With respect to the application for a permit to develop an underground natural gas storage facility in the Brasil field in northern Mexico, the Comision Reguladora de Energia (CRE) informed Frontera that consideration for granting an award of a storage permit has been delayed due to the Mexican Energy Ministry focusing on the energy reform legislative proposals, currently being considered by the Mexican legislature.

With respect to the existing pipeline permits held by Frontera and the expected amendment of those permits, the CRE indicated its willingness to consider an extension of the current pipeline permit, provided Frontera files the requisite information and observes all necessary procedures for the extension request.

After this extension is granted, Frontera will proceed with the activities necessary to file for the amendment of the current pipeline permit in order to add a new pipeline segment beginning at Station 19 of Mexico’s National Pipeline System south of Reynosa, Tamaulipas, and extending to a central distribution point in Monterrey, Nuevo Leon.

Frontera expects to conduct a valuation of the rights of way for this new pipeline segment, additional gas flow modeling and engineering design work prior to the filing of the application for amendment of the current pipeline permit.