Frontera Resources Corporation, an independent oil and gas exploration and production company, has received the requisite shareholder consent to proceed with its planned funding, debt exchange and merger, which was announced on 28 June 2011.

The Company recently announced a funding plan that could provide up to £28.3 million (US$46 million) in new funding, coupled with: (i) an exchange offer for the simultaneous conversion into equity of at least 75% of the Company's outstanding convertible loan notes due 2012 and 2013 and the rollover of the remaining loan notes into new convertible loan notes due 2016; (ii) the conversion of 100% of the outstanding management loans into equity; and (iii) the effective redomicile of the Company by way of merger with a new holding company, incorporated in the Cayman Islands. The transaction will serve to simplify and strengthen the Company's balance sheet, as well as enhance Frontera's operating and financial flexibility.

The Exchange Offer remains open until 26 July 2011 and is conditional upon, amongst other matters, a minimum of 75% of the convertible loan notes being exchanged for equity.

The net proceeds of the funding plan, consisting of an equity placing, including subscriptions from management, of £6.8 million (US$11 million) before expenses, coupled with a £21.5 million (US$35 million) Standby Equity Distribution Agreement ("SEDA"), could provide up to approximately £26.8 million (US$43.5 million) of new funds for investment. Initially, the net proceeds of the funding will be used to accelerate the next phase of planned development drilling campaigns from the Shallow Fields Production Unit and the Taribani Field Unit. These campaigns are designed to increase oil and gas production and associated reserve bookings from three undeveloped and underdeveloped fields.

Assuming free cashflow from operations and/or availability of funds under the SEDA, Frontera will also continue to fund exploration drilling at the highly prospective Basin Edge Play Unit, as well as to simultaneously advance efforts to seek a strategic partner for ongoing exploration work associated with this asset. In addition, the Company will continue the evaluation of the significant potential associated with its 2,000 square kilometre Shale Gas Play Unit.

The transaction is expected to become effective upon the admission to trading on AIM, of the new holding company of the group on 2 August 2011. Full details of the transaction are set out in the announcement dated 28 June 2011, and completion remains subject to satisfaction of all of the conditions set out therein.

Steve C. Nicandros, chairman and chief executive officer, commented: "Once we conclude this transaction, which represents an important and transformational milestone in Frontera's growth plans, we expect the Company's value to better reflect the significant prospectivity identified by our historical investments throughout our extensive portfolio. Moreover, Frontera will be well positioned to realize this value from its planned work programs."

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