Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
TGL, brilliant! Thanks for joining the board. Your point re damaging existing client relationships by becoming a producer is very significant.
CF, Me and you are in the same place. Zaza didn’t say it was an either / or with the commercial discussions with the two super majors! It’s an AND. Mole and you have just articulated the best and most likely model to be unveiled. BHGE move into JV with FRR in Taribani, focused on oil - Zaza’s deal most advanced scenario. AND ExxonMobil farm-in for MK gas, with BHGE already present to provide services in the field for ExxonMobil. Latter requires GG approval to reassign part of the PSA, hence Exxon signing a sweetener high value GG deal to help out in Western Georgia in return for supporting the farm-in in Eastern Georgia B12. That’s Zaza’s Plan A in my opinion, and it’s looking highly likely given the ducks lining up
KTB - there now that ya better header to propagate isn’t it... nerd that you are. What a miserable life it must be try to steal from others by spreading lies and fear. Utter thick trash you are mate.
Agree, I just tried a dummy sell of 12m shares and got a live quote immediately (of .403). So either there is a big demand or MMs happy to load up at this level pending next leg up.
I am of a personal opinion that BHGE are still PART of the equation featuring Exxon as I said on II this morning: I whole heartedly agree that the BH MOU is a launch pad for FRR field development plans. I am leaning more to this arrangement becoming an enabling platform for a Super Major to farm-in to parts or all of B12. While this is very much shaping up to be a joint operations approach that Zaza talked about as one of the options, it also serves to strengthen credibility of FRR with the GG as well as providing a helpful foil to assess political reaction in the country. I’m not sure this MOU would have warranted a John Bolton visit, but given sensitivities about GG corruption, an Exxon farm-in absolutely would. Three US businesses investing in B12 is massive should it come off and this MOU is a fall back launch pad for FRR, crucially not requiring GG approval, while also acting as a steppingstone for an Exxon entry/farm-in. I’m sticking with Zaza’s 3 month timescale (so end calendar 2018) for us to be in a “different place “ with farm-in and BH/FRR the ‘outriders’ (sorry about that ref but couldn’t resist)! All this hatched over a private dining table in Houston, home of FRR, BH and ExxonMobil. But either way, the “Golden Age is before us, not behind us”
Great post by TOT on II detailing aspects of BHGE 3Q18 results statement today: Some key extracts show the direction in which the company is going: “We are now in the second year of our journey as BHGE. The Company’s operations are improving, and we are driving change in the industry with our differentiated portfolio. We are focused on commercial innovation, outcome-based models and leveraging our leading technology offerings to drive significant efficiency and productivity enhancements for BHGE and our customers." ““In Oilfield Services (OFS), the market environment continues to improve, and our well construction product lines are seeing robust activity increases”. “BHGE’s advanced drilling portfolio continues to deliver superior performance for customers. In the third quarter, BHGE set a drilling world record, delivering over nine thousand feet in a 24-hour period for a customer in the Marcellus. The team used its remote monitoring capabilities to ensure the well path stayed in the target zone 100% of the time, resulting in 35% lower drilling costs. Over the last three years, BHGE has drilled over a mile a day in more than 200 wells in the Marcellus and Utica basins, demonstrating its ability to deliver world-class results on a consistent and sustainable basis.” Their role to date with FRR has been largely limited to cementing operations, but the new approach suggests that they might now have a much wider involvement as a partner with rewards dependent on well performance, and with the drilling performance outlined above one might well ask “Who needs Exxon”. Those who sold on the news yesterday or capitulated today need to wake up and appreciate the significance of this deal. If Baker Hughes are going to be picking up the majority of well costs for an extension to the Taribani campaign FRR will have absolutely no problem meeting the payments to YA. Ergo the threat of continued dilution has gone and the opportunity then arises to carry out further work at the MK and Mirzani fields…if another major doesn’t get in there first.
