Based on available geologic data which we believe reliable, we expect that this prospect will contain approximately 100 million barrels of oil and, if successful, would be highly prolific. Of the 15,000 prospective acres selected, 8,200 were acquired in a Bureau of Land Management federal lease sale, held on February 6 and 7, 2007. Lease prices and full prospect details will be reported as soon as the leasing program is completed.
Certain operating oil companies have shown interest and each will be offered the opportunity to earn a 50% working interest in the prospect, by paying 100% of the costs for the drilling and completion of the first well, which is expected to cost approximately $1.5 million.
Frontier currently has a 25% working interest in the project and after bringing in a drilling partner, Frontier's working interest will be proportionately reduced to 12.5%. Frontier will responsible for 12.5% of all costs, including the drilling of development wells, subsequent to the drilling of the first well. The asset value and cash flow would be very significant for the company in the event of success.
About Frontier Energy Corporation
Frontier is newly-recapitalized exploratory oil and gas business headquartered in Las Vegas, Nevada. Frontier has one gas lease under contract and intends to enter into drilling, completion and distribution agreements to exploit this lease. Frontier also intends to enter into additional leases, as its funding permits.
Except for the historical information presented, the above statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 or regulations there under. These forward-looking statements are subject to risks and uncertainties, and actual results may differ materially. These risks include the economic health of the oil and gas industry, competitive pricing pressures, completion of possible acquisitions, success at integrating and operating any acquired operations and the availability of necessary financing. These statements speak only as of above date, and Frontier Energy Corp. disclaims any intent or obligation to update them.
