Statoil Commences Drilling at OzEpsilon-1 Well in Georgina Basin in NT

Canada-listed PetroFrontier Corp. reported Tuesday that the fifth well in its 2014 Work Plan and Budget (the 2014 WP&B) has now spud and drilling is underway. The OzEpsilon-1 well is a vertical exploration well located in Exploration Permit 128 in Georgina Basin in Australia's Northern Territory. This is the fifth and final vertical test well to be drilled as part of the 2014 WP&B. All wells will include an extensive open hole evaluation program and up to three of the wells will be considered for future hydraulic fracture stimulation and production testing.

Prior to the spud of the OzEpsilon-1 well, Statoil Australia Theta B.V., PetroFrontier's joint venture partner and the operator of the 2014 WP&B, successfully drilled and cased the fourth well of the 2014 WP&B, OzDelta-1. All of the planned open hole well evaluation activities have been completed and are now being analyzed. A total of 105 feet (32 meters) of core were recovered in a continuous coring process, which penetrated the Lower Arthur Creek and Thorntonia formations.

Subsequent to drilling the OzEpsilon-1 well, the drilling rig will be demobilized and the hydraulic fracture stimulation and production testing of up to three of the previously drilled wells will commence in due course. Readers are encouraged to review the current investor presentation online to see both the well locations and seismic cross sections.

On Jan. 7, PetroFrontier announced that Baraka Energy & Resources, a 25 percent working interest owner in EP127 and EP128, was disputing the 2014 WP&B on these blocks. All three parties (PetroFrontier, Statoil Australia Theta B.V., and Baraka Energy & Resources Ltd.) have recently agreed to settle the court action subject to the execution of a deed of settlement and release reflecting the agreed terms. As Baraka has elected not to contribute to the 2014 WP&B, its working interest will be diluted proportionally to its cash calls. The working interest will then be transferred to Statoil Australia Theta B.V. in accordance with the terms of the Amended Farm-In Agreement between Statoil Australia Theta B.V. and PetroFrontier.


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