SOURCE: Frontera Resources

Frontera Resources

February 24, 2009 02:00 ET

Frontera Resources Announces New Field Extension Discovery in Georgia

HOUSTON, TX--(Marketwire - February 24, 2009) - Frontera Resources Corporation (London Stock Exchange, AIM Market - Symbol: FRR; OTCQX Market, U.S.A. - Symbol: FRTE), an independent oil and gas exploration and production company, today announced a discovery in a new, undeveloped extension of the Mirzaani Field within its Shallow Fields Production Unit, Block 12, in the country of Georgia.

Drilling operations at the Mirzaani #2 well have recently been completed in an undeveloped area of the Mirzaani Field known as Mirzaani Field Northwest. This well encountered multiple hydrocarbon bearing intervals within an extension of the field that had been identified as undeveloped based on new field mapping that was completed in 2008. The new discovery is expected to open for future drilling an undrilled area of the field that Frontera estimates to contain potentially significant volumes of recoverable oil reserves within multiple reservoir intervals situated at depths between 800 meters and 1,300 meters. The Mirzaani #2 well is expected to not only increase production, but will also serve to improve understanding of the potentially extensive prospectivity associated with Mirzaani Field Northwest. In addition, the discovery well is expected to provide the basis for commencement of a feasibility study for a new drilling campaign within the Mirzaani Field proper that would be designed to deepen existing wells in order to efficiently develop similar undrilled horizons.

The Mirzaani #2 well is currently undergoing preparations to commence production testing of four reservoir intervals that were encountered within the well. Designed to confirm multiple hydrocarbon bearing zones in the Lower Pliocene age Shiraki formation, the well was drilled to a total depth of 1,250 meters.

During drilling operations, higher than anticipated reservoir pressures were encountered when drilling through hydrocarbon bearing intervals that resulted in oil and gas flowing to the surface. The resulting well-control challenges led to a longer than anticipated drilling time for the Mirzaani #2 well. A preliminary review of data obtained while drilling has revealed approximately sixty gross meters of oil and gas bearing sands within the well. Production testing of the well is expected to commence within the next two weeks.

Discovered in 1932, the Mirzaani Field has historically produced approximately 7 million barrels of oil, but contains many undrilled locations across the structure. The Mirzaani #2 well is the first new well to be drilled in the field since 1972. In 2006, Frontera acquired approximately 100 kilometers of new seismic data over the field area as part of an effort to re-map and identify new potential associated with the field. Work is currently ongoing to update reserve estimates and results from the Mirzaani #2 well will contribute to this new assessment.

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

"The Mirzaani #2 discovery well represents an important new extension of the Mirzaani Field that we believe will provide the basis for continued growth of the Shallow Fields Production Unit where Frontera has the potential to create attractive near term production and reserve growth."

Frontera's Shallow Fields Production Unit is located in the central portion of Block 12 and represents what the company believes to be an extensive trend of low-cost, low-risk oil and gas reserves. Containing four discovered yet undeveloped or underdeveloped fields that have additional exploration potential, objectives are considered to be traditional, well-known reservoirs of Pliocene and Miocene age that are situated at depths from 10 meters to 1,500 meters.

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. - OTCQX Symbol: FRTE. For more information, please visit www.fronteraresources.com. For more information regarding Frontera's work at the Shallow Fields Production Unit, please visit: www.fronteraresources.com/Operations.php?link_id=43.

2. Gerard Bono, Frontera's Vice President and Chief Reservoir Engineer, is the qualified person who reviewed and approved the reserve information contained in this announcement.

3. This release contains certain forward-looking statements, which may include, without limitation, expectations, beliefs, plans and objectives regarding potential transactions or ventures, potential drilling schedule, reserves and well performance, as well as future drilling, development and production. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: exploration and development results; availability and performance of needed equipment and personnel; seismic data; evaluation of logs and cores from wells drilled; results of production testing; fluctuations in oil and gas prices; weather conditions, general economic and capital markets conditions; the political situation in Georgia and neighboring countries; and other factors listed in Frontera's financial reports, which are available at www.fronteraresources.com/Investors.php?link_id=23. 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.

Contact Information

  • Enquiries:

    Frontera Resources Corporation
    Liz Williamson
    Vice President, Investor Relations and Corporate Communications
    (713) 585-3216
    lwilliamson@fronteraresources.com

    Nominated Advisor:

    Morgan Stanley
    Jon Bathard-Smith
    +44 20 7425 8000