Member Info for Madpunter

I've copied bugsy-b's post @ 14:24 into 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

kaisersuzae - Think of this like a war.
First Battle. To protect the asset. STALEMATE.
Second Battle. To remove SH from FRCC by getting him to resign. WON.
Third Battle. To pay the money owed into Escrow until the court case is concluded. ONGOING.
Coup De Grace. Using the evidence from the discovery, YA etc to prove the case against SH/O. APPROACHING THE STARTING BLOCKS.

FRR has moved the asset out of harm's way, but lost the TRO and SH/O has started liquidation proceedings on FRCC, that used to hold the asset.
If the GC loan is required for the Third Battle to be won, then it needed the Second Battle won, to remove SH's veto.
Once the debt money is paid into Escrow, the Final Battle may deliver the Coup De Grace, depending upon what's in the discovery.

Zen - I've copied my post from last Thursday below :-

When Zaza referred to the arbitration as "a sledgehammer to crack a nut" I think he was thinking about the sunk costs verses the value of Block 12. However, now it may seem that the arbitration was a sledgehammer to crack SH/O's nut.

Flakey5185 - IMHO the arbitration is concluded. See my post @ in this thread.

CF73 - Except i don't think SH/O will be paid when the money is secured. IMHO it will be paid into Escrow until the court case is concluded.

thefozzer just confirmed on ii that the other directors own the other $8m.

Star - It could also include the amount still held in loan notes by ZM and SN, if they haven't converted all their loan notes. I think someone posted a while back , maybe Zib, that they still held a small amount.

CF73 - SH may have thought that he could do a deal with the GG due to the arbitration request. See my post from Thursday copied below :-

The arbitration request by the GG that was reported by ShareP....'s (fill in the blanks as you see fit), started what appeared to be an orchestrated shorting attack on FRR. The leak is assumed to have come from SH/O, as the modus operandi of SH/O is to target distressed companies and restrict their funding capabilities. The subsequent naked shorting by YA and shorting by TW et al greatly restricted the avenues for funding. Thus, SH/O possibly saw the arbitration as FRR's Achilles Heel. Move on year and IMHO the Achilles heal has turned into a Trojan Horse. SH/O may have assumed that due to the following two points, the assets were unlikely to be moved :-
1) The request for arbitration by the GG.
2) The fact that if Block 12 was moved from FRCC without the approval of the GG it reverted to the GG.
IMHO due to the previous points and a window of opportunity between the two court cases, then SH/O tried to take control of the assets, by resigning and trying to liquidate FRCC. IMHO the arbitration appears to have been a lever in the negotiating of the sunk costs between FRR and the GG, which are about $400m. These costs are recoverable from production under the PSA, prior to the 51% (GG share) and 49%(FRR share) split in production. The price of the 1% in ground value of Block 12 (26.7kMMbbls x $60/b = $16bn) halved for FRR's share = $8bn. Therefore, the 5% royalty equates to $400m of the $8bn, the same amount as the sunk costs. Thus the arbitration request may have allowed the deal with the GG, which removed Block 12 from the clutches of SH/O's cronies. At the same time this facilitated his removal from the board and his veto of a possible loan with GC. Therefore, the arbitration turned from being an Achilles Heel into a Trojan Horse. All conjecture, but the theory fits.

I would assume that the $30 is the amount if the interest is deferred instead of paid quarterly. If it was $30m then I'm sure Hopes Response would list it as $30m.

Sorry I just noticed a mistake, it should be a ',' and not a '.' after the first '0' ie $22,910,094. I'll use $22.9m in future lol.

Star - It's $22,910.094 due payable by FIC to OMF in 2020. (see page 9/21 lines 24-25 Hopes Response).

CF73 - IMHO If SH/O has been 'naked shorting', then without shares in the OOCS, there is little chance of that happening. If he hasn't, then he only has until FRR sign the loan with GC or generate enough revenue from production. When FRR have the money to pay off the debt, IMHO they will pay it into Escrow and the chance of an OOCS for SH/O has gone. IMHO the only saving grace for SH/O if we get to this point which necessitates an OOCS, would be the super major's wanting everything done and dusted urgently prior to a deal.

CF73 - Granted. If I hadn't been typing and had read your post, I wouldn't have needed to reply.

Zeron100 - if SH didn't resign before triggering the liquidation of FRCC, then he would be blatantly breaking his Fiduciary Duties.

Gipps - IMHO If there was no window of opportunity between the cases, therefore no resignation of SH/O and the asset wasn't transferred, then I think the TRO would have been granted. As the asset is out of harms way, even if only temporary, then an urgent injunction, namely the TRO is not warranted. FRR are still applying for an injunction, which IMHO they will get. They still had to apply for the TRO as procedure as it negates other arguments.

