2017 Annual Results: Highlights
- Revenues from crude oil and gas sales for 2017 totalled US$2.6 million.
- Collected the full amount of the arbitration award in the total amount of US$2 million.
- Eliminated US$32.2 million of debt and associated debt service, which cleaned the balance sheet and significantly improved the financial position of the Company.
- Net loss of US$17.9 million, or US$0.002 per share on a fully diluted basis. Of this total, approximately US$1.0 million is reflected in one-time charges associated with restructuring of debt.
Post Period Operations Update
As previously announced by the Company on 25 May 2018, the well T-39, the third well of the three-well drilling campaign at the company's Taribani complex, situated within the Block 12 license in Georgia, has been sidetracked from the existing wellbore and drilled to a vertical depth of 2800 m into the Eldari A formation. Drilling of this interval has been successfully completed under budget, ahead of the drilling schedule. Following completion of the open hole well logging, which confirmed 102.5 m of combined pay for Zones 9, 14 and 15, the 7 in. casing string has been set and cemented. Cement Bond Logs confirmed very good cement integrity around the casing.
The company made a decision to continue well deepening operations with the intention that Zone 19 of the Eldari B reservoir to be perforated, tested and in order to further enhance the well deliverability, produced together with Zones 9, 14 and 15 of the Eldari A reservoir, once flowing pressure of Eldari A and B reservoir targets are equalised.
On 28 June 2018, the company successfully completed the T-39 well drilling operations within budget, to a total depth of 3056 m into the Eldari B formation. The 5 in. liner has been set and cemented with good cement integrity around the casing confirmed by Cement Bond Log. Wireline logging data processing of the interval situated between 2800 m and 3056 m has confirmed 29.5 m of pay for Zone 19 and pay interval identifications made during the drilling operations. The Company confirms that it has observed oil stained cuttings and multiple significant oil and associated gas shows during drilling of the recently drilled interval with 2.16 SG drilling mud weight, indicating a highly charged hydrocarbon formation.
Testing of the well is expected to commence on 1 July 2018 and the Company looks forward to updating the market in due course.
According to CPR estimates for Zones 9, 14, 15 and 19 of the Eldari A and B reservoir in Taribani, 118.2 million bbls of oil is considered to be recoverable. 3.2 trillion ft3 of gas is considered to be recoverable for Gareji formation, situated below Eldari B reservoir in Taribani field.
Zaza Mamulaishvili, President and Chief Executive Officer, commented:
“During the year 2017, the Company eliminated approximately US$32.2 million of debt which is an important milestone for the Company's growth plans. This has simplified and strengthened our balance sheet, greatly enhanced the Company's operating and financial flexibility, and positioned us well for the implementation of the ongoing operational campaign in 2018.
"We are very pleased with the successful completion of the well T-39 drilling operations into the Eldari A and B reservoir. Due to continuous improvement and efficiency of the drilling operations, the well has been drilled to the target Zones in less time than anticipated before the commencement of the three-well drilling campaign. Excellent condition of the gauge hole and vey good quality cement job represents perfect evidence of the current operational success. We are very excited to commence the testing of Zone 19 in addition to the already tested and flowed Zones 9, 14 and 15 in the Taribani field. As a reminder, Zone 19 has previously been tested in Niko-1 well and produced light, sweet crude oil for the duration of 40 days at a rate of 960 barrels per day, however poor cementing and well bore conditions prevented sustainable production. We believe that the current operational success will ensure long term, sustainable production from Zone 19.”
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/03072018/frontera-resources-corporation-announces-final-results-and-post-period-operations-update/