Despite the gutter smells reappearing, and the ****malignant and otherwise unemployable tag team infesting this board to distract, misinform and scaremonger weak shareholders into selling ... (is that not a definition of theft?) ... I’m delighted with today’s news, and agree with many well informed posters (when I got to them). Anyway, this one from Regdik made a lot of sense and I thought worthy of reposting: regdik1,181 posts RNS A bit more time now to put down my reasons to why this is a good RNS for FRR. One BH is one of the best in the business and do thing the right way to ensure HSE and well long life. Hence they are not cheap but when they do something it stays done. I don’t think that most SH understand how much this will cost BH’s to do this work and the logistics of setting up this project (+ onset of winter). So we have a major committed to spend millions on an MOU with a walk away clause and no commercial claw back. Just not done would never get through the commercial guys at HO. Therefore, I think this can only be significant prep work for another. Why an MOU – easy to set up and not legally binding and can be terminated quickly (hence 30day notice). But one was needed if the work was at the request of another organisation as only FRR can authorise this to be carried out on their field. An MOU with BH therefore has no need to mention others. A very big indicator that a bigger deal is being worked and is in the final stages so confidence is high to allow the service people start planning their projects and work. It will take several months (hence Sept date) but we will see the other deal well before then. The fuse has been lit.
Kempey has it spot on... agree 100%. Repeating his post here: ExxonMobil uses Baker Hughes Services and their Investment arm bought into Baker Hughes last year. Baker Hughes are there to support the super majors as yet to be announced imo. As Zaza says it is the result of discussions with industry majors. They would have to agree who would be supplying the services. Baker Hughes are massive.
Madpunter, love that logic and nothing mad about that!
Exxon ducks:
1. Withdraws from major JV with Rosneft (March 18) citing Western sanctions against Russia. Exxon and Rosneft had expected to invest upwards of $500 billion. Where do they close that gap? Duck 13
2. Then in March 2018, Exxon made its most extensive multiyear forecast yet at its annual investor day in New York. The company aims to boost daily production by a million barrels a day, to five million barrels (with natural gas converted to an equivalent amount of oil) and increase profit by 135% by 2025. Duck 14
3. Exxon acquires 2.5 percent stake in the Azeri Baku-Tbilisi-Ceyhan (BTC) pipeline in March 18. They have a seat at the table on the transportation side, route to market tick. Duck 15
4. ExxonMobil to study hydrocarbon resources in Western Georgia, and train up GOGC staff in analysis techniques. Low value investment by Exxon, high value service to GOGC/GG (repeating above, but they're officially in Georgia in in bed with GG). Duck 16
I think this is coming together nicely.
I see the sewer smells have returned. I thought they'd given up. Ah well, I do hope they extend their shorts!
So I think we should have a look at the ducks lining up. Note I've not had time to put this into a chronological order nor is it exhaustive - so please feel free to add.
Georgian ducks:
1. Mole reminded us that the Georgian Presidential election is this weekend. Likely candidate to win being supported by the incumbent Georgian Dream party. Key issue being economy and jobs. Any major deal would be unlikely to be announced before there is political stability, given the proximity of this election. Election this weekend, and the Georgian Dream preferred candidate winning is Duck number 1.
2. GG announced the Exxon visit earlier this year, socialising the fact that Super Major O&G business are showing interest in Georgia. Duck 2.
3. GG dismantled and integrated the old Energy Ministry, which had an antagonistic relationship with FRR, into the Ministry for the Economy and Sustainable Development. Duck 3.
4. Georgian PM appoints Giorgi Kobulia as Economy Minister. Kobulia was a former senior partner at McKinsey consulting business, where he led the Moscow based consulting practice for Oil and Gas strategy, amongst other things. He knows what he's doing, in relation to hydrocarbon strategy and will have relationships already with major global players. Duck 4.
5. GG announced signing agreement with ExxonMobil to study hydrocarbon resources in Western Georgia, and train up GOGC staff in analysis techniques. Low value investment by Exxon, high value service to GOGC/GG. Duck 5.
Frontera ducks:
Too many to mention but key to me are:
1. SN and Zaza convert debt to shares at conversion price of 1 p per share, fully aligning themselves with retail shareholders. Clean up balance sheet. Duck 6
2. Launch 3 well campaign plus UD2 drilling on an apparent 'go it alone' strategy. Successfully concludes all drilling and completions in Taribani. Asset proven. Duck 7
3. Potential partners influence drilling of T39 to Z19… massive conventional O&G play confirmed. Duck 8
4. FRR swamped by tech and commercial teams from two Super Majors and responds by re-engaging qualified staff. Duck 9
5. Super Majors super computer tells majors 'we got it wrong' - resource estimates are in fact greater than FRR had estimated and greater than NSA CPR… oh, and they can improve extraction cost assumptions too. Duck 10
6. Super Majors signs NDA x2 including EWT due diligence and stress testing the wells, and engages in commercial discussions. Duck 11
7. I could go on but you get the point…. But its enough for Zaza to say we have a 'brilliant future'. Duck 12
Cont.
