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I am glad I sent out the T.o.T s.o.s and even more happy the old man and the sea answered it.
Many thanks for finds and inputs to both yourself and Monti, more positives than negs in these for me personally.
With luck Looed or Jim will be sending updates soon.
GLA real holders
Hi ToT - thanks for the research on Exxon. I agree with you that it seems Exxon walked away from Georgia and the Chinese stepped in. However the question is why is Exxon continuing to be linked with Georgia and as recently as the November 2023, business meeting held at the Embassy, co-arranged (and with special thanks) by SN.
Then the other major question is why B12 has not been tendered out by now? Sure, you could argue Georgia is still a difficult place to do business for foreign companies (recall Schulumbeger leaving and handing over its acreage to Block Energy) and perhaps there is still a question mark over the geology. Therefore, in my opinion, there is something to read ‘between the lines’ with Exxon, SN and Georgia. Also worth mentioning that the Ukraine war has probably shifted the political landscape in the country and are now more genuinely EU facing.
I have dug up the below article from Oct 2018, when Exxon was going to undertake hydrocarbons field study in Georgia. It seems focus was on gas even then but probably more urgent now for Europe following the destruction of Nord Stream pipeline. While we don’t know the conclusion of their findings, perhaps worth reaching out to them to get a copy if available; I always find Investor Relations more than helpful when you start off by saying that ‘I am a Shareholder and I need …….’.
Hence I find it hugely intriguing the continuing ‘triune link’ (SN-Exxon-Georgia).
Here is the article: https://agenda.ge/en/news/2018/2204
Agenda.ge, 24 Oct 2018 - 13:04, Tbilisi,Georgia
American multinational oil and gas corporation ExxonMobil has shown an interest in Georgia’s potential in terms of oil and gas, is going to evaluate the potential of hydrocarbons in the country’s west.
ExxonMobil signed an agreement on conducting fieldwork on hydrocarbon resources in Georgia with the State Agency for Oil and Gas of Georgia’s Ministry of Economy.
After completing the examination of the geological and geophysical data transmitted by the agency to the company, ExxonMobil will prepare a report.
The fact that such a large company is showing an interest in Georgia’s potential in terms of oil and gas is a promising fact of outstanding significance”, Economy Minister of Georgia Giorgi Kobulia stated.
Representative of ExxonMobil Jonathan Wilson said that they are happy with cooperation with Georgia and will be able to use the experience to study Georgian hydrocarbon potential.
We have worked for a decade in the Black Sea and the surrounding areas. And it is a pleasure to extend our knowledge and experience to evaluate the potential of Georgia. We look forward to working closely with the state agency involved in the gas sector”, Wilson commented.
ExxonMobil will provide trainings for the employers of the State Agency for Oil and Gas to perfect their skills in using the database and stratigraphic analysis.
Sorry auto check
Piscator
Picador, Monti & Got
Thanks for excellent info on SN & Exxon
Gotreal - thanks for providing the reference: “It requires a majority (>50%) of the creditors who represent more than 75% of the debt”.
So applying my simple theoretical example yesterday, let’s say there is a total of $30m owed to creditors, $20m provided by SN and $10m relating to YA, GG, Mourant and YJ. Technically any settlement would require at least 51% approval from creditors representing 75% of total amount owed which equates to the following imho: $22.5m (75% of $30m) and 51% of this amount equates to c$12m, meaning SN would pass his own proposal through if he is owed $20m for funding the legal cases. The point here is to demonstrate the principal and not the financial numbers, which nobody knows except Deloitte. So, imho SN has probably got this squared off (in terms of destiny in his own hands) and hence we see comments from the company that there is a desire to return FRC back to pre-wind up status, which took many of us by surprise (admittedly).
Yesterday I suggested that perhaps SN would offer 20c to the Dollar but now I think about it, it could be even lower as A#s221 alluded to. When OMF bought the CLNs, it was at 20c to the $ but at that time, FRR still had a valid PSA and was a publically listed company. Now we have an expired PSA , no share listing and a statement from Deloitte saying the company is insolvent. You can make your own guess as to what SN could offer in this scenario.
