SOURCE: Frontera Resources Corporation

May 08, 2008 02:00 ET

Operations Update, Taribani Field Unit

HOUSTON, TX--(Marketwire - May 8, 2008) - 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 an update of its operations at the Taribani Field Unit within Block 12, Georgia.

After the successful completion of fracing operations at the Dino #2 development well during the last week of April, as previously reported, the flowing well was brought under control, production tubing was set and the well was completed on May 3. During subsequent initial production testing, early results have indicated that the well is flowing at sustainable rates with no associated flow of sediment.

The Dino #2 well is flowing oil from Zone 9, a ten-meter oil-producing reservoir interval that was hydraulically fraced at a depth of approximately 2,300 meters. During initial production testing, the well has so far produced at rates as high as 150 barrels of oil per day of 36 degree API oil, with small amounts of associated gas, using a 4/64th inch choke at a well head surface pressure drawdown of 1,500 psi. Bottom hole pressures have been measured at approximately 5,900 psi. Flowing tubing pressures have been observed to be constant, indicating sustainable flow from the reservoir into the well bore. Based on extrapolation modeling of current information, Frontera believes the well is capable of producing at rates in excess of 200 barrels per day. Production testing over the next twenty to sixty days will further determine maximum sustainable flow rates and drawdown for optimal oil recovery and reservoir management.

Significantly, production information obtained from the Dino #2 well has thus far indicated no sediment flow into the well bore, an occurrence that has previously presented a challenge to sustainable production from wells at the Taribani Field. In addition, the application of artificially induced fractures has created enhanced permeability from the oil bearing Zone 9 reservoir matrix and appears to have also created connectivity with existing natural oil bearing fracture systems to provide greater reservoir permeability.

Frontera believes the Dino #2 completion has validated several important elements of its field development model regarding Zone 9. Specifically, operations have confirmed Frontera's ability to successfully apply frac completions to Zone 9 and arrest sediment flow. Additionally, work has confirmed that oil bearing natural reservoir fracture systems can be successfully encountered via fracing operations. Based on this new information -- coupled with previous core analysis that determined matrix porosities were higher than originally projected by third-party reservoir engineering assessments, thereby verifying a larger hydrocarbon storage capability -- recovery per well is anticipated to also be within expected commercial parameters.

The workover rig and frac equipment is now being mobilized a short distance within the Taribani Field from the Dino #2 location to the T-#45 location where it will apply a frac pac completion to Zone 9 at a depth of approximately 2,400 meters in the days ahead.

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

"The initial production results from the Dino #2 well are very significant and we believe they confirm our plans for the ongoing development of Zone 9 amidst an attractive commodity price environment. With the results we have seen from the frac operation so far, we believe we have crossed an important milestone in developing this large field and validated the fit-for-purpose completion technology that we designed for this reservoir. While we will be continuing our testing program over the next several weeks, we are now evolving our plans to accelerate our ongoing efforts and, with each successive well that is brought into production from Zone 9, we look forward to increasing production and the associated reclassification of reserves within the Taribani Field Unit."

The Taribani Field is a large, undeveloped oil field covering an area of approximately 80 square kilometers with productive horizons situated in Miocene and Pliocene age reservoirs. These reservoirs are located at depths between 2,200 meters and 3,500 meters. The independent consulting firm of Netherland, Sewell & Associates has assigned 118 million barrels of P3 reserves from Zones 9, 14, 15 and 19 within the field. Zone 9 represents approximately 20% of this total. Additionally, Netherland, Sewell & Associates has assigned as much as 36 million barrels of unrisked resource potential associated with five deeper horizons in the field.

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 Taribani Field, please visit: http://www.fronteraresources.com/operations/taribanifieldunit.php

2. The reserve information herein was determined by the independent consulting firm of Netherland, Sewell & Associates in accordance with the petroleum resource definitions adopted by the Society of Petroleum Engineers (SPE), World Petroleum Council (WPC) and the American Association of Petroleum Geologists (AAPG) in 2000.

3. This release contains certain forward-looking statements, including, without limitation, expectations, beliefs, plans and objectives regarding the potential transactions, potential drilling schedule, well results and ventures discussed in this release, as well as reserves, 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: future exploration and development results; availability and performance of needed equipment and personnel; seismic data; evaluation of logs and cores from wells drilled; fluctuations in oil and gas prices; weather conditions; general economic conditions; and the political situation in Georgia and neighboring countries. 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
    Email Contact

    Brunswick Group LLP
    Patrick Handley / Mark Antelme
    +44 207 4045959

Multimedia