The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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And finally before I get back to work. This has Malcy bucket list addition written all over it. Should get some more commentary from WHI as well.
Kempey agree its a little vague - but logically it can only be out of our share as the other 50% belongs to GOGC. But as I posted earlier that will be somewhat academic as we will be recovering the costs for a while and you can add the $3m to that pot as well so I think its safe to assume through 2018 and 2019 and probably 2020 (the most productive years of the curve its 100% into the company coffers and we pay out of our share to the investor. Depending on how the cost recovery pool is accounted for the investor may also benefit a bit from that. On the approval that's what I posted earlier I think its finance from an investor and not a farm in hence no approval how we fund the wells is up to us and why I think another reason it may have been constructed as such.
Kempey, as others have suggested, the oil revenue split between FRR and the Georgian govt only becomes reality when the cost recovery pool is exhausted, so will be a while off yet. It would become more relevant if a lot of future wells were financed in exactly the same way, but if that happens well already be looking at a totally different company. Love the analogy Mole, picturing Zaza as ringmaster and we can all think of a few clowns who are overdue some pratfalls
kempey - until cost recovery is complete the GG get FA.
Excellent analogy Mole. My only concern on what i believe looks a great deal in financing the Niko-1 well drill is whether the 70/30 split is before the government get their 51% share or after. This is key as the reality is the take for both partners will be a lot less either way but a lot less for FRR if the split is before the 51% is taken and FRR have to stump up 51% of the total revenue gained. Its such an obvious question I am sure it is after the 51% is taken but it is not obvious from the RNS. Would this investment and agreement need oil and gas ministry approval?
A nice read, with a great analogy. Thanks Mike.
Contra what today shows above anything else is that Frontera have moved forward. We have moved forward in our ability to drill and complete wells on time and on budget and hit the target zones. In the process they continue to obtain valuable logging information which they are now also reprocessing on wells like Niko against previous logging to develop zone 13 as a prospect across the block. We have moved forward in confirming that going to what the prophets of gloom call death spiral finance is no longer the preferred way of funding the business. Where possible shareholder value can now be protected by avoiding them as we get stronger better deals can follow. The two are not unrelated. Success in the geology and execution enables access to finance. Once the death spiral finance fox has been shot the prophets of gloom will need to go and find another company to plague. Its been a bit like watching a high wire act over the last 2 years. A few times we have wobbled and looked like we could fall off. But no we are still on the wire and hopefully we might see a few tricks now we are in the middle of the ring. We have even had the clowns and fire breathers coming on to do a turn while we wait. They have known for a while how this should work out and to their credit the company have opened up the communications during this period to enable the audience to watch and participate in the show. We are not there yet (as the share price shows) but we are still on the wire and looking more stable as a business than we have for a long time which makes the bank holiday a bit more tolerable than if we had no news.
There is much speculation on what might happen over the oil, gas, jv's, YA, etc. Try this one - Zaza's recent unexpected purchase of shares could be a prelude to a significant announcement on gas where the share price will increase by multiples - then Zaza sells the recent share purchase and then pays off YA - job done! Well, stranger things have happened to FRR before, and many a true word spoken in jest!
Johnny - consider whether FRR are starting to access funding streams from US "friends". When you combine this with the Georgian delegation trip to US this week the context can broaden quickly. The more friends we have with a financial interest the less likely we are to get interference.
Hmm a tad disappointing after early rise