The only issue I see here is relating to GG. They will never morally accept this amount regardless of the creditor vote meaning a permanent sour relationship with FRR and therefore kissing goodbye to the renewal of the PSA forever.
So my conclusion is that Exxon were right to walk away from this block with all its problems, but the recent diplomatic activity referred to in one of my earlier posts suggests that they might well be interested in partnering the development of block XII, which is very rural by comparison. Their presence at the recent meeting with the Georgian Ambassador in Houston suggests to me that they could well be involved in acquiring the vacated parts of Block XII in partnership with FRR Mk 2 aka FRR US. I’m with Monti on how things might pan out with the liquidators of FRC, that 1% of the original PSC being critical to any arrangement with Exxon imo.
OK here’s the translation:
Signing a 100-million-yuan engineering service contract to open a new market for Western Drilling in Georgia
China Petroleum News Center
Publication date: 2023-04-25 10:47
News from China Petroleum Network (Special Correspondent Niu Yun, Correspondent Wu Rongrong) On April 17, after more than a year of follow-up research and promotion, Western Drilling officially signed a RMB 100 million contract for drilling, logging, and cementing engineering services in Georgia. This is the first time that Western Drilling has entered the Georgian market in West Asia.
Georgia has a stable social environment, broad prospects for the oil and gas market, and promising economic benefits from the project. This project is located in Block V in the Kutaisi area. Western Drilling is responsible for drilling, logging, directional, cementing, coring, simple pressure control, mid-course testing and other services. The first well E-CH-FN1 is designed as a three-split directional well. , the design well depth is 4580 meters.
In April 2022, Western Drilling received a bidding invitation letter from Georgia's Western Gulf Petroleum Engineering Co., Ltd. and was invited to participate in the bidding for engineering and technical services in Block V in the Kutaisi region. Western Drilling attaches great importance to this, and has traveled to and from Beijing many times, organized specialists to conduct on-site inspections of oil fields in Georgia, and repeatedly communicated and negotiated with the senior management of Western Gulf Company to promote business progress and cooperation at multiple levels. For more than a year, multiple parties have repeatedly discussed and communicated, and finally achieved the expected goals and successfully signed the contract, creating new profit growth points for the high-quality development of PetroChina's overseas business.
There is little well geology and actual drilling data in Block V in the Kutaisi area, and the project is adjacent to a nature reserve. There are residential areas, high-voltage lines, railways, etc. around the well site, making it an environmentally sensitive area. The designed trajectory of the first well is a bypass well. The upper strata are loose and trajectory control is difficult. In view of the construction difficulties, the specialized units of Western Drilling cooperated efficiently, participated in technical management with a highly responsible attitude, implemented the concept of green and environmentally friendly drilling, and studied countermeasures for various difficulties and risks in advance. On the premise of ensuring safety, we continued to provide high-quality services. Shape the brand image of Western Drilling.
On April 19, Western Drilling held a kick-off meeting for the Georgia project. With drilling as the leader, it linked integrated technical service units such as logging, orientation, cementing, and oil testing, and mobil
It seems that Exxon were offered Block V in western Georgia but presumably walked away because of the environmental issues now being faced by the Chinese company that has taken it on. These issues would seem to prevent any large scale Texas style field development with nodding donkeys at 100m intervals: http://news.cnpc.com.cn/system/2023/04/25/030099945.shtml
Translation will be provided in my next post.
Avi8or, thanks for the tip but this iPad is practically up to its storage limit so I’m not downloading any more apps or programmes to it. When I’ve thrown of this lurgy I’ll get back on my pc and post from there but in the meantime here’s a link to Exxon’s visit to Georgia in 2018: https://www.facebook.com/1416847798539016/posts/pfbid0QKskJSKcbeQKA56nkSt3LdTQhfcStUNbLTPoXqgh1xncUFUcTTyBUpdvWmg2Baogl/? In order to avoid the timing out issue I’ll say more about this in my next post.