CF73 Yes I suggested that theory, as corporate ‘deal makers’ often build a strategy that leveraged a fuller portfolio of IP and capabilities than the major or substantive part of the deal per se requires. Just to ensure our facts are straight, according to my notes from Zaza’s last shareholder meeting, a farm-in/out that by definition requires an assignment of part of the PSA between GG and FRR to another party, requires GG approval. This is not the case with an agreement to joint operations or JV. I’m getting the impression from the videos today that we are heading for a farm-in in Taribani, which would make sense given the scale of research and the fact that the super major interested here has done the equivalent of their own CPR and confirmed assets and recoverability are greater than FRR’s CPR, AND investment costs are less than in FRR models! I suspect MK gas is heading towards a JV of some sort, in order to further evaluate before a full scale farm-in. Assuming we’re not bought out in full in the meantime!! ;-) Let’s put it this way, while I haven’t gone as far as Zyder, I have written my notice letter! Feeling very good to be an investor... and would be shoiting myself if I was shorting this.
Hi Puddy, he's fine! Enjoying himself in Thailand at mo. Don't ask!!
Well I would have to agree with that, and thanks CF for reposting my earlier thoughts. I'm convinced this is coming good, just shame I've nowt else left to put in - done the car seats and sofa's... suppose I could sell 'er indoors (Oops, never repeat that if you meet her at the SH FRR celebration parties!!)
Haha of course meant - FRIES THE SHORTERS
Dan, CF73, Right on. Zara is VERY comfortable and confident, I just hope he doesn’t let too much slip out before he dries the shorter swell and truly.
@theProd - not Florida for me, am already entrenched in Portugal (Lagos) ... on the Marina, just waiting for this to come off before handing in a little white envelope :)
@Dougal - as Kickmuck said they're Vendor shares which have been preagreed to sell. I said this before and I know Mole disagrees. But a condition could easily be that if a vendor was also a major competitor of the 'buyer' (like Schlumberger) they may be required to sell them before a deal, in order that the buyer doesnt pass any advantage to the FRR vendor/their competitor... but who knows
This is just a sweetener for a much bigger deal, imv. In pitching a major deal most corporates leverage their IP to 'sweeten' the bigger deal, that is using it as a differentiator versus close competition.
This agreement to collaborate on western Georgia geophysical analysis AND TRAIN UP the GOGC staff is typical of a relatively low cost sweetener on the side of the supplier. Providing GOGC access to Exxon staff, super computers and analysis techniques is a high value differentiator to GOGC though.
Mine was a different industry, but I tell you, I've been there and done it. Nor would they commit to this if the bigger deal was not agreed.
This is a very significant step forward - and in my opinion a deal is signed (or imminently will be) for B12/FEGL farm-in/buy-out.
Interestingly, Zaza said that of the two options to farm-in or JV, GOGC needed to approve the former (farm-in). ie requires Georgian gov approval to assign the PSA (or part there-of). In return for doing this, Exxon promised a bowl full of sweeties to GG.
Job done IMO... bloody great news.
"If—" is a poem by English Nobel laureate Rudyard Kipling, written circa 1895 as a tribute to Leander Starr Jameson. It is a literary example of Victorian-era stoicism. I think he wrote it fortuitously for FRR holders! I'm sharing it here having sent to my 3 sons, all of whom are FRR holders... there're a number of lessons. Cheekily I have added just 3 words to the poem... ;-)
IF you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don't deal in lies,
Or being hated, don't give way to hating,
And yet don't look too good, nor talk too wise:
If you can dream - and not make dreams your master;
If you can think - and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you've spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build 'em up with worn-out tools:
If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: 'Hold on!'
If you can talk with crowds and keep your virtue,
' Or walk with Kings - nor lose the common touch,
if neither foes nor loving friends can hurt you,
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds' worth of distance run,
Yours is the Earth and everything that's in it,
And - which is more - you'll be a (very, very, rich) Man, my son!
Star, only on the normal web version. The mobile version of LSE only allows you to Reply or Report posts - and unfortunately I’ve used both in equal measure recently! Lol