The company claimed that the resulting net proceeds will be used to fund the company’s ongoing oil and gas development programs within its Shallow Fields Production Unit, Block 12, located in the country of Georgia.
All of the net proceeds of the placing will reportedly go towards the next phase of continued investment in work programs that are aimed at increasing oil and gas production and associated reserve bookings from the Mirzaani and Mtsare Khevi fields, two of four undeveloped fields within the Shallow Fields Production Unit.
New drilling operations are scheduled to begin in the third quarter of 2009 and are planned to be completed by year end. Frontera expects that completion of these work programs will increase daily production to about 1,000 barrels of oil equivalent per day.
At the Mtsare Khevi Field, a portion of the proceeds will go towards drilling three new development wells in continuation of an initial drilling campaign that commenced during the third quarter of 2008. This program resulted in the drilling of 14 new wells in the field that initiated oil production, the company said.
Tthe company now plans to invest in the construction of new infrastructure to produce and sell gas from the field into the local Georgian market.
Proceeds will also fund the continuation of new drilling operations at the Mirzaani Field. The company said that two new wells are planned in follow up to the recent drilling of the Mirzaani no. 2 well. The new wells will continue to target reservoirs situated between 800 meters and 1,500 meters in depth. In addition, new investment is planned to add production from a workover program of existing wells within the Mirzaani Field.
