Member Info for Madpunter

Mills240 just posted about a Spreadex message advising all FRR shorts will be closed tonight.

Malcolm Graham-Wood's view :-
Frontera are having some problems with Yorkville it seems over method of payment. As I thought I saw it FRR had the option of paying monthly by cash in order not to issue more shares into the market, at least that’s what I wrote back then. It seems that unsurprisingly they were shocked to get a conversion notice in respect of 82m shares for August and 94m shares for September payment. In addition there is now a default notice been issued and total closing payment is expected.

The situation seems to revolve around whether FRR are entitled to pay with cash or whether Yorkville can demand shares, at present it looks to be one for the lawyers although I would have thought that it was pretty much in black and white. This does highlight the problem that has been rife in the sector for some years that borrowing money from operations that take shares in return leaves companies wide open to crippling dilution and should be avoided at all costs.

On the upside for FRR the recent RNS showed that these are exciting times at Block 12 in Georgia with distinct possibilities on the farm-out front with technical due diligence being done at the moment. If either were to result in a successful deal then the upside for Frontera is considerable.

IMHO YA is interested in shares because it was a baited trap by FRR. They suspected that YA were shorting FRR and covering their shorts with the shares they received each month. They sign a new agreement with YA to pay in cash each month, but with the option of issuing shares instead or paying the whole loan off in full. YA thinks that they will still receive shares initially, as FRR have left the options open, and YA continue shorting. They short more after the first payment to drive the price down and buy back the shares at a cheaper price, but the NDA RNS, thwarts their plan.

Sorry that might read that 1onic is the broker to some. Just to clarify, SP Angel that posted an article about this morning's RNS is the broker and 1onic posted their article on this board.

Posted by 1onic on the M board :-
Zac Phillips of SP Angel:

“It’s been a long summer and one in which the Company has made zero progress anywhere, in fact, every well intervention appears to result in more questions than answers, and every announcement appears only to sow confusion. To date, the Company has funded itself with convertible securities, but today we learn that it has now fallen out of bed with its funding party. This to us sounds like déjà vu when it tried to escape its obligations under its convertible debt it was humiliated as the debt is still on the balance sheet.

YA has a long history of execution of these plans, and we would be very surprised if it has got it wrong. Given the management style at FRR, we would put greater stock on it being management’s failure to understand the obligations of the loan instrument - but so long is that list now, does it really matter? We keep coming back to the fact that the basics in this company are lacking. No technical experience at board level, or appropriate experience at any level, to undertake a strategic review of the asset base, hence a lack of understanding as to what to do next."

IMHO this points to SP Angel as being the broker who was shorting for YA, if my previous post in this thread is correct.

1onic - Obviously the broker who was shorting the shares for YA IMHO.

Laks my post copied below is what I think has happened regarding YA, who were getting shares in lieu of their preference shares, until a change in agreement to a cash payment.
Lunbumbashi - IMHO the possibility of payment with shares or cash announced in July was a baited trap by FRR. FRR thought that YA were probably shorting prior to receiving shares, but couldn't prove that they were. By leaving the possibility open, YA continued shorting, but were then left without the shares and were paid in cash. They probably continued shorting to drive the price down, enabling them to buy back the shares they needed to replace at a cheaper price. However, they were caught out by the NDA RNS and subsequent rise.

Lunbumbashi - IMHO the possibility of payment with shares or cash announced in July was a baited trap by FRR. FRR thought that YA were probably shorting prior to receiving shares, but couldn't prove that they were. By leaving the possibility open, YA continued shorting, but were then left without the shares and were paid in cash. They probably continued shorting to drive the price down, enabling them to buy back the shares they needed to replace at a cheaper price. However, they were caught out by the NDA RNS and subsequent rise.

Shafqut - YellowJerseyIR have already answered provided that information. Just scroll down 3 posts and you will read what I have copied below :-

I have been told that fully paid and agree if they had miss payment the NOMAD would have insisted on an RNS.

Thanks Laks. YellowJersey have announced a shareholder meeting for the first week of October, so I expect good news before that date.

Post by bugsy-b on Saturday below :-
Cracking little report from March of this year..."Untapped world class hydrocarbon potential of central Georgia"
Good to see the Georgians are now coming to terms with the potential of oil and gas out there..

This is a Georgian report of central Georgian license blocks just next to ours, And interesting to see that Repsol management and geoscientists have been assisting the Georgian government agencies...

There are some good illustrations and a very interesting basin modelling on page 4 which shows that the Georgian basin model is almost identical to the Azerbaijani models, Including Shah Deniz..

https://georgiaoilandgas.ge/wp-content/uploads/2018/04/AAPGMeeting-March-2018.pdf

Post from Moleinahole onSaturday below :-
Why do you think they would possibly like the block back! I've said a few times that news that could cause a shift for FRR may not come from FRR. I think Schlumberger must be deeply involved in the work to re-evaluate the prospects in Georgia and I do think that the work that FRR have done has substantially contributed to the renaisance of interest. How people laughed at the 18bn barrel of oil and 202 tcf gas numbers Steve quoted. But you see them in that document!

Keep them. Everything is pointing to the majors buying Block 12 or a JV/farmout. Nobody believed the 18 MMbls of oil or the 202TCF when FRR, yet now companies like Schlumberger are drilling in Blocks nearby and the Georgian Government are advertising the possibility of a huge continuous resource that links with Shah Deniz in Azerbaijan (it's the same Kura basin and same Maykop geology, but onshore in FRR). The Georgian PM is having meetings in the Whitehouse today.

I have a feeling that Zaza might shaft the MM's also with a second RNS with good news.

Even YA know that the shares are going to be very lucrative shortly and they want shares instead of cash. They don't like the fact that FRR shafted them by getting a new deal signed for cash before the RNS about the NDA's.

Shafted YA, they don't like it and are trying to get their own back. They know that the shares will be worth much more than the monthly cash payments. I wonder if Zaza is about to shaft the MM's and release another RNS with good news, after they drop the share price and take plenty of buy orders after the sells?

They're back today, so they obviously didn't have an answer to yesterday's excellent research!

IMHO after 20 years the directors would probably want some early payback as well. Hence, my posts and previous parameters of $2 - $20bn for JV/farmout - takeover of Block 12 (based upon 0.1% - 1% of the value of the recoverable oil and gas).

Coggy - While excessive oil flows would normally be avoided, for the reason you stated, plus the possibility of damage to equipment etc. FRR might opt for greater flows as the pressures need to be equalised for zone 19 (and possibly any lower zones), before comingling with zones 9, 14 and 15 (and possibly zone 13).

Given a choice between a free carry and a small lump sum or a larger lump sum and having to pay equal shares of any capital costs, then the latter would be my choice. Just for example, if the costs were $3bn, split three ways, with FRR getting £1.5bn for relinquishing 2/3 of Block 12 instead of a fee carry and maybe $650m lump sum. The share price would reflect a market cap. similar to those amounts initially. The former helps to protect FRR being taken out on the cheap and allows share holders to bank some early profits.

While in theory JV's do not require large cash outlays, with Block 12 having 18MMbbls of oil and 202TCF of gas, even 0.01% of the recoverable value equates to $2bn. The amount will be depending upon the percentage of the Block relinquished to possibly two majors and whether there's a free carry. Imagine if the cost of a pipeline, gas processing facility and drilling hundreds of wells came to $3bn and FRR had to pay a third, with equal shares of Block 12. They would want enough to cover their portion of the outlay, plus money for exploration in Moldova and Ukraine. They would also possibly want enough to pay a special dividend.