January 28, 2013 02:01 ET
28 January 2013
Frontier Resources International Plc
("Frontier" or the "Company")
The Board of Directors of Frontier Resources International (ISDX: FRGP), the Middle East and Southern Africa
focused exploration company is pleased to announce that on 25 November 2012, his Majesty Sultan Qaboos, issued
a royal decree endorsing the recently signed Exploration and Production Sharing Agreement (EPSA) over Block
38 in southern Oman.
As part of its initial evaluation of the block and in preparation for the Company's move to London's AIM,
Frontier retained SLR Consulting to prepare a Competent Persons Report (CPR) on the area. The Company now
wishes to announce that this report has been completed and the Executive Summary is reproduced without material
amendment as an Appendix to this announcement.
Jack Keyes, CEO of Frontier said, "We are gratified to hear that HM Sultan Qaboos has endorsed our EPSA. The CPR
gives Block 38 an estimated original oil in place (OOIP) of 10,865 MMboe and we believe that Block 38 contains
an untested salt basin analogous to the other proven salt basin of Oman and we are looking forward to exploring
this very interesting area next year".
The text below has been extracted, without amendment, from the Competent Persons Report prepared by SLR
Frontier Resources (Oman) Ltd, a wholly owned subsidiary of Frontier Resources International Plc has signed an
Exploration and Production Sharing Agreement (EPSA) with the Government of the Sultanate of Oman for a 100%
interest in Block 38, the Mudayy Block. The EPSA is a six year agreement comprising two three year phases. The
Block covers an area of 17,425 sq kms and is located in the Dhofar region of southwest Oman in the southern
part of the Rub Al Khali Basin. To the west lies the Republic of Yemen and to the east is the prolific South
Oman Salt Basin. Block 38 has had only three wells drilled and is considered prospective for oil and gas given
the production from the nearby Block 6 operated by Petroleum Development Oman.
Based on the evaluation of vintage seismic, well data and regional geologic studies the Block contains an
untested salt basin potentially analogous to the other proven salt basins of Oman. Primary targets are the
carbonate stringers embedded in Ara Group salts lying at depths of between 3,000 and 5,000 meters. Secondary
targets include the shallower Haima Play which had minor oil shows during drilling and the deeper Buah
Formation which has proven to be gas productive elsewhere in Oman.
Frontier will conduct geophysical and geological studies during the first phase of the agreement to determine
the range of drilling opportunities that may be available. This information will then be used to design a 3D
seismic survey the results of which will lead to the drilling of a well if a suitable structure is identified.
The Company plans to immediately start the reprocessing of older seismic data and acquire aerogravity and
magnetic surveys early in 2013 in preparation for the 3D seismic.
The percentage interests evaluated are shown below:
Asset Operator Interest Status Expiry Date Area Comments
Block 38 Frontier 100% Exploration 2015 17,425 km2 Commencement of
The permit contains prospective resources. Drilling programmes are required to prove the prospects
identified. The oil initially in place (OIIP) is calculated based on extrapolation of the analysis in Terken
et. al. (2001). This paper gives values for hydrocarbon generation, expulsion and trapping efficiency for
specific areas of the Omani basins. These values can be used as analogues for estimating the trapped resource
in Block 38. The gross low, best, and high estimates are the probable volumes of recoverable oil based on the
lead size distribution of prospects identified by Phillips, a previous operator of Block 38, an estimate of
the total recoverable hydrocarbons generated by a Huqf source system in the Ghudun Basin and the recovery
factor for the analogous Harweel Cluster Field operated by PDO in the adjacent Block 6. The net attributable
is based on Frontier Resources 100% interest.
The Prospective Resource Summary for Block 38 Permit is shown below:
Oil & Liquids Prospective Resources in MMbbls for a Cluster of Prospects Block 38 Asset
Gross Low Gross Best Gross High
Asset OIIP Risk Recovery Estimate Estimate Estimate Operator
MMbbls Factor Factor MMbbls MMbbls MMbbls
Block 38 10,865 19% 18% 23 140 372 Frontier
Oil & 10,865 23 140 372
Note: OIIP is oil initially in place
Risk Factor for Prospective Resources means the chance of probability of discovering hydrocarbons in
sufficient quantity for them to be tested to the surface. This then is the chance or probability of the
Prospective Resources maturing into a Contingent Resource.
Recovery Factor is the estimated percentage of OIIP that would be recoverable under appropriate development
projects such as the analogous Harweel Cluster of fields operated by PDO in the adjacent Block 6.
The Gross Best Estimate is the mean of prospect sizes identified by Phillips.
MMbbls = millions of barrels
A moderate investment of USD2.6m in forensic geochemistry and data acquisition using new technology, airborne
FTG (Full Tensor Gravity), could significantly reduce the exploration risk by demonstrating the presence of
halite (salt rock) in the Ghudun Basin. The presence of halite is an indirect indicator for Huqf source rock
presence in the basin. The FTG survey results could also help to focus subsequent exploration efforts on
priority areas. This could reduce the cost of the 3D seismic survey by reducing the area of investigation
significantly. The proposed 3D seismic survey over the reduced area of 500km2 is estimated to cost USD8m.
Without FTG the cost of this 3D survey could be significantly higher. The seismic survey will help to define
prospects. A well to drill and test the best prospect is estimated to cost about USD10m. The Block 38 Permit
represents an opportunity to develop an onshore oil and gas play similar to PDO's successful Harweel Cluster
of fields where production commenced in 2004. Development costs for Block 38, including full scale enhanced
oil recovery (EOR), are likely to be high because, in addition to the many development wells required to
produce the light sour oil expected from the intra-salt carbonate stringers there will be a need for oil and
gas processing and sour gas EOR injection facilities. However the development costs can be supported by the
oil volumes which are of sufficient scale based on the analogous Harweel Cluster of fields operated by PDO in
the adjacent Block 6. There is insufficient data to estimate a net present value for the Block 38 asset.
We have estimated the degree of uncertainty inherent in the measurements and interpretation of the data and
have calculated a range of resources and risk factors in accordance with the SPE, WPC, AAPG & SPEE, 2007
The Directors of Frontier are responsible for the contents of this announcement.
Frontier Resources International Plc.
Jack Keyes, CEO
Telephone: +1 (281) 920-0061
Ric Piper, Chairman
Telephone: +44 7966 381974
ISDX Corporate Adviser
Peterhouse Corporate Finance Limited
Duncan Vasey or Mark Anwyl
Telephone:+44 (0) 20 7220 9796
Frontier Resources International plc
See all RSS Newsfeeds