The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
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If Hope was going to get his 35million why would he be bleating on at the GG about getting the block or having their debt shifted onto the next license holder. I think the current 'plan' is he is getting less and he has to suck it up. I think these public statements are aimed at pressuring Frontera to give them 'more' of however they have deemed to pay them off.
What was that 5% profit share/royalty thing many moons back at the start of this, could that be related?
I make the calculation 3.5p/share rather than 4.5p. If we're going to get anything out of this I'm also hoping for something at least in that same $750m ballpark, as it would exceed our sunk costs (or perhaps equal them with a bit thrown in for inflation over the years) As for us being a private company (assuming that we survive this with some worthwhile assets) there will be private share matching companies around able to link up sales and purchases to provide some liquidity. It may not be as fast and spontaneous as an ordinary share market and the price may not be quite as much, but it would enable you to recoup something.
"Well Oakey, its all guess work at the moment in terms of the 5% because if that valuation is in the ballpark range then the ‘new’ FRR could be worth US$750M, which translates in to an s/p of 4.5p against current outstanding 16.6bn shares. Pie in the sky numbers? Yeah, sure, why not. But let us also not forget the Moldovan, gas producing fields which were secured on a 50-yr PSA from 2016 and I personally think there is abundant value there. However FRI was the name of the PSA, which I believe is one of the entities also going to be struck off. What is the status with Moldova PSA??
The bigger picture could be that with Georgia, Moldova and Ukraine, the plan is to cut off Russian gas to Europe, hence Ivanishvili et al have been fighting FRR since they came to power from 2013.
Two other observations as far as Hope is concerned:
1) Hope has already got a whiff that an agreement has been reached with the Georgian Govt and the PSA has been transferred to another FRR entity, most likely FRUS and we can cross-validate this assumption by the knowledge that many of the important FRR-Cayman entities will be automatically struck off by 30/10/20. Plus Zaza made direct reference about ‘reorganisation’ in FRR’s last public release.
2) Given the high political connections to FRR, SN will try to avoid ‘screwing’ one of its largest creditor by [compulsorily?] exchanging debt to equity - common practice for junior O&G listed companies, particularly the loss making ones. Again, the question is who and how the valuation will be arrived at.
So, if number 2 holds true, I believe shareholders should come out of this ok, for the same reasons.
As usual, just offering thoughts to discuss, to at least keep this BB alive."