"But going by my numbers, SN’s debt would represent more than 50% of total creditors dues, meaning that any proposal made by SN (probably via new financing), he could vote it through as his debt represents more than 50%. And I believe for a settlement proposal to be accepted, perhaps it requires a simple 51% acceptance from the creditors by amounts owed and not by number of creditors. " It requires a majority (>50%) of the creditors who represent more than 75% of the debt: https://legislation.gov.ky/cms/images/LEGISLATION/SUBORDINATE/2017/2017-0091/CompaniesWindingUpRules_2023%20Consolidation.pdf
Piscator1, if you have a technical problem you have to avoid HL.
I had and could not get into my account. A Help Desk Agents asked where
I was born. My account was set up by whoever and only knew where I used to live
as a child. 4X I was asked the same question and each time I was right and the computer
was wrong. Hackers were after me at the time. My computer problem was not addressed
with concern and I have been treated like an idiot since. I kept the old computer and
bought a new one but only use my computer for research. Why invest on-line while there is
too much crime? The most cautious are caught for there is too much fraud. I missed
RR, ARM , etc. Was left in shock since my account was blocked. No reason was given why.
Deloitte may find out the truth and does not accept a lie.
Monti
Thanks for detailed reply & along lines of what I was thinking.
Will say that I would think on SN being the main creditor then he would have the power on making payments to other creditors. Cents in the $.
Hi A-221 - The obvious question is how has FRC been able to finance all its legal battles over the years when the company has not produced much cash flow from its oil sales? So, if you recall back in the day, both SN and ZM personally extended RPNs (Related Party Loan Notes) which were charged at 10% annually and rolled over on an annual basis for many, many years. In 2017, these RPNs were converted in to equity at 1p a share, when the prevailing open market price was around 0.4p, thereby lifting SN’s stake from 6% to 13% and ZM from round 3% to 7%. I also recall SN’s original shareholding in FRR was c.18% at IPO stage but after the big $92m bond debt conversion in 2015, he was significantly diluted. It is also worth remembering that FRR Directors were never paid salaries as verified by the Audited Account, which were also converted in to shares at the same time of RPNs.
So, what’s my point? One way or another, SN has always had a strong hold over FRR and I believe by him financing the legal bills, he will sit high at the creditors discussion table. And if I had to guess how much accumulated legal costs could be when taking in to account (in no particular order) the Cayman’s fiduciary case, followed by California case, followed by YA cases in the UK and US, followed by the cases against ZM and Green Capital in Georgia, followed by the costs incurred from the Arbitration Tribunal, then i would say $20m plus. But how much money is owed to other Creditors from what we know? I don’t know as we have not seen audited accounts for many years, but let’s compare SN’s debt size to YA’s at $4m, Mourants at $1.3m, and Arbitration at $5-6m. Who else could there be? I think all the vendor finance was extinguished by issuing new equity back in 2017, so I don’t know. But going by my numbers, SN’s debt would represent more than 50% of total creditors dues, meaning that any proposal made by SN (probably via new financing), he could vote it through as his debt represents more than 50%. And I believe for a settlement proposal to be accepted, perhaps it requires a simple 51% acceptance from the creditors by amounts owed and not by number of creditors.
So how much will SN offer to the creditors on the $? I would say 20cents as this is the level OMF acquired the CLNS at but it could be much lower as you suggested.
Finally, worth remembering here that the money owed to OMF, was issued by Frontera International Corporation (FIC) which is subject to its own separate liquidation process and therefore will not be included in the Deloitte proceedings.
Piscator1 - Save all the pages into a word document and then paste those links here.
As SN as a creditor then would that give him a reasonable chance in agreeing to pay say 5 cents in a $ & buy back the part of Frr that just been put into liquidation?
