Come and join us on 6 July and hear 4 AIM CEO’s speak. Brad George, Orosur CEO updates us on Colombia’s Tier-1 gold mine potential, Cliff Gross, CEO at Tekcapital explains how investors benefit from a special dividend. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East and have access to Premium Chat. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Thanks NJames. Very interesting and illuminating.
August 28, 2020
No. 12 Paliashvili str
The Board of Directors has convened to make changes in our company's direction,
governance and management.
Pursuant to the constitutional documents of Frontera Resources Corporation, we
hereby notify you that you have been removed from Frontera's Board of Directors
and from the position of President and CEO in a meeting duly convened and held by
Going forward, transition in our company's financial work will be affected by Price
Waterhouse. Legal matters will be handled by the firm Dentons. Operational
matters will be handled by Schlumberger. Representatives of these firms will be in
touch with you shortly.
We will also be in touch in the days ahead to speak with you.
Steve Nicandros Luis E. Giusti Tyler Nelson
I’ve forgotten that message Tenners. Do you have the link?
Well we know Zaza didn't get the message, but hopefully the support still is...
Well Mole, let's see how things develop and let's hope Zaza got the message August 2020 message:
'The Board of Directors has convened to make changes in our company's direction, governance and management... Going forward, transition in our company's financial work will be affected by Price Waterhouse. Legal matters will be handled by the firm Dentons. Operational matters will be handled by Schlumberger. Representatives of these firms will be in touch with you shortly'
Tenners as an investor with a large holding I'm very keen to find out what has happened. And I'm not unsupportive at the right time to take the right action against the right people. However, having been involved in litigation through my work and in civil society its something I've learnt to be extremely wary about. At the moment I'm not sure I even know who the good, the bad and the ugly are here. I'm tending towards the lot of them are culpable to greater and lesser degrees.
From a basic business standpoint it is never a good idea to run your company with no cash contingency and on a month to month basis. It is never a good idea to default. It can never be right to not hold an AGM, not issue any accounts and leave your shares delisted with no apparent registry and issue no official comment for over 2 years. When the chairman happens to be an influential member of the US Chamber of Commerce its even more baffling.
What Zaza may or may not have done to me simply does not yet add up or make any sense. But time may tell. Maybe there has been something uncovered in all the discovery. Maybe they have all had enough like all of us and want some sort of closure.
I personally think there is a viable field in Block 12 but my suspicion is that its the deep wells which FRR simply can't afford to drill that hold the key. I'd love to know whats down there but as of today we simply do not know. I had hoped that Schlumberger would find something next door in what is now BLOE license. Its possible they have been able to see something from their own deep well that reads across to block 12. Again we do not know. A cheapskate operator of block 12 can make $3 to $5m a year or more as oil price rise running off the existing wells and do nothing new. So the size of whats in the box is unknown but I'm 100% certain if there is any chance of getting it out someone has to show how to do it and have access to a large sum of money to invest and that will need security of tenure of the block and a longer PSA than is currently envisaged.
Phil - I fear they have probably sat on the field. With no staff and no money I think they must have effectively put it into close on a full shutdown. Any money they had likely went on the arbitration fees in early 2019 as the last comment I have seen on the accounts for Dec 2018 from court papers was they were down to $50k. There would have been some money from production pre the delist from the 2018 campaign wells but we really have no idea what happened after Dec 2018 at all. I suspect workers were still active till everyone seemed to leave post june 2019. After that it became debateable about who was employing and not paying the staff with the FRR US transfer blocked. Everything seemed to disintegrate from around july 2019.
So no I really don't think there has been a surprise drilling campaign at $3m a well under the nose of the staff and Uniserve our local contractor who also appear to be a creditor.
Pecten in terms of the GOGC and commerciality. The original CPR listed a number of criteria that would mark the ability to go from prospective reserves to bookable. The main one was really sustained flow. The two eldari wells from the higher zones in 2018 seem to have disappointed again. We were waiting on the last deeper well. The associated gas is an issue with that well in so much as FRR had no means to handle it at well head and could not produce and flare for too long. A main criticism of FRR by GOGC was the absence of reserves report. We were all hoping that the alleged long well test in Q4 2018 was "torturing the wells" and helping profile the deep zones for an updated report to be produced. Again we simply don't know what has happened. Did it continue to flow well or drop off? Again its critical information we do not have. This goes to the heart of the question of how you work the eldari - between the recent stack and frac attempt in a redrilled/recompleted vertical well vs the long horizontal frac ideas they have floated before.
On UD2 we know that a strong frac of the old bore didn't work (thought they had learnt that at taribani!) and gas wells need a redrill and recompletion at $5m+ a well.
Do I think GOGC would block commerciality? Well they have allowed the old ex soviet fields to continue in production. The commerciality should really have applied to new discoveries and again per the arbitration inspite of doing work in taribani on eldari a and b they were unable to convince the tribunal that merited 100% being retained as a discovery. So is there a hidden report waiting in the wings that could result in a revised CPR with reserves and GOGC changing its tune?
