Frontera Resources Regulatory News (FRR)

17 September 2018

Frontera Resources Corporation

("Frontera" or "the Company")

Update

Frontera Resources Corporation (AIM: FRR), the European-focused oil and gas exploration and production company, today announces the following.

On 28 August 2018, the Company received a conversion notice from YA II PN, Ltd. in respect of 241 of its Series A Preferred Convertible Shares ("Preferred Shares") in lieu of respective cash payment for the month of August. That conversion notice stipulated that the number of Ordinary Shares to be issued following conversion was 82,077,412. On 3 September 2018, YA II PN, Ltd. purported to issue a further conversion notice (together with the 28 August 2018 notice, the "Conversion Notices") in respect of a further 241 Preferred Shares, to be converted into 93,784,120 Ordinary Shares, in lieu of respective cash payment for the month of September.

Following investigation by the Company into the circumstances surrounding YA II PN, Ltd.'s actions and the submissions of the Conversion Notices, the Company's legal advisers wrote to YA II PN, Ltd. on 12 September 2018. By that letter, YA II PN, Ltd. was informed that (i) the Company had serious concerns as to the validity of the Conversion Notices and the calculations contained therein and (ii) the Company does not consider that it would be appropriate to action any conversions in respect of the Conversion Notices pending further investigation. The Company and its legal advisers have received no substantive response to this letter from YA II, PN, Ltd.

Instead, later on 12 September 2018, the Company received a purported notice of default from YA II PN, Ltd. in respect of the Conversion Notices (the "Purported Default Notice"), stating that the Company's failure to convert Preferred Shares in accordance with the Conversion Notices constituted a "Triggering Event" under the terms applicable to the Preferred Shares. The Purported Default Notice demands the redemption in cash of 2,650 Preferred Shares at a liquidation amount of $2,650,000.

The Company vigorously disputes the validity of both the Conversion Notices and the Purported Default Notice, and is continuing to investigate YA II PN Ltd.'s actions in that regard. The Company is unable to comment further at this time pending further investigation with its advisers and the receipt of legal advice.

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

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