Since January 2009, Frontier Energy Corporation has been ambitiously developing a new business strategy to optimize the company's opportunities, resources and expertise in an effort to benefit from current market conditions in the oil and gas industry. The Company has retained experienced oil and gas personnel, developed strategic alliances, evaluated several oil and gas investment opportunities and initiated discussions for potential funding, all which have resulted in a reinvigorated plan.
The elements of Frontier's new business strategy, generally, are described as follows:
Phase 1 -- Acquisition of oil and gas properties that have production or productive capability
Frontier is presently performing due diligence of certain producing properties, primarily in Texas, for potential acquisition. The present production and cash flow of these projects can be characterized as nominal, but the Company has identified that all of the opportunities that are being evaluated have attractive incremental production potential that can be exploited with nominal incremental investment. Frontier expects to complete its assessment, and make an announcement regarding its participation of these properties, imminently.
Phase 2 -- Acquisition of oil and gas properties containing non-producing wells
Subsequent to executing Phase 1, the Company expects to implement Phase 2 of its plan by acquiring oil and gas properties that hold established oil and gas potential but which are not producing. Frontier is presently assessing several oil and gas projects that contain numerous "shut in" or non-producing wells that, it believes, can be returned to profitability with minimal investment in a very short time. Acquisition of any of these projects can occur quickly after Phase 1.
Phase 3 -- Development Drilling
Frontier has identified that all of the projects that it is currently considering have the ability for development drilling. Once the Company has maximized Phases 1 and 2, it will consider drilling additional wells that are cost effective, in established fields where geology is understood, or where risk can be managed within the abilities of the Company. Evaluation of the drilling of new wells will be an ongoing process in the context of Frontier's new strategy but will only be pursued after existing assets are optimized.
Frontier recognizes that the recent downturn in the oil and gas industry has created exciting opportunities. With the implementation of its ambitious new plan, the Company is positioning itself to take advantage of the current market conditions to achieve its goal of enhanced shareholder confidence and value. The Company is committed to doing this by improving transparency to its shareholders and by providing regular and timely disclosure as developments occur and milestones are accomplished.
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