There could be - but it just doesn't feel to me that there is. As again logic suggests if there was even a bit of good news out there why has it not come out? In general I'm inclined to be cautious about anything the company says until I see evidence that supports it and Steve as recent as last year said more exploration was needed.
Tenners. I also support your view, but I would like to see the court cases played out if it bides us time, till a western orientated government in in charge.
Hopefully allowing us to get a deal, and our investment back, plus some interest for our pain.
I think we are looking at two sides of the same coin. My point is that shareholders here invested to support the exploration of block 12, and therefore if there is a proven resource in the 1% (made public or not), we do not deserve to have it taken from under our feet. That to me is the relevance as to why it is important to know if the box is empty or not.
In my view any yeilding commentary about 'mismanagement' does not cut the mustard if the asset has been stolen from the company through corruption.
I do think politics and security are cards being played by some sides of the Georgian Government, and this has likely caused difficulty in executing a plan to fully commercialise any opportunity. Is that not why we have US strategic support? We can speculate why these reasons might exist, but it is doing nothing to support the Georgian economy or energy independence.
Regardless, I still think the timing of action by the NOMAD is questionable, and the actions of ZAZA if they are as reported in the US Courts - Criminal.
Let's see what the week brings, but I would not be too soon to dissuade the efforts of fellow shareholders to act together. This far our voices have not been heard, and we certainly won't gain anything from acquiescing or walking away quietly.
Good luck to us all, it feels like we need it!
Mole - a suggestion re the booking of reserves (or not)
Under the exploration license, would FRR have been able to book reserves at all. My belief was that the declaration of commerciality would have resolved this - but as far as I'm aware that was never granted by GOGC??
I have gone through life hoping for the best and have
been lucky but Finance is not for me. AIM is a game.
Insiders gain and outsider go down the drain on dodgy
AIM. Take care. Life is not fair.
On the matter of how I would hope Frr move forward, is finally have an updated Jorc completed & get their % offloaded.
Obviously for above to be worthwhile would be that Frr really do have enough oil & gas that would get the interest of a SMajor of which I am still not even 50% sure they have.
I agree Mole, I'm rather hoping that the field has been developed at least somewhat. There obviously hasn't been the money input or agreement on some sort of a JV on a large scale. That to my mind just then comes down to the income FRR brought in from the few existing wells they drilled & pumped before delisting. The fact that they pretty much stopped paying everyone but assumingly still had the income from the wells coming in I would hope mean that they plowed the money back into the field to drill more wells. We know they were paying money in lobbying fees and representation for the arbitration, but that would unlikely come to the money they should have been coming in from the few wells that they had. We know that they were pumping most of the time because at one point a load of barrels of oil apparently went 'missing' under Zaza's watch. So if many barrels of oil were produced then they can be worth many millions over a two year period.
I just really hope that the money produced from the initial wells went back into drilling more wells and that we're not sat with the same number of wells we had two years ago with all that time wasted. Various reports have suggested that a fair bit of money is coming in from whatever wells they are but at the moment we just don't know.
If the company can now be truely sorted out and money brought in from a big development of the field then that would be the best place for everyone to be I would have thought. We can then all go away with something hopefully much more than we initially put in.
Tenners I think you misunderstand what I'm saying. The question of what is in block 12 is not relevant in pure financial terms. If you default on a secured loan it doesn't matter if its worth $1m or $1bn. You have defaulted. The point I make is that if you booked even a bit of reserves for a few wells, even a small % it gives you the ability to use it to borrow and the Outrider debt could have been serviced or paid off or attract a partner.
FRR have had two issues beyond not having any reserves booked - the first was the reserves are in a block with very limited life left in the license and have come into conflict with their 50% partner GOGC. They then had the issues caused by the 2016 loan note terms with Outrider being secured.
Faced with both the above issues FRR turned to litigation - be it the arbitration or Outrider.
Its encouraging that we have some signs of agreeing to a compromise with Outrider at last in Texas and Calif. 2 years too late in my opinion but its a start. I've been consistent with my view I believe that Zaza and FRR thought both the GOGC with the arbitration and Outrider with the loan notes would be sorted in 2019 with a compromise. The fact both were prosecuted and threaten the company is why we spend so much time on court cases.
If 2018 campaign showed the field was a goer ether for gas or oil and the Baker Hughes plan was feasible then I just don't understand why we have gone through the hell of the past two and half years. The idea that we are in the middle of some complex game of bluff with Russia about the resources while I would never rule anything out with FRR seem less likely to me than a miscalculation by FRR board of GOGC and Outrider intentions.
The proof of the pudding with be when GOGC invalidate the transfer to Green what happens next to Block 12. If FRR US get it back preferably with revised terms to attract a partner to develop it and keep GOGC onboard then finally settling with Outrider becomes a priority.
