Private Placement of Convertible Notes

Frontera Resources Corporation (London Stock Exchange, AIM Market - Symbol: FRR; OTCQX Market, U.S.A. - Symbol: FRTE), an independent oil and gas exploration and production company, today announced completion of a private placement of $23.5 million principal amount of its 10% Convertible Notes due July 2013 (the "Notes") and the release from escrow of the remaining $5 million in proceeds from its May 2007 private placement of convertible notes.

The resulting $28.5 million in newly available capital will be deployed to continue to advance ongoing work programs throughout Frontera's primary business units within its Block 12 license area in the country of Georgia.

Steve C. Nicandros, Chairman and Chief Executive Officer, commented:

"Frontera remains well positioned to continue to advance its focused investment programs amidst a strong commodity price environment. Our encouraging progress from operations throughout our primary business units within Block 12 continues to provide the basis for implementing aggressive work programs that are designed to continue to increase production and to realize the significant value that our historical investment has identified."

SUMMARY OF CONVERTIBLE NOTE FINANCING

   --  The Notes have been privately placed with a number of institutional
       and private investors. The Notes have been admitted to trading on
       the PORTAL system and may be traded on that market by qualified
       institutional buyers as defined under Rule 144A of the U.S.
       Securities Act of 1933. The Notes are not admitted to the AIM
       market of the London Stock Exchange ("AIM") or otherwise listed or
       dealt in on any stock exchange.

   --  The Notes have been issued at par by Frontera and will bear
       interest at 10%, payable quarterly in arrears either in cash or in
       kind at the sole discretion of the Company.

   --  The Notes are convertible into fully paid shares of common stock,
       par value $0.00004 cents per share, of Frontera ("Common Stock") at
       the option of the holder at a conversion price of U.S. $2.14 per
       share. However, if the Sale Price (as defined in the section headed
       "Further Information on the Notes" below) per share of Common Stock
       is at or below $1.71 for 10 out of any 20 consecutive Trading Days
       (as defined in the section headed "Further Information on the
       Notes" below) at any time in the 12 months following closing of the
       issuance of the Notes, the conversion price will be reset to $1.71
       per share.

   --  The Notes will be automatically converted into shares of Common
       Stock if the Sale Price of the Common Stock exceeds two times the
       conversion price for at least 20 consecutive Trading Days.

   --  Any investor who converts its notes into Common Stock before
       July 3, 2010 will receive an additional payment equal to one year
       of interest on the amount of Notes converted. At the Company's
       option, this payment can be made in cash or additional Notes.

   --  The Notes are unsecured and rank pari passu with the company's
       10% convertible notes due 2012.

   --  The Company solicited consents from holders of its 10% convertible
       notes due 2007 (the "Existing Notes") to amend the note purchase
       agreements governing such notes to permit the issuance of the Notes
       and to release remaining escrowed proceeds of $5 million from the
       May 2007 placement. In connection with the solicitation, each
       consenting holder will receive a warrant exercisable into shares of
       Common Stock of the Company in an aggregate amount equal to 7.5% of
       the number of shares of Common Stock into which such consenting
       holder's Existing Notes are convertible. The warrants will be
       exercisable for approximately 3,151,000 shares of Common Stock in
       the aggregate. Each warrant will entitle the holder to purchase one
       share of Common Stock at a price of $3.50 per share, and will
       include a cashless exercise provision. The warrants will have a
       five-year term and contain other customary terms and provisions.

RELATED PARTY TRANSACTIONS

Certain funds and accounts managed by DDJ Capital Management LLC (collectively, "DDJ") purchased an aggregate of $10 million principal amount of the Notes, convertible into 4,672,900 shares of Common Stock. These funds and accounts in aggregate own approximately 8,415,300 shares of Common Stock, representing approximately 11.6% of Frontera's issued shares, and Existing Notes convertible into 13,541,740 shares of Common Stock. In connection with the consent solicitation for the Notes, DDJ will also receive warrants exercisable for 990,850 shares of Common Stock. After this Placement, DDJ owns 19.95% of Frontera's fully-diluted share capital (assuming all outstanding vested options and warrants are exercised and all convertible securities are converted at the current conversion rates). An entity controlled by Spyros Karnessis, a director of Frontera, also purchased Notes. Stephen E. McGregor, a director of the Company, through SEM Consulting, LLC (SEM), will be paid a commission pursuant to SEM's 2001 consulting and advisory agreement with Frontera in an amount that will not exceed 2% of the face amount of the Notes. For these reasons, the transaction is classified as a related party transaction for the purposes of the AIM rules for companies.