Member Info for Madpunter

bugsy-b - That was posted on the 21st august :-

Posted by StevenP @ 10:02 :-

Interesting
You probably already know this but Zurab Kiliptari is advising on our disputes as well as BP on:-

British Petroleum/BTC-SCP: Advising in connection with the construction, expansion and operation of Baku-Supsa Western Route, Baku-Tbilisi-Ceyhan oil pipeline and South Caucasus gas Pipeline projects.

https://www.dentons.com/en/zurab-kiliptari

https://www.lse.co.uk/chat/general/commodities-and-mining/frontera-archive-41C7D130-7E51-4344-82E7-83B697F53322.html?page=21

CF - I agree with your thoughts about the ADR process providing insight into what is happening. When the ADR process is out of the way I will discuss the Smoking gun (YA) situation in more depth. Alternatively, I will discuss it if a deal with the BP et al transpires or an announcement that SH/O, Mourant and the liquidators have all been paid.

CF - My post from the 13th September from the Archive is copied below :-
Posted by Madpunter yesterday @ 11:04 :-

Part 2

Posted by bugsy-b @ 20:03 :-

FRONTERA IS SUING GEORGIA
"29.AUGUST .2019 21:37 ECONOMIC
FRONTERA IS SUING GEORGIA AND SEEKING $ 3.5 BILLION IN COMPENSATION

https://www.bm.ge/ka/article/frontera-saqartvelos-uchivis-da-kompensaciis-saxit-35-miliards-itxovs/39074

Posted by Sycric @ 22:55 :-

Any suing of countries normally is on this. Cannot see if so seems like fake news.

https://icsid.worldbank.org/en/Pages/cases/AdvancedSearch.aspx

The two posts copied above were posted on the 29th August and copied from the second and fifth posts down of the link below :-
https://www.lse.co.uk/chat/general/commodities-and-mining/frontera-archive-41C7D130-7E51-4344-82E7-83B697F53322.html?page=22

IMHO the timing of the 'old news' posted in the link by bugsy-b and the fact that there's no listing in the link posted by Sycric points to someone trying to influence the case in the Ukraine.

See the 7th post from the bottom of the link below :-
https://www.lse.co.uk/chat/general/commodities-and-mining/frontera-archive-41C7D130-7E51-4344-82E7-83B697F53322.html?page=23

CF73 - IMHO the only chance of FRR making a deal with SH/O under ADR was if BP et al wanted FRR lock, stock and barrel. The now show in the Ukraine, plus the lack of acknowledgement of the Texas case, suggests that BP et al just want Block 12 and a deal under ADR is unlikely. Assuming FRR have the money to pay the liquidators and Mourant from monies left in FEGL from production, a deal under ADR has no benefit for FRR except for loosening time constraints. Furthermore, why would SH/O want a deal under ADR, when the smoking gun (YA) could still be used in the future. IMHO the smoking gun is a last resort to only be used if FRR go to appeal in another jurisdiction, as the collateral damage to Troy Rillo and YA could result in ruin (who would want to lend from them if it was proved that they naked short). However, could SH/O trust this reason as why this information would not be used in the future? The timing of events could also be significant, as if the liquidators complete their task before the ADR deadline, can FRR request the monies be paid into Escrow until the California case is concluded?

Mole - Assuming that Zaza wanted to abide by the NDA , then when you asked if the 3 trainloads of oil auctioned by the GG was from FRR, he couldn't tell you if it meant that the production could be ascertained. Also, the GOGC website as well as FRR's both changed and the new websites don't show lots of relevant historical data. We know that there was a problem selling the oil in 2018, which could explain the three trainloads in quick succession. The two trainloads per year prior to the Autumn of 2018 match's FRR's two trainloads per year. Why would the GG only sell two trainloads by auction, when they produce and have a share from other companies for a greater amount per annum? FRR's oil is different as the company hasn't got to the point where the GG's share starts, after the sunk costs are recovered. As the GG was in dispute about the sunk costs it is logical they would want to keep an eye on the amount sold until those costs are covered. As they would be selling FRR's oil then it would be auctioned for transparency. Why would they need to auction their own oil or oil received under PSA's? If my assumptions are correct, any further trainloads auctioned in 2018 would probably have been paid in 2019 due to the 45 day settlement and the Xmas/ New Year holiday period. This accounts for 500k barrels of oil produced, but only a profit of $1.2m, plus gives the right flow rates to produce up to 2kbopd stated in the interview.
There's no listing of any arbitration between FRR and the GG, only an article from a year ago, which was released while FRR were fighting for Dolphin. Furthermore, a 99% grab could not be referred to as 'a sledgehammer to crack a nut', whereas a 5% RA deal resulting in a 2.45% increase in the 51% GG share to 53.45% under the PSA could be described in such a way.
If the 5% RA is not a way of giving the GG an extra piece of Block 12, in exchange for helping to get rid of SH/O by transferring the asset, what is it for? A 5% Royalty of current production wouldn't be enough to satisfy the DoS if my theory of enough money left in FEGL isn't believed. Therefore, I don't see any alternative as to why the 5% RA was left in FRCC, a company which was going to be liquidated.
I think that the Mourant case, the liquidation of FRCC and the Texas case will all be resolved by monies left in FEGL from production revenue.

