Frontera Resources Regulatory News (FRR)

28 November 2017

Frontera Resources Corporation

("Frontera" or the "Company")

Update on Ud-2 well

Frontera Resources Corporation (AIM: FRR), the European focused oil and gas exploration and production company, is pleased to provide an update regarding interim results on testing of the Ud-2 well, situated inside the 950km2 Mtsare Khevi Gas Complex area, located in onshore Block 12, Georgia.

After perforation and small-scale mechanical stimulation of a 20m thick interval of the Miocene-aged Gareji reservoir, situated between 2600m - 2620m, the well started to flow natural gas, which has been flared during cleanup.

State Oil and Gas Service Company has performed analysis of the flowed natural gas. Chemical composition is shown below:

Methane - 90.4%

Ethane - 4.15%

Propane - 1.4%

Nitrogen - 3.1%

Others - 0.95

Lower Calorific value - 8818 kcal/m3 (State standard: not less than 7600 kcal/m3)

Higher Calorific value - 9763 kcal/m3

The natural gas quality satisfies all requirements of the applicable GOST standard and corresponds to the applicable regulations of the State Standard 5542-87, which makes it acceptable for distribution through Georgia's natural gas grid.

The natural gas quality matches expectations and samples of natural gas from the Miocene-aged Gareji reservoir in other wells of the Mtsarekhevi Gas Complex and the Taribani Complex.

Together with natural gas, the Ud-2 well is flowing hematite (used by previous operator as a weighting material for Ud-2 drilling mud) and water (used during small-scale mechanical stimulation). The gas flow rate has increased with progressing of the cleanup of the well.

Once the well cleanup is completed and a stabilized gas flow is established, the Company will update the market regrading accurate gas flow volumetrics.

As previously announced, the Ud-2 well had been drilled by a previous operator with significant gas shows recorded while drilling in the Gareji and Maykop reservoirs between 2450m and 5289m, with drilling mud weights of 17.5 ppg and 17.9 ppg respectively. Based on the Netherland, Sewell & Associates resource estimate, the Gareji and the Maykop reservoirs of the Mtsare-Khevi Gas Complex are estimated to contain 8.3 TCF of Gas in Place (OGIP), with 5.8 TCF considered to be recoverable.

As previously announced, the Company is in the process of completing technical design of the 18km natural gas pipeline connecting the Ud-2 well with the Mtsare Khevi gas processing facility (which is connected to Georgia's natural gas distribution grid). The Company is also in the process of securing right of way for this new flow line.

Zaza Mamulaishvili, President and Chief Executive Officer, commented:

"We are hugely excited with the interim results of the Ud-2 well testing. Flowing gas from Miocene-aged Gareji reservoir is a transformational milestone for the Company and a big step towards the energy independence for Georgia. 

"Natural gas with similar quality as at Ud-2 well had been sampled by a previous operator whilst drilling the Gareji reservoir at V-1 well, situated 14 km north of Ud-2 well in the Mtsarekhevi Gas Complex, and also at wells T-39 and T-40 in the Taribani Complex, situated 50 km east of Ud-2 well. Within Block 12, the thickness of the Miocene-aged Gareji reservoir is estimated at approximately 2,000m and extends for about 130km from northwest to southeast. Oil and gas contained in this reservoir is sourced from the world class Maykop source rock. 500km further southeast from Block 12, the giant Shah-Deniz gas field contains natural gas sourced from the Maykop formation as well. Current progress at Ud-2 well brings all abovementioned into context for future drilling operations and tremendously increases our confidence while flowing Miocene-aged Gareji natural gas first time in Georgia's history.

"As expected, we have drilling debris and fluids (hematite) still coming out of the formation and perforations, and once the well cleanup is completed and we are in a position to accurately measure gas flow rates, we look forward to updating market in due course." 

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

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About Frontera Resources Corporation

Frontera Resources Corporation is an independent, international oil and gas exploration and production company whose strategy is to identify opportunities and operate in emerging markets in Eastern Europe around the Black Sea. Frontera Resources Corporation shares are traded on the London Stock Exchange, AIM Market - Symbol: FRR. For more information, please visit www.fronteraresources.com .

1. Information on Resource Estimates: The independent contingent and prospective resources estimates contained in this announcement were determined by the independent consulting firm of Netherland, Sewell & Associates (NSA) in accordance with the definitions and guidelines set forth in the 2007 Petroleum Resources Management System (PRMS) adopted by the Society of Petroleum Engineers (SPE). 

2. This release may contain certain forward-looking statements, including, without limitation, expectations, beliefs, plans and objectives regarding the transactions, work programs and other matters discussed in this release. Exploration for oil is a speculative business that involves a high degree of risk. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: risks inherent in oil and gas production operations; availability and performance of needed equipment and personnel; the Company's ability to raise capital to fund its exploration and development programs; seismic data; evaluation of logs, cores and other data from wells drilled; inherent uncertainty in estimation of oil and gas resources; fluctuations in oil and gas prices; weather conditions; general economic conditions; the political situation and relations with neighboring countries; and other factors listed in Frontera's financial reports, which are available at www.fronteraresources.com. There is no assurance that Frontera's expectations will be realized, and actual results may differ materially from those expressed in the forward-looking statements.

3. Glossary of Terms: BCF - means Billion Cubic Feet of gas. TCF - means Trillion Cubic Feet of gas. Mcf - means Thousand Cubic Feet of gas. OOIP - means Original Oil in Place. OGIP - means Gas in Place. Bopd - means Barrels of Oil Per Day. PPG - means pounds-per-gallon.