Lifeishard, the book was my inspiration for a lifetime love of angling and hence my two fishy avatars, but it’s been about 40 years since I last saw the film so I must revisit it on Netflix when time allows.
Monti makes a very good point about SN’s likely place in the hierarchy of creditors and I have some more to contribute re Exxon, but I have a technical problem posting here at the moment as the page keeps refreshing on my iPad and everything I have typed disappears. So if anyone can offer any advice on that I’m all eyes and ears, but it might be down to the fact that for research purposes I currently have about 40 web pages open using two different browsers.
Good to find out that I am in good company with well informed, intelligent investors.
Many companies with potential are held back by determined short sellers working in teams.
Those thugs encourage to buy while they sell. If there are more traders who are sellers, then
investors are left with nothing and the London Stock Exchange has a credibility problem.
Tot & Monti
Thanks for interesting posts.
On what you mentioned Monti on SN being one of the main creditors to Frr that would make much sense, as they have stated SN (Frr) are in talks with Deloitte & this would give SN a front seat.
Hi ToT - thanks for posting the Facebook article, and I note the date is 16th November 2023. Also noted that there were some heavyweight US companies attending this event. I assume around that time, FRC team would have been aware (or anticipating) that the winding up petition was on it way from Mourant to the Grand Court of Cayman, yet our man (SN) is at the forefront of arranging this high profile meeting. It specifically says in the Facebook article ‘……….Among the distinguished guests were representatives from America Georgia Business Council , ExxonMobil, Freeport Energy, B1 Bank, Frontera Resources, and Pappas Bros. Restaurants. Special thanks to Honorary Consul of Georgia Janet Moore and President of Frontera Resources Steve Nicandros for organizing this great meeting.’
If SN was personally involved in setting this meeting up, how do you think Exxon got invited (or pushed them to attend as Exxon is a very busy company for this small meeting and a small…….country)?
Nevertheless, SN was being presented as the President of Frontera Resources, but following the granting of the winding up order, I wonder if he is still the President but may be of another FR entity registered outside of Cayman? My own understanding of insolvency law is that any entity (regardless of foreign registration) is if it is majority owned by the Parent company (FRC in liquidation), then it should fall under Deloitte’s purview.
Anyway, what are your thoughts as to why SN+team decided to let the winding up order go through uncontested but is now working closely with Deloitte to return the company to the pre-wind up status? Having thought about it, I now have no doubt that SN has been personally lending the company money to fight all the legal cases and therefore racked up significant debt, becoming the largest creditor in FRC.
If this scenario is true, it will entitle him to be in the middle of all creditor discussions/negotiations as well as vote through any proposal agreed with Deloitte. That is indeed deep and advance thinking by SN and team. May be the jigsaw pieces are starting to come together but we will have to wait to see the full picture and where the loyal army of retail investors stand in terms of ownership/dilution.
Disclaimer: Monti is an ‘out of the box’ thinker and the above is my assessment only.
P.s. great to have the legend back with important research contributions, and may be also a good omen for us imho (@tot). Also the resurfacing of the ill-type on this BB may be another good sign.
PS , T.o.T, get well very soon, great to have you back, feet up and super sleuth the movie “ The old man and the sea “ if you haven’t seen it, your in for a treat, Spencer Tracey one not the others.
Many thanks T.o.T, super sleuthing at it’s finest.
GLA real holders
Piscator1, I am the most ignorant Mug but at last have
the time to study and learn, 60 years too late .
You invested for good reasons and your comments make sense.
Deloitte has an excellent reputation . I sent a short comment
for my interest is the reputation of UK Finance which is in need of
common sense regulation and less Woke. On-line invites crime.
Talking of 'divs', 1 sausage... 🌭. A real div or is it just a d!ck?
Yup and real although do like one day rodneys point of view
Yes, so have I. He told me ‘whatever you do, don’t sell your shares’. LOL!