Oil and gas explorer Frontera Resources (LON:FRR) has reported that work on its Mtsare Khevi complex in the onshore Kura Basin has significantly boosted gas potential at the field despite announcing a delay in gas sales from April to July.
A new effort to locate and analyse around 40 Soviet era wells situated in Block 12 between the Caspian Sea and the Black Sea in eastern Georgia has increased the area prospective for gas by around 80 square kilometres.
The company estimates it could have as much as 1.2 trillion cubic feet (tcf) of gas in place with around 700 billion cubic feet (bcf) recoverable, a huge increase on the 0.5 bcf recoverable previously attributed.
“The result has been an expansion of the area that is now considered prospective for gas exploitation,” the company said in a statement today.
However, due to extreme winter weather conditions in the first three months of 2012, slower than expected government permitting processing, and delays in locating and modifying customised gas compression components, sales have been delayed until July.
Since January, oil sales generated average monthly revenues of US$760,000.
The company also announced that negotiations with a strategic partner for Block 12 are ongoing.
This will aid the development of the Taribani field and is expected to add 1,900 bopd and around US$5.7 million in monthly revenue, much higher than the current income of US$228,000 per month.
A five-well drilling programme is also expected to commence later this year on the Mirzaani field.
Chairman and chief executive Steve C. Nicandros said: “Frontera's progress has continued at a steady pace throughout the first half of 2012.
“Our multiple initiatives throughout Block 12 in Georgia are advancing with an objective of increasing revenues and profitability in the near term.
“Simultaneously, we continue to progress good efforts to secure an important strategic partner for our work in Block 12.”
Additionally, Frontera signed a Memorandum of Understanding with the State Service for Geology and Mineral Resources of Ukraine which paves the way for the company to establish its presence in the country.
“Looking beyond Georgia, timing has been favorable to advance our Greater Black Sea Strategy commencing with an identified objective in the Ukraine that represents a significant new addition to our company's growth,” Nicandros added.
Shares rose 0.245 pence, or 36 per cent, on the news to 0.92 pence.