Member Info for Madpunter

Agreed Zib. FRR didn't let YA off lightly for no reason and re-structure the payments without a plan.

ODR - The declaration of solvency on p53/54 of SN's Response states that the debt and interest can be paid in full within 12 months of the commencement of winding up. If SN and ZM don't pay after making that statement they could be liable to a fine of $10k and two years imprisonment .

https://www.dropbox.com/sh/6lw9qe59pv1dh8e/AADZUU2UqC1uFd72_O8iQA3Va?dl=0&preview=SN+response.pdf

pophead - FRR have a PSA where they get 49% of the production. Therefore, the 5% is effectively 5% of 49%, as the other 51% after the sunk costs are recovered belongs to the GG. As SH/O has resigned from the Frontera company owning that 5% and liquidated that company, then the 5% of FRR's 49% share returns to the GG. Hence, the new PSA will be FRR getting 46.55% and the GG getting 53.45% after the sunk costs are reclaimed.

AJW - Did you mean Niko?

Posted by Madpunter @16:24 :-

AJW - I agree with your point about the valuation, as IMHO FRR will drill the 4 cleaned wells to prove zones 21, 23 and 25 and possibly one co-mingled. I also think that the money from Green Capital LLC will be used to drill a side-track to prove the gas, unless a JV or F/O is agreed with the super majors. I don't think that ZM or SN will sell Block 12 at the lower end of the valuation, but only deal for the whole block if the money is very good and a percentage retained for future dividends. Otherwise, I think that ZM's podcast explanation of different companies with different deals for the various parts is more likely.

Posted by AJamesW @ 16:47 :-

Here another thought:
Green Capital LLC, are they the II that was funding Norio? If so FFR has a long history with this professional lender of First Resort!
But Norio got stopped by that Plank of an asset stripper who produces a damp squib rather than a massive, orchestrated, shorting crises, to bulldoze FFR into receivership. Although, what he did was bad enough.
The Gas side track makes sense; in fact two of them were in the original plan to prove the massive scope of the underlying Gas field. Still it’s left a hole in the local Gas supply business for Block to jump into.
Originally, we were going to drill three more Oil wells with a spare into EB and hit the zones from 20 to 25. That drill campaign would have provided the data for the whole of EB and the CPR which has yet to CPRed.
Two other Gas side track would then follow and be paid for from what loan money was left and oil sold from 6 wells. With YA paid off in July from oil sold.

posted by Sycric @ 14:03 :-

I will be honest $8bn is peanuts for Block 12, world class asset? 202tcf gas?
Taribani : - Natural Gas: 4.6 TCF (OGIP) of which 3.2 TCF is recoverable alone.

The risk has always been high here, hence the rewards.

Cyprus have a new gas field that has 5-8 trillion feet of gas. valued at 30-40 billion dollars, this doesn't even appear to be onshore.

Reference:
http://bit.ly/2VP1T7A

Posted by AJamesW @ 14:13 :-

Quote: The loan can then be used to pay off the debt or place the money in Escrow until the case against SH/O has concluded.
Escrow is far more likely; with confidence that FRR's case is sound why give Hopeless anything at all. Escrow satisfies the court that money which covers the disputed $20M is safe, pending the outcome of the various legal activities.
I still think the valuation is based on the $400M invested in the asset and recoverable via Tax relief, not what we can get out of the ground, or on sell to a Larger Oiler as part of a JV which might happen or not.
DYOR and I’m looking forward to changing that opinion to something far more positive.

Therefore, I'm re-posting the post below in case it gets lost in the dross :-

The PSA with the GG is a Royalty Agreement, where the GG gets 51% of the production. The transfer of ALL OF BLOCK 12 in return for a Royalty of 5% is another Royalty Agreement, which would require the approval of the GG. With this in mind now read my post below from Sunday :-
IMHO if a valuation for Block 12 (with what has been proven to date) has been agreed with FRCC and the GG for $8bn, then the 5% figure left in FRCC equates to $400m, which is the value of the sunk costs. Therefore, when SH/O tries to take the 5% the GG take it back and gain the equivalent of the sunk costs. The arbitration request would then have been a lever in the negotiation of those costs, if this is what is happening.
Therefore, GG would regain 5% of the 49% owned by FRR for allowing the transfer under the PSA = 2.45%, leaving the split 53.45% with the GG and 46.55% with FRR. I would rather see a small percentage go to the GG than to SH/O, especially if it has facilitated his removal from the BOD.
IMHO the following now applies :-
1) SH/O's liquidating of the asset transfers this 5% to the GG.
2) The fact that a 5% royalty was exchanged for Block 12 could satisfy the legal requirements about servicing the debt.
3) As SH/O has resigned and liquidated the Frontera company that contained the loan notes and the assets, then the Frontera BOD can sign for a loan with Green Capital LLC without SH/O's veto. The loan can then be used to pay off the debt or place the money in Escrow until the case against SH/O has concluded.

