Republic of Georgia-focused Frontera Resources Corporation's operations update, released Monday, revealed that the firm's Mtsare Khevi gas complex has "significantly expanded in potential and area".
Frontera said that throughout the first few months of this year efforts have continued to evaluate the extent of the Mtsare Khevi field's gas potential. In support of this, approximately 40 Soviet-era wells throughout an expanded area have been analyzed and many of these encountered gas.
The firm added that, based on its internal estimates, analysis has revealed significant gas potential throughout the area of as much as 1.2 trillion cubic feet of gas in place and approximately 700 billion cubic feet of recoverable gas.
"This is a massive increase on the 0.5 Bcf recoverable previously attributed," commented oil analysts at Frontera's London-based house broker finnCap.
However, despite this good news, Frontera also reported that a series of problems – including extreme winter weather conditions during 1Q 2012, a slower-than-expected government permitting process and delays associated with locating and modifying customized gas compression components – caused a delay to the installation of the firm's planned gas sales infrastructure. Instead of the original target month of April, this installation is now scheduled for July.
Since January, the firm's oil sales have generated average monthly revenues of $760,000 and these are now projected to increase to $1.2 million when gas sales begin in 3Q 2012.
Meanwhile, the firm is currently negotiating a strategic partnership for the development of the Block 12/Taribani field ahead of the start of a four-well campaign.
"Our multiple initiatives throughout Block 12 in Georgia are advancing with an objective of increasing revenues and profitability in the near term," commented Frontera Chairman and Chief Executive Officer Steve Nicandros.
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