Timster - It was tongue in cheek. If the oil figures were known, then even after over a year of negotiations with BP, BH and possibly Exxon, another major could come and offer more for a share. It could then take many more months, which is why they sign NDA's and keep schtum.

Apologies in haste I used the wrong figure for 2018, it should have been 30159t = 232525.89bbls. The 2015 stated low point doesn't tally with the GOGC figure of 40206t = 309988.26bbls. Even if the oil was predominately heavy crude, it would not reduce the totals by anywhere near enough (the conversion factors range from 8 light crude - 6.6 heavy crude).

https://www.platts.com/IM.Platts.Content/MethodologyReferences/ConversionTables/Images/CCSS1015_Energy_Industry_Conversions_LRG.pdf

Earsbern - I agree, their figures of 0.4bbl/d/1k = 400bopd = 146,000 per year. Yet the GOGC state an average of 43.6kt over the last 10 years. 43.6kt x 7.71 = 336,156bbls. Click on statistics on the GOGC link ad a production bar chart shows 30050t for 2018 = 231,685.5bbls. Way out even without the oil from FRR which is under a NDA. If your trying to discredit the figures Timster, you must try harder.

Tsbs - BP will want all lose ends tied up. IMHO the money from production has been been paid into FEGL to cover the SH/O debt, which will nullify the Texas case.

I had to look twice at the time and date before I remembered that they're 2 hrs ahead.

Links for the previous post.
https://www.reuters.com/article/us-bhp-divestiture-bp/bp-pays-105-billion-for-bhp-shale-assets-to-beef-up-us-business-idUSKBN1KG34V
https://en.wikipedia.org/wiki/South_Caucasus_Pipeline
https://en.wikipedia.org/wiki/Baku%E2%80%93Tbilisi%E2%80%93Ceyhan_pipeline
https://www.dollars2pounds.com/

Block 12 has 19.1 billion barrels of oil equivalent with costs of less than $12/bbl, but very few wells producing, although there are already 1204 wells drilled, some that are suitable for side tracking. However, the costly part of the infrastructure, the transportation pipelines are already in place. BP owns 28.8% of the SCP natural gas pipeline and is the operator and BP owns 30.1% of the BTC crude oil pipeline (Exxon owns 2.5%). The gathering pipelines (see link below) which are much shorter and smaller in diameter , and therefore very much cheaper will need to be built, plus the processing facilities.

https://earthworks.org/issues/gathering_pipelines/

BP bought 4.6 billion barrels of oil resources in the Permian that's already producing 19k bopd, but with costs of well under $50/bbl for $10.5bn. Well under $50/bbl could mean more than $49/bbl or more than $40/bbl, therefore I will evaluate using both figures. The sale went through in July 2018 when the oil price was around $68/bbl for WTI. Therefore using the two figures for costs/bbl = profits of $28/bbl or $19/bbl. Multiplied by the 4.6 billion barrels = $87.4 - $128.8bn of profit. Therefore, the $10.5bn paid for the field is 8.15% - 12.01% of the profit for the field based upon the PoO for WTI at the time of the sale.
Block 12 has a conservative $48/bbl profit on the recent Brent of around $60/bbl (Block 12 sells at a $5 premium). 19.1 billion barrels x $48/bbl profit = $916.8bn. Just using 8% as the top buyout parameter = $73.34bn = £58.09bn at todays rate of $1 = £0.79. This would give a share price of £3.69. However, as money needs to be spent on cleaning and side tracking wells, gathering pipelines and processing facilities, then the figure will probably be less.

johnnybbad - Possibly, or maybe the door is left open for someone else, like SOCAR to bid and deal with Russia. I was thinking more in how the Caucasus regions hydrocarbons are developed without upsetting Russia.

My previous theory was that the no show in the Ukraine and lack of information on the court cases were linked to a total buyout after an agreement through ADR (after all lose ends were tied). The new information about the Texas case suggests that SN and ZM haven't even acknowledged that case. If they were negotiating in ADR, then I doubt that they would have ignored the Texas case. This new information, plus revised thoughts about BP et al, and possibly FRR as well (due to Avi8r's post and my 26th July post), suggests that they don't want the Dolphin prospect, or due to the timescales are no longer interested. Therefore, IMHO BP et al are not after FRR lock, stock and barrel, but just Block 12, this means that as soon as Mourant and the liquidators are paid (nullifying the Texas case), a deal can be signed. The Californian case can then proceed at leisure, as it's just noise. Either FRR win with discovery evidence, or they win on appeal in another jurisdiction with the smoking gun (YA) and SH goes off to meet Zib's Mr Big.