First Battle. To protect the asset. STALEMATE.
Second Battle. To remove SH from FRCC by getting him to resign. WON.
Third Battle. To pay the money owed into Escrow until the court case is concluded. ONGOING.
Coup De Grace. Using the evidence from the discovery, YA etc to prove the case against SH/O. APPROACHING THE STARTING BLOCKS.

Gipps - IMHO the only way to permanently remove SH/O was to allow him to try and take the asset, as he had to resign or he would be blatantly breaching his Fiduciary Duties. If an injunction was in place this would not be possible, but between the two court cases, there was a window of opportunity. IMHO due to the arbitration SH/O would not have expected the asset to have been moved, as the compliance of the GG was required. Now that SH is not on the BOD the GC loan can be signed by the BOD without his veto. Nothing weak in those chess moves!

'Why Test?' from the bottom of page 45 in the link below gives a good account of the the difference between productivity and descriptive testing, especially from the last paragraph of the second column on page 46. Therefore, after the 180 day EWT on T39, I would expect the choke to be opened out and the well tested at much higher flow rates for shorter periods of time. However, even for short pulses at full bore it could produce significant quantities of oil, as it could flow over 4,000bopd (at an eighth of full bore, 8/64" = 529bopd, therefore 8 x 529bopd = 4312bopd, but the equation is not linear as there are other factors).

https://pdfs.semanticscholar.org/b4d2/d236dcd461181b957acc499f9cb4722740e6.pdf

If the EWT was carried out at the 529bopd rate then there's an extra 279bopd. Therefore, 180 days x 279bopd x $65 = $3.26m extra.
Since the start of this year there's been 128 days, which would add 128days x 916bopd x $65 = $7.62m (at the higher flow rate of 529bopd for T39, which is very conservative as the productivity testing would have been taking place). The $10m+ from 2018 plus the $3.26m and $7.62m = $20.88m+. Therefore, with the conservative oil price and extra from the productivity testing, there could be enough to pay off SH/O.
Obviously, that doesn't account for operational expenses and legal costs.

Estimate of oil for 2018
Prior to the last drilling campaign FRR were producing 220bopd, with 75bopd of heavy crude and the remaining 145bopd light crude. T45 and Dino accounted for 35bopd, which means FRR were producing 110bopd. The court papers show that T45 was producing 95bopd after the initial 270bopd. Dino initially produced 315bopd, which is 12% more than T45, therefore I will assume a similar decline, giving a figure of 107bopd (12% more than 95bopd). The actual figure could be more, as there was a suggestion about using a different fracking fluid to sort out the problem after the decline in T45. I have assumed that T45 and Dino both flowed at the initial rates until the end of the month ( April 8th - 30th for T45 and May 7th - 31st for Dino), then at the final rates afterwards. I have also assumed that the 180 day EWT referred to in the court papers was only carried out on T39 at the 250bopd rate and not the much higher rates due to flaring the gas. I have assumed no deline for T39 as it is not fracked and is only a 3mm hole at 6/64" choke and could theoretically flow at over 4,000bopd at full bore.
1st January to 8th April = 98 days @ 110bopd = 10,780bbls
8th April to 30th April = 22 days @ (110bopd + 270bopd) = 8,360bbls
1st May to 7th May = 7 days @ (110bopd + 95bopd) = 1435bbls
7th May to 31st May = 24 days @ (110bopd + 95bopd + 315bopd) = 12,480bbls
June = 30 days @ (110bopd + 95bopd + 107bopd) = 9,360bbls
1st July - 4th July = 4 days @ (110bopd + 95bopd + 107bopd) = 1248bbls
4th July to the end of the year = 180 days @ (110bopd + 95bopd + 107bopd + 250bopd) = 101,160bbls
Total of light crude for 2018 is a very conservative 144,823bbls
Total of heavy crude is 27,375bbls
Total oil production = 172,198bbls.
At a conservative price of $65/bbl for light crude and $40/bbl for heavy crude, then in excess of $10m was added to FRR's bank balance.
If productivity testing is carried out on T39 then after the 180 day EWT the flow rates will be a lot higher.
Using the rates above the minimum produced by the end of the year was 110bopd + 95bopd + 107bopd + 250bopd + 75bopd = 637bopd. Therefore, if the higher flow rate for T39 was used, 329bopd @ a choke of 8/64" = 916bopd, which would have given the 1,000bopd stated by Zaza in the podcast, if Niko was added.