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International Frontier preps for Tecolutla workovers in the near-term and new drilling in Q3

Calgary-based International Frontier Resources (ticker: IFR) announced its fourth quarter and year-end operating results for 2016 Wednesday. In the company’s release, IFR said it anticipates its Mexican joint venture, Tonalli Energia, will begin wellhead servicing in preparation for workover of existing wells on its Tecolutla acreage in the near term and plans to commence drilling operations in the third quarter of this year.

Tonalli has finalized surveying of the extensions of the existing drill sites to accommodate new drilling and has minor road upgrades underway, the company said in the release. A logistics and measurement plan has been developed to move production from the Tecolutla asset through existing infrastructure in Mexico’s Poza Rica area. A measurement skid is currently being engineered and going through a procurement process for its construction.

“Our internal technical evaluation continues to confirm our original assessments that Tecolutla has the potential to be a highly economic project at current commodity prices,” IFR said. “Tonalli believes that improved drilling technology and production techniques will enable it to increase the recovery factor of its Tecolutla asset.”

Tonalli is currently engaged with regulatory agencies in Mexico including CNH, SENER and ASEA, to obtain the major permits and authorizations required to commence field operations. IFR intends to submit the final applications for these permits and authorizations by the end of April 2017. Once submitted, each application will undergo a final review process by the applicable Mexican regulatory authority.

International Frontier Resources IFR room to run in Tecolutla

IFR plans to finalize prequalification for bidding Round 2.3 in early May

Also as part of the company’s press release today, International Frontier Resources reaffirmed that Tonalli is in the process of analyzing and assessing block data from the CNH data room for the onshore third tender of round two of Mexico’s oil and gas reform. Tonalli plans to finalize the prequalification application in early May.

The Mexican government announced the third tender of round two on November 14, 2016, which will be the eighth upstream bid round in Mexico since the energy reform began. Fourteen onshore blocks, averaging 185 km2 (72 sections) are available nationwide: six in the Southeastern Basin, four in the Burgos Basin, three in the Veracruz Basin and one block in the Tampico-Misantla Basin, which offsets the Tecolutla Block. Covering a total of 2,595 km2, these development and exploration blocks contain 25 oil and gas fields with existing 3D or 2D seismic coverage.

The Mexican government has estimated that together the blocks contain prospective exploration resources of approximately 251 million barrels of crude equivalent and remaining original extraction volumes of approximately 328 million barrels of crude oil equivalent.

International Frontier Resources ( IFR ) map on resources offered in Round 2.3

International Frontier Resources announces Q4 and year-end results

In addition to the company’s plans for the coming year, IFR released its fourth quarter and year-end update, showing stronger performance sequentially and annually. The company reported a consolidated net loss of $1.7 million ($0.02 per share) for the three months ended December 31, 2016, compared to a net loss of $3.4 million ($0.05 per share) for the same period in 2015. On a full-year basis, IFR reported a consolidated net loss of $3.3 million ($0.03 per share) compared to a net loss of $4.4 million ($0.06 per share) for full-year 2015.

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