After reading Avi8r's post from Sunday i looked back at my post from the 26th July. I've copied both posts below :-

Given trumps comments on the middle east now being a lost cause invites debate on whether there is political awareness involved in the Caucasus. Saudi Arabia is currently 2nd with 266,455 million barrels, but 19bn barrels puts Georgia next in line to Qatar (https://www.worldatlas.com/articles/the-world-s-largest-oil-reserves-by-country.html)

I am not surprised to see this megalomaniac behaviour from him, but something must be driving his decision making. He really hasn't got the intelligence to work these things out for himself. I am still of the view that strong politics are at play here behind the scenes and Frontera is merely a pawn in the process, Hope a minor irritation, which we are watching play out.

Whether it re-lists on LSE is the big question as if that does happen I think many people will become quite wealthy, particularly if Madpunters numbers are anywhere close to reality.

Posted by Madpunter @ 18:57 on the 26th July :-

The big picture
As the world moves towards a lower carbon model, then off-shore drilling with the extra risk (think about the BP spill in the Gulf of Mexico) will decline. Some projects will never come into production. The world will still need oil and gas, but the emphasis will be on gas for fuel in the transitional period. As for the oil which will still be required for non-energy uses, the emphasis will be for on-shore. With this in mind and BP waiting in the wings to sign on the dotted line, why would FRR want the Dolphin License? Furthermore, the Russian annexe of the Crimea would add to the risk of the venture becoming profitable. IMHO FRR initiated the tender process to get rid of the license, as BP were not interested in another off-shore venture. IMHO FRR is close to signing a deal with the super majors and the court cases are just as Kickmuck referred to as 'just noise'.

Posted by BezzyBushFire @ 19:11 :-

Evening MadPunter,

I'd recommend sticking your 18:57 post into the Frontera archive. We're going to look back in the not-too-distant future over these retained posts and I don't think you'll be far off the mark.....

IMHO big politics are at play like Avi8r suggests and adding my thoughts from July results in my opinion changing about the Ukraine bid and court case. Trident is out of the picture now and the door is left open, but will FRR bid if BP et al just buy Block 12 and BP are not interested in a JV in the Ukraine? If BP et al buyout FRR, will they be interested in a bid for Dolphin? I'm not so sure and while I assumed that the Zaza no show was linked to BP et al wanting FRR lock, stock and barrel, I may have been barking up the wrong tree.

CF73 - When FRR pay the liquidators and Mourant, the case against SH/O in California if it went to trial would result in either a win for SH/O or for FRR, as the Texas case is nullified. The former would cost FRR court costs and the latter would cost SH/O court costs and possibly $56m (the jury could even increase the amount). If SH/O loses the case or even if he wins on a technicality and enough information surfaces from the discovery, the SEC could then prosecute. This could result in a possible custodial sentence. Therefore, it is not in his interests for the matter to get to this point. Also, there's the smoking gun from the possible links with the YA CRS (Civil Regulatory Settlement).

Chris572 - Oil reserves denote the amount of crude oil that can be technically recovered at a cost that is financially feasible at the present price of oil.[1] Hence reserves will change with the price, unlike oil resources, which include all oil that can be technically recovered at any price. That is why my earlier valuations were 1 - 3% of the in ground value and now for the reserves are 5 - 10% of the in ground value. Therefore, if more of the reserves are P1 the figure will be nearer 10% and if more are P3 then nearer 5%. This is a huge amount of reserve, 19.1+ billion barrels of oil equivalent, which will place Georgia 15th in the world list of the largest reserves (see bottom link below).

https://en.wikipedia.org/wiki/Oil_reserves
https://en.wikipedia.org/wiki/List_of_countries_by_proven_oil_reserves

Shafqut - BP needs gas as they can see that it is a major challenge to get Carbon neutral by 2040 and gas is much cleaner and lower in Carbon than coal. Also, the reduction in Nuclear greatly reduces the chances of meeting those targets. Yet Extinction Rebellion want this by 2025, which will only displace manufacturing to China and India, increase energy costs and inflation, plus it will burden the poor. Perhaps they're NIMBYS as it will increase pollution, but it will be in other countries (see OPG where the share price has dropped due to coal costs).

Mick - No. The low estimates previously were 1 - 3% of the valuation when it was based upon oil in place and recoverable. Now it is based upon reserves, with a field that has wells that can be cleaned and side tracked, plus plenty of pipelines nearby. Also, costs of less than $12/bbl are very low, plus the oil is top quality. Therefore, my parameters have moved to 5 - !0% of the valuation. This is still a very good deal for BP et al, as if my production figures are right for the Eldari B of 1500bopd, then with just the four cleaned wells and T39 = 7500bopd from just 5 wells. This is $164.25m pa @ $60/bbl, and with 50 wells = $1.645bn pa and this just for the oil.

Mick - £21.04bn - £42.15bn at todays rate of $1 = £0.79, which is £1.33 - £2.67 per share (15,760,835,403 shares).