Frontera Resources Corporation, an independent oil and gas exploration and production company, reports that, following the successful completion of the equity fundraising package and debt exchange announced on 2 August 2011, with a significantly strengthened balance sheet it is this month commencing its new workplan on the Mtsare Khevi and Mirzaani fields within its Shallow Fields Production Unit in the country of Georgia.

The equity financing package could provide up to £26.8 million (US$43.5 million) for Frontera’s planned development drilling and operations campaigns throughout its portfolio in Georgia. In addition to which, the balance sheet has been strengthened by the conversion of US$112.6m of debt, including US$9.2m of management debt, into equity and substantially all of the remaining US$18.4m of old loan notes into new convertible notes maturing in 2016. Overall, the transaction serves to simplify and strengthen the Company’s balance sheet, as well as enhance Frontera's operating and financial flexibility.

The net proceeds of the equity funding raising of £6.8 million (US$11.0 million) before expenses, coupled with a £21.5 million (US$35.0 million) Standby Equity Distribution Agreement (“SEDA”), could provide up to approximately £26.8 million (US$43.5 million) of new funds for investment. In both the fundraising and the debt conversion, the new shares were issued at a price of 4p per share.

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