Extended Testing of TEC-10 Well Results in Significant Increase in Oil Production at Tecolutla

Tuesday, August 7, 2018

Press release from International Frontier Resources

International Frontier Resources Corporation ("IFR" or the "Company") (TSX-V: IFR) (OTCQB: IFRTF) is pleased to announce the results of the extended testing operation of the TEC-10 well drilled by its joint venture, Tonalli Energia ("Tonalli") at Tecolutla onshore oil and gas block in Mexico.

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On August 6, 2018, Tonalli completed an 18-day flow test of the primary zone interval with the following results:

  • Daily oil production of the TEC-10 well increased throughout the extended production test from the initial low flow rates observed on July 23, 2018 to more than 175 barrels of oil per day ("bopd") at the end of the production test on August 6, 2018.
  • Over the last 72 hours of the extended well test, the TEC-10 well produced an average of 154 bopd and 300 barrels per day ("bpd") of total fluid (51% crude oil by volume).
  • During the last 24 hours of the extended well test the TEC-10 well produced 178 barrels of crude oil and 305 barrels of total fluid (58% crude oil by volume).
  • During the 18-day test period the TEC-10 well maintained a consistent daily flow rate of 285-315 barrels of formation fluid while flowing through a restricted 12/64" surface choke.
  • Flowing wellhead pressure increased from 260 psi on July 23, 2018, to more than 900 psi at the end of the testing period on August 6, 2018.
  • The initial bottom-hole pressure data indicates that the TEC-10 well production capacity is significantly higher than the restricted flow rates observed during the extended testing operation.

"IFR is encouraged by the economic results obtained over the extended production test including the increase in oil production and the high deliverability of the TEC-10 well," stated Steve Hanson, President and CEO of IFR. "The results from TEC-10 are a significant improvement from the initial figures released and show great promise for development of the field."

The data obtained during the extended well test are consistent with Tonalli's technical model where the existing vertical wells have only partially depleted the El Abra reservoir at this interval depth in the South-Western portion of the Tecolutla Block.

A graphical depiction of the test results since perforation can be accessed by clicking on the following link:

Perforation and stimulation operations of the TEC-10 well commenced in late June targeting multiple zones over 138m of gross El Abra reef. Initial results of the TEC-10 flow tests from the lower intervals and the upper zone target, Interval C were released on July 23, 2018.

The TEC-10 well has been shut-in to record pressure data that will provide additional information to be used for the full development of the asset. The pressure build-up period is expected to last between two to three weeks. Tonalli is continuing to work with service providers in Mexico to allow for the TEC-10 well to resume production testing operations after the shut-in period.

Tonalli intends to recommence the well testing operations in order to monitor the performance of the TEC-10 well before permanent production and water disposal facilities are installed. Tonalli's technical team will continue to evaluate the test data to determine the optimum production rate for the TEC-10 well to maximize hydrocarbon recovery.

TEC-11 Horizontal Well Planning Underway

Tonalli is planning to commence construction of the surface pad site for the first horizontal well ("TEC-11") within the next few weeks and expects drilling operations to commence in late Q4-2018, subject to final regulatory approvals. The TEC-11 horizontal well will be drilled in the Northern extension of the Tecolutla block targeting a portion of the El Abra reservoir that has not been accessed due to surface topography.

This new well will be the drilled from the existing TEC-2 surface location and utilize the knowledge obtained during the drilling and completion of the TEC-10 directional well. Tonalli expects that the reprocessed 3D seismic data and application of horizontal drilling will mitigate the risk of encountering localized geological features that limit well performance. The TEC-11 Horizontal well is designed to maximize the contact of the Horizontal leg of the wellbore with the upper portion of the prolific El Abra reservoir.

Please see the Tec 11 drilling map by clicking on the following link:

Through its joint venture, IFR was one of the first foreign companies to participate in Mexico's historic reform of the oil and gas sector. The Tecolutla block was awarded to Tonalli as part of the first round and third call of Mexico's oil and natural gas "mature fields" bid round ("Round 1.3"), the first in almost 80 years.