Frontera Resources Corporation Operations Update (1319V)

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RNS Number : 1319V

Frontera Resources Corporation

19 July 2018

19 July 2018

Frontera Resources Corporation

("Frontera" or "the Company")

Operations Update

Frontera Resources Corporation (AIM: FRR), the European focused oil and gas exploration and production company, is pleased to provide update regarding its operations at Block 12 in Georgia.

Well T-39

As previously announced by the Company on 29 June 2018, the well T-39, the third well of the three-well drilling and testing campaign at the Company's Taribani complex situated within the Block 12 license in Georgia, has been sidetracked from the existing wellbore and drilled to a vertical depth of 3056m into the Miocene aged Eldari B formation. Total net pay of 132m has been calculated for penetrated four oil bearing sandstones, Zones 9, 14, 15 and 19.

On 4 July 2018, Extended Well Testing ("EWT") commenced at T-39 well, by perforation of 21m interval of Zone 19, situated between 2970m and 3000m. After a well clean out, the well started to flow light ( 41.5 API), sweet crude oil together with wet gas and, under natural flow, achieved following production rates: 529 bbls/d of oil and 600,000 scf/d of gas using an 8/64" chock size, 347 bbls/d of oil and 425,000 scf/d of gas using an 7/64" chock size and 250 bbls/d of oil and 350,000 scf/d of gas through 6/64" chock, demonstrating excellent well deliverability. The Company anticipates that production rates from future development wells may be significantly higher.

The CPR volume estimates of 14.8 million barrels of recoverable oil from Zone 19 and 36.5 million barrels of recoverable oil from Zones 20, 23 and 25 of the Eldari B formation, situated between 3056m and 3350m interval support the significant potential of the Eldari B formation.

The 300m interval below Zone 19 was previously penetrated during the drilling of the Niko-1 well, the first well drilled by the Company in Block 12, Georgia. Testing of the interval confirmed the presence of oil and gas bearing Miocene aged marine sandstones with good reservoir properties, flowing light sweet oil and wet natural gas at a commercial volumes.

Gareji formation, situated below the Eldari B reservoir in the Taribani field is estimated to contain 3.2 Trillion Cubic Feet of recoverable gas according to the CPR estimates.

Well Ud-2

As previously announced by the Company on 8 May 2018, Extended Well Testing ("EWT") at Ud-2 well, situated in Mtsare Khevi Gas Complex of Block 12 in Georgia, commenced on 21 April 2018.

The Company perforated and with 57 tons of proppant mechanically stimulated 9.5m out of gross 27m interval situated between 2519m and 2446m of Middle Miocene aged Zone F. During the clean out phase the well flowed dry natural gas, carrier fluid with some proppant and cement particles. It has transpired that cementing around the casing at this section was of very poor quality and, accordingly, did not allow achieving a designed fracture geometry during stimulation and prevented continuous clean out process of the well. Maximum flow rate of 150,000 scf/d of dry gas has been recorded during the testing period.

Based on the current well test result, the reconfirmation of the presence of Middle Miocene aged gas in Zone F and the potential to increase stimulation efficiency by improving the fracture geometry, the Company is considering the option of sidetracking from the existing wellbore of Ud-2 well. In the meantime preparations underway to plug and abandon the well.

Wells T-45 and Dino-2

The Company is continuing Extended Well Testing ("EWT") of the wells T-45 and Dino-2 in the Taribani complex, and will update the market about these wells in due course.

Corporate Finance Update

As announced on 7 June 2018, in accordance with the agreement entered into with YA II PN, Ltd ("YA"), the Company redeemed 241 Series A convertible, preferred, redeemable shares in the Company held by YA ("Series A shares") for the cash amount of US$265,000 (the "Redemption"). Following the Redemption, YA holds the total of 2,650 Series A shares.

Zaza Mamulaishvili, President and Chief Executive Officer, commented:

"We are delighted with the excellent early test results from Zone 19 of T-39 well, which support the Company's plans for a Taribani field development. Current results demonstrate that we have highly productive Eldari B formation, which has been tested first time in Zones 19, 23 and 25 of Niko-1 well and delivered flow rates of 960 bbls/d of light oil and 1 mmscf/d of wet gas.

"The drilling practices used in Niko-1 drilling operations did not allow for drilling a gauged wellbore and, subsequently, very poor cement integrity around the casing led to the production of formation sediments preventing the continuous flow of hydrocarbons into the wellbore after 45 days of well testing. Despite a good reservoir response to a mechanical stimulation, unfortunately the Company has now experienced a similar type of cement integrity issue at Ud-2 well which was drilled by a previous operator in 1981. This prevented the stable flow of natural gas at a higher flow rates. As a large section of the wellbore is usable, the option of sidetracking the unusable section of the well represents a significant cost saving over drilling a new well.

"It is very encouraging that our continued improvement in drilling and cementing practices in Block 12 allowed the Company to drill nicely gauged wellbore of T-39 (like in Dino-2 and T-45), important precondition for achieving a good cement integrity around the casing, ensuring sustainable and continuous oil and gas production.

"This is a significant milestone for the Company. Successful completion of the three-well drilling campaign in Taribani with very encouraging early test results and further reconfirmation of Middle Miocene aged gas presence in F sands of Mtsare Khevi Gas Complex, brings us closer to becoming a profitable operator with significant growth potential."

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

Enquiries:

 
Frontera Resources               (713) 585- 3216 
Zaza Mamulaishvili 
[e-mail] 
 
  Cairn Financial Advisers LLP   [phone] 
Jo Turner / Liam Murray 
WH Ireland Limited               [phone] 
James Joyce / Alex Bond 
Yellow Jersey                    [phone] 
Tim Thompson 
Harriet Jackson 
Henry Wilkinson 
 
 

Notes to Editors:

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). Paolo Pratelli, Frontera's Vice President of Operations, is the qualified person who reviewed and approved the technical information contained in this announcement on behalf of Frontera Resources. Mr. Pratelli has extensive experience in the oil and gas industry and holds a degree in chemical engineering from the University of Siena (Italy).

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: bbls/d - means barrels per day. 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. PSI - means pounds per square inch. scf/d - means standard cubic feet per day. SG - means Specific Gravity.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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July 19, 2018 02:00 ET (06:00 GMT)