The US' Frontera Resources said Tuesday it has discovered "extensive" new gas resources at the Mtsare Khevi field onshore Georgia, meaning a fivefold increase in the field's recoverable gas reserves.
Frontera, which currently produces small volumes of gas in the former Soviet state, said the best estimate reserves for the field could now be as high as 3 Bcf.
The new estimates follow the drilling of well 32 at the Mtsare Khevi field.
"The successful results achieved by well 32 are extremely significant in that they not only serve to expand and enhance the value of the Mtsare Khevi field's gas resources, but also confirm the presence of gas in the western portion of block 12 which may lead to further upside prospectivity," Frontera CEO Steve Nicandros said in a statement.
"This confirmation provides important technical support for gas exploration efforts related to other fields as well as our nearby shale gas play where we believe large gas resources are contained in unconventional reservoirs," he said.
Nicandros said the company was sticking with a target of reaching production from Georgia of 5,000 b/d of oil equivalent by the end of 2013.
"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 $4-6/Mcf," he said.
The field is located less than 10 km from the national gas distribution pipeline grid, so the new discovery will serve to accelerate the addition of new infrastructure to commence gas sales, Frontera said.
"When these gas sales commence, the increase in production will provide Frontera with the additional cashflow to significantly enhance the profile of the company and contribute to its target of reaching 5,000 boe/d by the end of 2013."
