Member Info for Madpunter

Timster - Read posts Tue 11:10 and 11:11 posted by Devex in the link below :-

http://www.lse.co.uk/view-general-chat-thread.asp?forum=commodities-and-mining&thread=41C7D130-7E51-4344-82E7-83B697F53322&page=last

OLADAPO007 - Corporations have limited liability. If the new 'Frontera entity' (quote from Hopes Response) is not directly linked to the debt, how can they liquidate?

Look at Hopes Response Page 7/21 lines 21-27, part of which I've copied below :-

'Additionally, Outrider has learned that Frontera has approved a production sharing contract through operating company FRGC, which improperly grants an unknown party Green Capital LLC a security interest directly in the operating assets, in violation of the OMF loan agreement.'

IMHO it will take time to pay SH/O from production revenue, but if time is running out then they have the $150m PSA option, which is more costly to FRR.

The $150m is NOT A LOAN! It is a PSA. GC will not be paid interest, but a share of future production. IMHO it is a backstop in case the Injunction is not granted. FRR have more than one bite at the cherry. If the Preliminary injunction is not granted, they apply for the Full Injunction. If this is not granted, they Appeal. While this is happening FRR are still selling oil and gas and the asset is in another FRR company, that SH/O doesn't even know (see P7/21 lines 21-27 Hopes Response). My previous estimates for production show that if SN and ZM sign a Declaration of Solvency, they can pay the $22.9m within 12 months. IMHO they don't want to show the revenue and flow rates unless they have no choice, as it might impact on the NDA with BP. IMHO as the $150m PSA will give a bigger piece of the pie, it is Plan B, but it also allows leverage in discussions with BP, as FRR could prove up zones 21, 23 and 25 and greatly increase production.

Devex's posts have been copied to the Frontera Archive :-

http://www.lse.co.uk/view-general-chat-thread.asp?forum=commodities-and-mining&thread=41C7D130-7E51-4344-82E7-83B697F53322&page=last#last

Thanks Zib.

Anyone care to elaborate on the link between FRR and the Rothschilds?

I've re-posted the tot post from yesterday and some of the subsequent post's by ivyspivey in the Frrontera Archive :-

http://www.lse.co.uk/view-general-chat-thread.asp?forum=commodities-and-mining&thread=41C7D130-7E51-4344-82E7-83B697F53322

' But I tell you what, having heavyweight, Rothchilds, in our corner will help' - taken from the end of the first paragraph below. Anyone care to elaborate on the link between FRR and the Rothchilds?

Great to see you back Mr ToT, and as usual, magnificent input to the discussion. Yes, this Andrew Knott fella looks a bit dodgy and the type that would also ‘sail close to the wind’. If this does go to a Jury trial, FRR would well be within their rights to summons him to the witness box regarding his dealings with Hope and FRR when he was at Lothians. And we don’t know what info FRR already has it’s in possession. But I tell you what, having heavyweight, Rothchilds, in our corner will help compared to this snooty nose kid.

Anyway, one other major difference I want to highlight between our situation and MOIL and that is, in the MOIL undertaking, there was a specific provision relating to the Outrider appointed Director: ‘…will not vote in any meeting of the Board where conflicted’. Well, what did we give Hope when he joined our Board??? ‘Veto’ power, which he freely exercised by rejecting at least 2 lending proposals. Was he conflicted when he used his veto? May be that is why FRR went to Cali because they feel they can present a strong case (with their lawyers) and convince the Jury.

Who knows but with legal cases, it feels like rolling the dice…and I don’t know which way it’s ultimately going to go…

If Block 12 has been transferred, and why is SH/O contesting the injunction?

IMHO there are a number of possible reasons.
1) It may still be possible for SH/O to apply through the courts to try and unravel the transfer and possible deal with GC.
2) SH/O may now realise that he can't get the asset and that it will revert to the GG.
3) If SH/O still pursues the asset through the courts it might delay work or a deal for FRR, or may result in the loss of Block 12 to the GG.

IMHO FRR want the injunction to prevent the points above. Whereas, the points above, give SH/O bargaining chips, which may become obsolete after the injunction is granted.

Further to my earlier post copied above, there are a number of additional points below :-

a) Any pursuit of Block 12 will not only require legal pursuit through the Caymens Islands Courts and Californian Courts, but also through the Georgian Courts, as indicated by bugsys-b's post last Sunday.
https://matsne.gov.ge/ka/document/view/18424?publication=29
b) SH refers to the transfer of the assets to a 'Frontera entity' and 'Hope's request for basic background and explanation was denied' from Hopes Response, which implies that he doesn't even know which company to pursue atm.
c) Does SH/O have the money to pursue FRR in three jurisdictions?
d) Will SH/O's lawyers want to pursue FRR in three jurisdictions, especially if they think that it reduces their chances of remuneration?
IMHO when all the above is considered, SH/O has zero chance of getting hold of Block 12, but could damage or destroy FRR. Therefore, FRR need an injunction or to pay the $22.9m into Escrow until the court case is concluded.

