A development well in the northwestern portion of the Mtsare Khevi field’s Shallow Fields Production Unit, Block 12, in the country of Georgia encountered extensive new gas resources, according to Frontera Resources Corp.

Testing is currently underway at the recently announced Mtsare Khevi Well #32 that was drilled in the undeveloped northwestern portion of the field, approximately 4.0 km from Well #31. After drilling to a planned depth of 370 m (1,221 ft), log analysis indicated that approximately 33 m (109 ft) of gas-bearing net pay were penetrated among the known Zones I, II and III within the field.

A 14-m (46-ft) section of the lowest portion of the identified pay zones, Zone I, delivered a rate of approximately 441,000 cubic feet per day (cf/d) on a 9.0-mm choke and 671,000 cf/d on a 16-mm choke. It is estimated that the absolute open flow for Zone 1 is approximately 847,000 cf/d. Testing operations will progress up hole to Zones II and III in order to determine total gas deliverability from the well.

Based on results observed to date, Frontera believes that Well #32 has successfully expanded the size of the Mtsare Khevi field’s gas potential by as much as five times the previously identified recoverable gas estimates.

Situated less than 10 km from the national gas distribution pipeline grid, the new discovery will serve to accelerate the addition of new infrastructure to commence gas sales. Construction engineering plans are currently under review to determine the most efficient timeline for installation, noted Frontera.

In other operations within the field, the recently drilled Mtsare Khevi #31 well has been placed on production at an expected rate of approximately 10 barrels of oil per day (b/d) from a 7.0-m (23-ft) reservoir section. The well penetrated approximately 22 m (73 ft) of net pay, including 6.0 m of gas-bearing reservoir sands.

Drilling operations will now continue at Well #41, which is the third of a planned 20-well program over the next 24 months designed to exploit multiple Upper Pliocene sandstone reservoirs situated at a depth of approximately 300 m.

Frontera, with 100% interest, operates the field.

"The successful results achieved by Well #32 confirm the presence of gas in the western portion of Block 12, which may lead to further upside prospectivity. This confirmation provides important technical support for gas exploration efforts related to other fields situated within the Shallow Fields Production Unit as well as our nearby Shale Gas Play Unit where we believe large gas resources are contained in unconventional reservoirs associated with the Maykop shales,” said Steve Nicandros, chairman and chief executive officer, Frontera.

“Overall, the success achieved from recent drilling has significantly enhanced the value of the Mtsare Khevi field and will now set us on a course to accelerate gas sales into the local market where prices range from $4 to $6 per thousand cubic feet. When these gas sales commence, the increase in production will provide Frontera with the additional cashflow contribute to its target of reaching 5,000 b/d by the end of 2013."