Development of Zone 9, Taribani Field Unit, Georgia

Frontera Resources (London Stock Exchange, AIM Market – Symbol: FRR), an independent oil and gas exploration and production company, today announces an update on its operations in the Taribani Field Unit, Block XII, Georgia.

Summary:

  • Taribani field development to commence in Zone 9, Q2 2007
  • Analysis of cores and logs taken from the recently drilled Dino #2 well revealed thicker sand packages and better than expected reservoir characteristics for Zone 9.
  • Baker Hughes’ Frac-Pack completions to provide technically effective and cost efficient approach to sediment control during production operations.
  • Program to begin with re-entry and re-completion of Dino #2 well
  • Up to twenty new wells envisaged over three year time frame

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

"Our analysis of the extensive data obtained from recent drilling and geophysical operations has provided us with the necessary confidence to prioritize and advance our plans to develop Zone 9 within the Taribani Field.  The completion design solutions that have been identified, with the assistance of Baker Hughes, to manage sediment flow during production operations encourage us that the Taribani Field Unit can realize significant value for our company."

Enquiries:

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

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

Since completion of testing operations at the Dino #2 well in August 2006, Frontera has undertaken detailed analysis of the extensive coring, logging and production data obtained from the well, in order to customize new well-completion designs for future wells and prioritize plans for developing four target reservoir horizons; Zones 9, 14, 15, 19. These new engineering designs apply industry-standard solutions to the specific reservoir properties of the Taribani Field, in order to overcome sediment obstruction in future wells and ensure sustainable flow from the field’s reservoirs.

Frontera has committed to developing Zone 9 as a consequence of drilling operations at the Dino #2 well earlier this year in which the Company encountered 21 meters of gross pay sands in Zone 9. As expected, the Pliocene age oil-bearing reservoir interval, Zone 9, was encountered from 2,300 meters to 2,311 meters. In addition, a previously unmapped oil bearing reservoir interval was encountered above Zone 9 from 2,275 meters to 2,285 meters. Historically, twelve wells had evidence of oil when perforated in Zone 9, with the best well, #23, exceeding 700 BOPD during initial production.

Based on recent analysis of Zone 9 reservoir data, a new well-completion design for this horizon has been engineered in order to control sediment flow during production operations. Analysis of data obtained during coring and logging operations of the Dino #2 well not only revealed a fractured reservoir, but also demonstrated that this reservoir’s rock properties are particularly well suited for the artificial inducement of fractures to further enhance permeability. As a result, Frontera has evolved its development well design for Zone 9 from drilling short-reach horizontal wells to conventional vertical wells with the addition of Baker Hughes Frac-Pack completions. These completions are expected to achieve similar production/recovery results obtained from drilling short-reach horizontal wells through artificially inducing extensive additional fracturing in the reservoir from vertical wells. Sediment control will come from applying packing technology whereby screens are installed and gravel is pumped into the well as a slurry, "packing" it behind the screen at the formation face. The gravel and screen are designed to trap the reservoir formation sediment before it can enter the well and cause obstruction. While achieving the same result, it is anticipated that this design should provide a more technically effective and cost efficient approach versus development through short-reach horizontal drilling.

In the deeper Zone 14, 15 and 19 objectives of the Taribani Field, analysis has shown that horizontal well completions are likely best suited for these different reservoir types with the application of completion techniques that will likely utilize expandable liners and screens, together with other fit-for-purpose applications, in order to control sediment flow. Timing of bringing the deeper horizons into development is currently being finalized in sequence with Frontera’s plans to focus first on Zone 9.

Development drilling will commence in Q2 2007 with the re-entry of the Dino #2 well. New wells will follow into the Zone 9 horizon, including the drilling of a new well in 2007 at a location approximately 900 feet up-dip on the Taribani Field structure from wells that encountered the lowest known oil in the field at this horizon. This location has been identified as a result of processing, interpreting and integrating approximately 40 kilometers of new 2D seismic data, acquired in late 2005, into the existing 3D mapping of the field. The new data revealed the Taribani Field to be a larger structure than previously thought and confirmed important new drilling locations high on the structure.

The operational decisions outlined in today’s announcement are based on extensive data from the recent drilling and geophysical activity. This data has validated several important elements of Frontera’s field model across four target reservoir horizons. Specifically, data has confirmed the following:

  • Frontera’s ability to drill a horizontal well successfully into the over-pressured reservoirs that exist within the field;
  • the presence of fractures in Zones 9, 14 and 15;
  • fracture systems can be successfully encountered via horizontal drilling methods;
  • matrix porosities in Zones 9, 14 and 15 can be higher than originally projected by Netherland, Sewell & Associates in its reservoir engineering assessments of the Taribani Field, thereby verifying a larger hydrocarbon storage capability for the target reservoirs;
  • objective reservoirs can be thicker and more numerous than originally estimated; and
  • the existence of good quality 38 degree API oil, produced under naturally high reservoir energy.

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 per cent 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.

2.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 situated 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. Additionally, Netherland, Sewell & Associates has assigned as much as 36 million barrels of unrisked resource potential associated with five deeper horizons in the field.

3.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.

4.This release contains certain forward-looking statements, including, without limitation, expectations, beliefs, plans and objectives regarding the potential transactions, potential drilling schedule 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, 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.

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