The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Bigun2, from my search into Frontera’s company structure, the only active entity is Frontera Resources Holdings LLC which was incorporated in Delaware on 25/07/2011 and registered in Texas a week later on 01/08/2011. The original Frontera Resources Corporation (2714496) was also incorporated in Delaware on 04/02/1997. It is still listed, see https://icis.corp.delaware.gov/Ecorp/EntitySearch/NameSearch.aspx but I can’t find out if it is still active. I consider it is significant that FRC was originally incorporated in Delaware and FRH in 2011 because of Delaware’s favourable tax laws that favour companies not doing business in the state. Also, there are tax Savings from using a Delaware corporation or Delaware LLC:
No state income tax for Delaware corporations that operate out of state
No business license required for Delaware corporations not operating in Delaware
No inheritance tax on stock held by non-residents of Delaware
No state sales tax on intangible personal property
Shares of stock owned by non-resident aliens are not subject to Delaware taxes
The licence was transferred under the Farmout Agreement of 13/04/2019 to FRUS Texas but it was not ratified by GG and GOGC. But the Right to Transact Business in Texas has been forfeited by FRUS and suggests FRUS is no longer active. In addition, the Farmout would appear to be invalid because clause 1.9 states the Farmout Area “shall mean the geographical area known as Block 12 as delineated in Exhibit 1 hereto and covered by the PSA”. Frontera has relinquished 99% of B12 so I assume that the original licence will need to be changed to accurately define the areas in B12 that Frontera can produce oil and gas. It is also reasonable to assume that Zaza has been in negotiations with GG regarding this and may well be trying to extend the licence beyond 2027. If so, as part of the restructuring, the BoD may take this opportunity to assign the new licence to FRH which would need to demonstrate it had the finances to carry restart and continue operations. Also, the PSA stated that FRUS shall pay to FRGC 5% royalty on all production from Block 12 for so long as FRUS is entitled to its sharing allocations provided in Article 7. As FRGC is to be liquidated, then it makes sense that another arrangement has to be put in place to deal with the Outrider debt. Zaza has indicated that the changes would increase the share of Outrider Management so instead of a 5% royalty maybe swapped for shares in the restructured company.
tabs - not slating, just an observation. I really enjoy most of your tongue-in-cheek posts. Keep it up
Perhaps they have offered him shares in the new entity. Wonder if he would be prepared to risk a partnership with them again!
blimey slated when im pessimistic slated when im optimistic cant win :-))
im hoping for the best particularly for others like ODR as i know they have larger holdings than mine but im not worrying because whats the point. nothing we can do but wait for our sleuths to let us no our fate
Does anyone else think it rather suspicious, Zaza went even quieter (not bashing the GG anymore)? I think he has done a deal which covers his share holding losses at least, guaranteed he will be ok through all of this, just my thoughts, hope I am wrong, would dearly love this to come good for all lth, gla
Presume their personal guarantees to Hope of shares or $2mil cash is now a cash only transaction.
Why would they bring that upon themselves ?
tsbs - you are obviously in your most optimistic mood today. Cannot, for the life of me, see why! (I am, clearly, not at the same level of optimism - more like ODR)
I agree tsb, we either all gain or all lose
there is practically zero chance that the chuckle brothers have struck off their own investment and transferred the asset into another entity that only they are part of
Bigun: our shares are in Frontera Resources Corporation. That is one of the four being struck off.
Also, Zaza confirmed as much.
Is the entity we are invested definitely in the ones struck off. Is it not possible that these are subsidiaries? I believe WellOiled did some research on the current company structure and there maybe a higher entity. FRH?
...heard from their broker yet?