RE: Warning Letter to FEGL 30.12.20 (sorry for the formatting)3 Jun 2021 05:18
Pt.2
Among other issues, we have in mind letters (see, Annex 2) sent by Mr_ Steve Nikandros (As the chairman of the board of the Frontera Resources Corporation) on 21 October and 17 December of this year, in which your authority as field as the issue of any work
program and budget is called into question. Whereas as Mr. Nikandros put it: due to the Coronavirus pandemic, operations of oil and
gas have not been ongoing since spring, hence following the notification on the termination "PWGX" and should not be ongoing now.
The monthly letters and well operation reports sent from Frontera Eastern Georgia LLC speak against Mr. S. Nicandros' statement. It is well perceived from the documents that oil extraction has been ongoing and still is, including outside the territory of Exploitation/Development Area, from the N25
well of Marzaani field and 39thwell (IX horizon) of Taribani field. This fact suggests the existence of the conditions present before the Arbitration Award and its obvious non-performance. Pursuant to subparagraph C of the operative part of the Arbitration Award, the tribunal commends, that Frontera
immediately return Exploitation/Development Area outside XII licensing block (which is defined by the Annex F of PWGX and by the second addition to the contract).
I will also remind you here that LEPL State Agency of Oil and Gas presented you the relevant map
that was annexed to the letter N205-193 of 5 August (see Annex 3 of this letter), regarding the demarcation and redemption of the Exploitation/Development Area and the territory outside it per the
Article 642(c) of the Arbitration Award. Pursuant to this map, starting from 17 April of this year, you were not allowed to extract oil and gas and carry out other operations outside the territory of Exploitation/Development Area, which considering the conditions described in this letter, for
Mirzaani field represents 17,2 km2of surface area and XVI horizon in depth and for the Taribani field respectively 17,66 km2and XVIII horizon.
It can be said, that Frontera has been ignoring and still ignores the demands of the Arbitration Award regarding the immediate redemption of the territory outside Exploitation/Development Area, has not acknowledged the borders of Exploitation/Development Area determined and approved by the Annex F of PWGX and its second addition and has been refusing to comply with its obligations disclosed in the letter sent by Frontera to LEPL State Agency of Oil and Gas on 8 May of this year (In accordance with the Tribunal's ruling, Frontera hereby relinquishes those territories on BlockXIIlocated outside
the designated Exploitation/Development area in accordance with the appropriate provisions of the BlockXIIPSC).
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