Syric - The valuation is as AJW suggests, not for a deal for Block 12, just for deal with the GG and the sunk costs.

AJW - I agree with your point about the valuation, as IMHO FRR will drill the 4 cleaned wells to prove zones 21, 23 and 25 and possibly one co-mingled. I also think that the money from Green Capital LLC will be used to drill a side-track to prove the gas, unless a JV or F/O is agreed with the super majors. I don't think that ZM or SN will sell Block 12 at the lower end of the valuation, but only deal for the whole block if the money is very good and a percentage retained for future dividends. Otherwise, I think that ZM's podcast explanation of different companies with different deals for the various parts is more likely.

Agreement, where the GG gets 51% of the production. The transfer of ALL OF BLOCK 12 in return for a royalty of 5% is another royalty agreement, which would require the approval of the GG. With this in mind now read my post below from Sunday :-
IMHO if a valuation for Block 12 (with what has been proven to date) has been agreed with FRCC and the GG for $8bn, then the 5% figure left in FRCC equates to $400m, which is the value of the sunk costs. Therefore, when SH/O tries to take the 5% the GG take it back and gain the equivalent of the sunk costs. The arbitration request would then have been a lever in the negotiation of those costs, if this is what is happening.
Therefore, GG would regain 5% of the 49% owned by FRR for allowing the transfer under the PSA = 2.45%, leaving the split 53.45% with the GG and 46.55% with FRR. I would rather see a small percentage go to the GG than to SH/O, especially if it has facilitated his removal from the BOD.
IMHO the following now applies :-
1) SH/O's liquidating of the asset transfers this 5% to the GG.
2) The fact that a 5% royalty was exchanged for Block 12 could satisfy the legal requirements about servicing the debt.
3) As SH/O has resigned and liquidated the Frontera company that contained the loan notes and the assets, then the Frontera BOD can sign for a loan with Green Capital LLC without SH/O's veto. The loan can then be used to pay off the debt or place the money in Escrow until the case against SH/O has concluded.

VLV - Not 5% of the asset, but 5% of the royalties. I assume that the 5% royalty was due to legalities. IMHO as SH/O has resigned, then a possible loan from Green Capital LLC could be used to pay off the debt to SH/O or placed in Escrow until the case against SH/O is concluded.

ALL THE ASSET, NOT 95%. The 5% is not 5% of the asset, but a 5% royalty interest and debt relief, which has been exchanged for ALL THE ASSET. See lines 21 - 27 on page 7/21 of the link below :-

https://www.dropbox.com/sh/6lw9qe59pv1dh8e/AADZUU2UqC1uFd72_O8iQA3Va?dl=0&preview=Hopes+Response.pdf

Also look at the timings which are interesting. 14 April Frontera issue proceedings in California, 15 April hearing in Cayman, 17 April enforcement notices issued. What is odd is that we wait until 24 April to amend the summons to include injunctive relief proceedings. These injunctive proceedings are of the utmost importance to FRR and its very existence. I have injuncted the same night/next day in similar circumstances. I’m not an expert on the US legal system but 7 days in the circumstances is a long time. The amended summons for injunctive relief is virtually identical to the original summons filed in the Californian proceedings so not much extra work required there.

My guess is the delay was because they tried to work out a settlement but it appears that hasn’t proved possible. Once negotiations broke down , FRR had no alternative. So although on the face of it it appears that we are far away from resolving this matter the reality maybe that we are closer than people think.

The alternative to Oopsi's theory above is the one suggested by 98kingm @ 07:42 of the transfer of 95% of Block 12 out from FRCC while the injunction wasn't in place.

Thanks for correcting me Zen.

