another senior executive of the Group;

Subscription Agreements means the subscription agreements entered into between Frontera Cayman and an entity associated with Mr. Nicandros and another senior executive of the Group, pursuant to which the subscribers have agreed to subscribe for 53,959,053 new Frontera Cayman Shares at the Placing Price;

US Shareholder means a shareholder whose address as it appears in the stock register of Frontera Delaware is an address located within the United States; and

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 around the world. Frontera has operated in Georgia since 1997 where it holds a 100 percent working interest in a production sharing agreement with the government of Georgia. This gives Frontera the exclusive right to explore for, develop and produce oil and gas 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. -Symbol: FRTE. For more information, please visit www.fronteraresources.com.

2. Information on Resource Estimates: The contingent and prospective resources estimates in this announcement for Mirzaani and Mtsare Khevi Fields were determined by the independent consulting firm of Netherland, Sewell & Associates (NSA) in 2010 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). Contingent resources are those quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from known accumulations but for which the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies. Contingent resources estimates in this announcement for Mirzaani Field are contingent solely upon demonstration of the economic viability of the project and an approved development program. If this issue is resolved, some portion of the contingent resources may be reclassified as reserves. Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. The reserve estimates in this announcement for Taribani Field and the prospective resources estimates for the Basin Edge Play Unit were determined by NSA in 2005. The full reports of NSA are available at www.fronteraresources.com.