I assumed that the 'Order on Motion for Extension of Time to Answer' was a request fro FRR's lawyers for a Preliminary Injunction, and the 'Preliminary Injunction' document was the granting of the request. Therefore, after reading Taffy52's posts I've altered the last sentence of my earlier post to read as follows :-

IMHO the following is what has occured :-
FRR apply for a TRO, which was declined.
FRR transfer the asset and SH/O starts to liquidate FRCC after resigning.
SH/O applies for an extension to allow extra time on the opposition to an injunction.
SH/O applies for an extension to allow extra time on the defense to the FIduciary Duties Claim.
FRR has no objections to the extra time as long as there's no stay on the Discovery.
SH/O reserves the right to contest the Discovery at a later date.
The extensions are granted.

IMHO due to the above FRR have applied for a Preliminary injunction to allow the status quo until the court hearing.

Taffy - Has the preliminary injunction been granted?

RR - Discovery will grant access to all of SH/O's communications. There are records of texts emails etc. even if SH/O has deleted them.

Why is there a need for an injunction, if Block 12 has been transferred, and why is SH/O contesting the injunction?

IMHO there are a number of possible reasons.
1) It may still be possible for SH/O to apply through the courts to try and unravel the transfer and possible deal with GC.
2) SH/O may now realise that he can't get the asset and that it will revert to the GG.
3) If SH/O still pursues the asset through the courts it might delay work or a deal for FRR, or may result in the loss of Block 12 to the GG.

IMHO FRR want the injunction to prevent the points above. Whereas, the points above, give SH/O bargaining chips, which may become obsolete after the injunction is granted.

Sharealot - Also, by replying to him, there's a risk that important posts may be deleted, when he's reported. I was going to copy one or two of the posts about the two extensions from yesterday, but they've disappeared, along with a lot of the red filter boxes.

IMHO the following is what has occured :-
FRR apply for a TRO, which was declined.
FRR transfer the asset and SH/O starts to liquidate FRCC after resigning.
SH/O applies for an extension to allow extra time on the opposition to an injunction.
SH/O applies for an extension to allow extra time on the defense to the FIduciary Duties Claim.
FRR has no objections to the extra time as long as there's no stay on the Discovery.
SH/O reserves the right to contest the Discovery at a later date.
The extensions are granted.

IMHO due to the above the judge has granted a Preliminary injunction to allow the status quo until the court hearing.

pyro - You might find some of the answers in the Frontera Archive :-

http://www.lse.co.uk/view-general-chat-thread.asp?forum=commodities-and-mining&thread=41C7D130-7E51-4344-82E7-83B697F53322&page=last#last

As well as being conservative with the POO, plus the extra revenue from the higher volumes during the productive testing, I haven't included any of the gas revenue or the heavy crude from 2019.

IMHO If my estimates for revenue and costs are close to the mark, then with the declaration of insolvency signed and backed by proof of the actual revenue and costs, an injunction against SH/O continuing with the liquidation should be granted. However, the loan from GC may well be executed prior to this event. Also, FRR could argue that without having to keep this money to pay off SH/O and the legal fees, they have 4 wells cleaned ready, which would greatly increase their revenue.

At the end of June 2018 FRR had $630k in cash and had received $1.8m in oil + gas revenue for 2018 and operating expenses of $6m (down from $$7.2m at 30th June 2017 (half-yearly results). The total operating costs in 2017 were $14.2m down from $17.5m in 2016. Therefore, I will assume the $6m for H1 2018 to be replicated for H2 2018 = $12m for the year (not including the legal costs of the current court cases). I remember that someone posted the upfront costs were $2m for the legal fees.
Therefore, FRR require $22.9m (for the debt payment) + $2m legal fees = £24.9m.
My estimate for oil revenue in 2018 = $13.3m (at a 529bopd for T39), therefore, less the $1.8m for H1 = $11.5m + $0.6 cash = $12.1m for H2 2018.
H1 2019 is 180d x 916bopd x $65/b = $10.7m, which is $22.8m revenue for the year since the last accounts were published. Therefore, without the debt repayment and court costs $22.8m - $12m = $10.8m. Therefore, if the declaration of solvency is signed by ZM and SN by the end of this month, there will be another 11 months profit, = $9.9m as the $10.8m is to the end of June. Total money by the end of the 12 months declaration of solvency = $10.8m + $9.9m = $20.7m. Add a $5m loan from Zaza = enough money from the oil and gas revenue.
This doesn't include the extra oil revenue when the production testing was carried out, or the higher POO.

bugsy - Add those articles to the lobbying and the resultant diplomacy between Uncle Sam and the GG, plus the points in my post last Friday (copied below), and IMHO SH/O's chance of getting Block 12 is ZERO.

Why would the GG deal with someone who has delayed them getting their 51% share of the PSA. If FRR ceases to exist the GG regains 100% of Block 12. FRR has a Georgian director and has helped Georgia with a Medical Counseling Project, Agricultural Project and Safe Motherhood Program. IMHO due to these facts alone, the chance of SH/O getting Block 12 is Zilch!
https://fronteraresources.com/csr/#community