98kingm - Very plausible. The GG would also regain 5% of the 49% owned by FRR for allowing the transfer under the PSA = 2.45%, leaving the split 53.45% with the GG and 46.55% with FRR. I would rather see a small percentage go to the GG than to SH/O, especially if it has facilitated his removal from the BOD.

FRR's lawyers have allowed S/O to entrap themselves by trying to seize FRGC, which was the security for the loan notes, by not urgently applying for the TRO.

I've copied garytrader's post fro the 26th April below :-

Plaintiffs request a ruling on the motion by April 29, 2019. Although Plaintiffs do not appear to have unduly delayed filing either the Complaint or the subsequent motion for a TRO, the circumstances suggest the matter does not warrant expedited treatment on as abbreviated a schedule as Plaintiffs propose.
Accordingly, the parties are directed to meet and confer forthwith to negotiate a briefing schedule in view of the guidance of this order. The parties are encouraged to stipulate to proceed directly to the preliminary injunction stage, with briefing to be complete within the next approximately 10 days to two weeks. In the event such a stipulated briefing schedule is filed, the matter will then be submitted for decision or set for a hearing at the earliest possible time following completion of the briefing in the Court’s discretion.
In the event the parties are unable to reach agreement, Defendants shall file any opposition to the motion for a TRO no later than 5:00 PM on May 2, 2019. The matter will then be submitted for decision or set for hearing in the Court’s discretion.

ZM and SN have protected the shareholders from SH/O attempt to seize the assets by transferring them out of FRGC. Therefore, (and still IMHO) the actions of SH/O have proved why an urgent TRO is necessary and even if the transfer of the assets is unlawful and has to be reversed, the judge would have to grant the TRO. Therefore, the assets would appear to be protected until the result of the trial. If the Caymen's lawsuit wouldn't allow the 'Califronian Discovery' or result in an OOCS, then the Californian trial was inevitable. Furthermore, SH/O's actions are not of a director complying with his Fiduciary Duties and should strengthen FRR's case against SH/O.

I thoughtn this section was interesting in one of Hopes documents…

Hope’s views were entirely motivated by the best interest and long-term success of FRC. All that OMF could ever be legally entitled to obtain is the repayment of its debt as a secured creditor. The allegation that Hope somehow stood to take over FRC and profit beyond that on the basis of a conspiracy, is paranoid, fanciful, and meritless.

Again just my opinion but I think it is FRR which is trying to force a deal down Hope’s throat through litigation and accumulated evidence of malpractice. I believe FRR want him to accept a payment which is significantly below his par value of the CLNs which I reckon have grown in value from $13.5m to $20m. Remember he only paid $4.5m for the $13.5m par value for the CLNs and I reckon FRR may have offered $10m to retire his $20m - here he is not budging. Also everyone should remember that a creditor legally cannot profit from sale of an asset greater than his liability, any surplus proceeds in excess of the creditor liability has to be returned to the company. But we also know that assets can be ‘fire’ sold at much lower value than market fair value.

Anyway, status in the Cayman is not clear. I believe the injunction is still in place and the case will now be heard at the Appeals Court at the next hearing, may be late July or early August, by which time we may have a preliminary judgment in Cali. Perhaps the April listing was missed as the two parties were seen to be engaged in a settlement.

Also another observation but Outrider actively targets companies that are using SEDA finance from the likes of YA. Kickmuck’s last post and specific reference to Troy is becoming more and more important. I wonder if Troy did receive many Xmas cards as KM suggested, and I think he did because after January hearing with Judge Kawaley, something changed that resulted him scolding OMF’s legal team by accusing them of ‘sailing close to the wind’.

We are at the mercy of our legal team and the Judges, so there is little we can do but watch and pray. But I noticed on the LSE BB that many have lost their heads and now is not the time. Let’s stay united. I also don’t think Zaza expected this protracted situation but it seems Hope is keen to play Russian Roulette.

Finally, I have also seen the unsigned Orders to grant temporary relief injections. It has been suggested that FRR legal team may have prepared these; bollx. Most likely those have been prepared by the Clerk of the Court awaiting Judge’s sign off.

JMO

Piscean - I agree and if he ends up in a penitentiary, it will be even better. We all know what Steven Seagal would say about that!

LordLash - IMHO the shorters are mere pawns, cannon fodder, to be discarded at a whim by the unscrupulous vultures in the markets.