Frontera Hits Hydrocarbons at Shallow Fields Unit in Block 12

Frontera has announced a discovery in a new, undeveloped extension of the Mirzaani Field within its Shallow Fields Production Unit, Block 12, in the country of Georgia.

Drilling operations at the Mirzaani #2 well have recently been completed in an undeveloped area of the Mirzaani Field known as Mirzaani Field Northwest. This well encountered multiple hydrocarbon bearing intervals within an extension of the field that had been identified as undeveloped based on new field mapping that was completed in 2008. The new discovery is expected to open for future drilling an undrilled area of the field that Frontera estimates to contain potentially significant volumes of recoverable oil reserves within multiple reservoir intervals situated at depths between 800 meters and 1,300 meters.

The Mirzaani #2 well is expected to not only increase production, but will also serve to improve understanding of the potentially extensive prospectivity associated with Mirzaani Field Northwest. In addition, the discovery well is expected to provide the basis for commencement of a feasibility study for a new drilling campaign within the Mirzaani Field proper that would be designed to deepen existing wells in order to efficiently develop similar undrilled horizons.

The Mirzaani #2 well is currently undergoing preparations to commence production testing of four reservoir intervals that were encountered within the well. Designed to confirm multiple hydrocarbon bearing zones in the Lower Pliocene age Shiraki formation, the well was drilled to a total depth of 1,250 meters.

During drilling operations, higher than anticipated reservoir pressures were encountered when drilling through hydrocarbon bearing intervals that resulted in oil and gas flowing to the surface. The resulting well-control challenges led to a longer than anticipated drilling time for the Mirzaani #2 well. A preliminary review of data obtained while drilling has revealed approximately 60 gross meters of oil and gas bearing sands within the well. Production testing of the well is expected to commence within the next two weeks.

Discovered in 1932, the Mirzaani Field has historically produced approximately 7 million barrels of oil, but contains many undrilled locations across the structure. The Mirzaani #2 well is the first new well to be drilled in the field since 1972. In 2006, Frontera acquired approximately 100 kilometers of new seismic data over the field area as part of an effort to re-map and identify new potential associated with the field. Work is currently ongoing to update reserve estimates and results from the Mirzaani #2 well will contribute to this new assessment.

Steve C. Nicandros, Chairman and Chief Executive Officer, commented, "The Mirzaani #2 discovery well represents an important new extension of the Mirzaani Field that we believe will provide the basis for continued growth of the Shallow Fields Production Unit where Frontera has the potential to create attractive near term production and reserve growth."

Frontera's Shallow Fields Production Unit is located in the central portion of Block 12 and represents what the company believes to be an extensive trend of low-cost, low-risk oil and gas reserves. Containing four discovered yet undeveloped or underdeveloped fields that have additional exploration potential, objectives are considered to be traditional, well-known reservoirs of Pliocene and Miocene age that are situated at depths from 10 meters to 1,500 meters.