Nothing has changed since Oct 2018 - the way out has to be to refinance the company and in the process deal with Outrider and GOGC. As of today they need to get the asset back quickly. At that point we can again worry about what is in it and what the final cost of all this has been to shareholder financial let alone mental health.
If the box is full or empty is entirely the point, as that is why shareholders have invested.
Perhaps for reasons beyond just shareholder interest. It is entirely plausible that Frontera have found a giant gas fields but held off updating or releasing a CPR. It would not surprise me if Frontera have in fact confirmed the resource but the detail has not been made public.
Regardless, officers should not be acting against our interest in any discovery, and stealing the company assets.
Dulwichman - I agree with your post and I have stated many times that instead of lurching between the positive and negative that SH's need to look at the whole picture. IMHO the EU, NATO and USA are not just interested in Georgia because of it's strategic position, but because the control of the EU's energy is at stake. IMHO if Georgia's only assets were it's wine and tourism, then I don't think there would be so much interest.
Dulwichman: Your posting is the only one that makes any kind of sense to me.
With you on this dully.
It may be irrelevant whether Frr produce much. They just need to be present,and appear to be a viable choice.
Ukraine. Then Ukraine tender....at sea, FFS. Threats to take court action over result of tender.
And Georgia. Are we just in Georgia to have the presence. Find what's there, but not get to exploit it......just keep it tickles along......until it's decided Georgia's reserves can now come on stream.
When will that be....who knows.....but we,or someone new, will be required to keep the licences ticking over....keep out gazprom,or whoever ......until time is right to turn on taps.
Mad punter could be right about production....For all we know, we could have a few gushers. UD2.....could be fine....just shut in, until it's an acceptable time to turn on taps.
Frontera are in 3 countries where east,and west are jostling for position.
We've all picked the wrong share to pile into.....blinded by out greed, for what we were told block 12 could produce.
If our shares a worth anything.......maybe our children, or relatives can benefit one day. Who knows.
Hi Mr Mole. Hope you still get a chance to sample the water of life meetings which are perhaps a little more important and real than the musings on here as fear all is lost, however given your comment which in principle I agree with there is a very slim chance of a way out. It all depends on how high up the food chain the control of any hydro carbons in Georgia actually is from Uncle Sams point of view.
Firstly I am not suggesting that FRR is a CIA front which was suggested a couple of years ago by somebody
Nor am i suggesting that there is a particular reason that FRR is any special in Uncle Sams views other than it is the present tool in play- All that matters in my view from Uncle Sams point of view COULD be not who holds the rights to to what ever is or is not there but make sure that rights are not held by unhelpful powers ie Russia or China. This is very much big picture stuff. This may sound like a cold war novel but it does still happen if it is deemed important enough. Sadly I would think that all Uncle Sam needs is denying the asset from others - nothing to do with production If ther was any desire for production then it would have happened by now and add in that the EU seems not to be taking any notice over Nordstrean 2 only adds in that production is not important to Uncle Sam.
In an absolute long shot that this is anywhere near a part of the story all these court cases unspeakable Directors actions just add in to denying the asset. In this scenario any delays are the equivalent to any denying and anything involving a court is as Shakespeare said "The wheels of the law turn very slowly" that may be helpful to Uncle Sams policy.
Some very well meaning posters may well think this is very far fetched indeed I am doubtful my self but the history of oil in the Middle east may shine a light a brief known history follws. The UK was very concerned over the actions of people like Rockerfeller and his like were gaining great sway in the middle east and were able to act like Imperialists and it was thought Uncle Sam wanted an Empire and the UK would miss out . Oil was key future commodity and we had none yet the Royal Navy had begun to move away from coal and onto Oil. The RN would loose the technological position of Ruling the Waves Rule Britannia and all that. Churchill realised this and created the UKs first wholly owned Commercial Company to in effect take on Uncle Sam but simply did not have the dosh so they had to revert to game playing and dirty tricks by the standards of the day. The result is what we now call BP. All I would say is that substitute gas for oil.
A very long shot
Just a thought , if asset has been trans to Greens in settlement of their debt re corporate law , and assuming GG say no to them , is it still then theirs to move on / partner with someone else as opposed to going back to liquidated Co .
Ziggy: agreed, but the GG have to approve the transfer....
Yes agree as money talks .....but if its goes back to liquidated Co / control of liquidator ,presumably anyone who has the funds and meets licence requirements would be able to pick up the asset from FTI , no need for us as a partner.
Thank you both.
If we did by some miracle come out of this ridiculous catastrophe, of a self inflicted situation, with the asset intact then imo an potential investor wouldn't give a toss about the past if they think they could make a decent buck.
But the tragedy is that that situation seems extremely remote.
Yes, I'd agree with that ZZ
Frontera have managed to get a temporary restraining order with regard to the transfer to GC, which will be heard on 14th May