Member Info for Madpunter

Posted by bugsy-b @ 09:44 and 10: 22 :-

Changing the subject away from the internal squabbling for a moment, I have noticed of late that auctions of natural gas in Georgia are becoming far more frequent..
Go back a year or so, and we can see gas auctions once maybe twice a year, and always for 2 million cubic..

The Georgian side of GOGC has recently published yet another gas auction.. 3 mill cubic metres from Ninotsminda.. add to this the auction from only a month or two back, plus the huge auction of 10 lots of gas a couple of months back and we see gas extraction in Georgia is starting to rocket..

I don’t know exactly what technology they’re using out there, put it would appear that the Georgian geology enigma which has persisted for years has finally been smashed.. making block 12 an even more valuable piece of hydrocarbon real estate..

https://www.gogc.ge/ka/tenders/any/1/
scroll to May 17th..

Posted by Dulwichman @ 14:14 :-

Not posted anything of and consequence for a while now as in principle have been sitting on the side lines as nothing of any real value I can realistically comment on during the court cases. I suspect many LTH's are in a similar position.
I will however make comment on something which is easy to forget whilst court cases go on. That being the subject of Geo- Politics. The oil and now mainly gas industries are really driven by the geo political situations and BP are one of if not the best at this game and we are luckily I hope still having them involved. The importance of this O and G field which we understand is of commercial value for-fills the stated needs and desire of both the USA and Europe both in actual commodities ( Europe wants an independent gas supply from the Russian supply side and the USA wants a stable area under influence of the west in General and as much USA leaning as possible) this is an area where West meets West and also China. Having Frr as a basically USA leaning Company who appear to be able to influence and perhaps be influenced by the West and more specifically the Atlantic Council etc is of great value in it self. ( Hope and company are an unknown quantity in this area) Obviously no Government is going to influence a Court -well not publicly anyway!

I accept that this is part of the bigger picture but just a gentle reminder which is easily forgotten in all this bru ha ha and is perhaps more for the end game but our position will be under close Scrutiny from Governments big oil and gas and whilst at least publicly they can not interfere, they will want this mess all cleared up ( time will not be an issue for them at the moment) but to have a result that will help for fill national and international desires on the geopolitical stage. Discussed much in the past so apologise to the LTH's for repetition

Posted by Devex on ii :-
Have to agree with you SB - the best thing we can all do is simply let the court case run it’s course. On the outcome individuals can then decide what they do next - as individuals or collectively. And I still hope that we will see a positive outcome - with clarity on ownership, debt and future financing.

Regarding Cairn/Jo Turner and the October developments it was Hope who contacted Jo in the first instance - stating that a default RNS should be produced within 24 hours. This was a complete surprise to him and it was Jo who then contacted the company to get guidance regarding next steps - and the rest is largely history. From the documents seen and the conversations I have had I cannot see that he could have done anything differently.

Regarding the resignation it is also difficult to see what Cairn could have done differently - and I think most of us would agree that the suspension/delist was actually a timely outcome - given how events have unfolded. However I also suspect that the Darwin deal required a listed stock status - so a Catch 22 emerged.

Regarding the 2016/17 RNSs I agree that trying to act on these is not only dangerously premature but also entirely misguided. Cairn would inevitably blame the company - and at this point the best way to protect our investments - in my view - is to hope the Company wins through on the court process. Any other interference here simply threatens the likely outcome.

And finally - on a technical point - I would argue that the real culprit regarding the disclosure issue is PWC . PWC audited the accounts - and to do that they should not only second check the numbers but also examine and validate any material supporting documents. Any statement in the accounts should be checked and have recorded against it the source evidence. There is a very well developed process for doing this and Cairn - and indeed any other Nomad - would I suggest expect the auditor to have carried out these checks. Which is why an audit house has considerably more resource than any nominated adviser.

As I said - the best thing we can do is let the process run through.

Posted by Symore_Bottoms on ii :-
Jaytee41 - there is a strong possibility that the NOMAD could be dragged in to this Court Case as he was referenced in the emails between Hope and other BoD; inference being that there was regular contact between Hope and Jo Turner and this could be the basis for the ‘illegal interference’, ultimately resulting in our delisting.

Also interesting to read over on the LSE BB, there is one particular poster who is claiming that he is [or will be] suing the NOMAD for signing off a RNS which was factually [and materially] incorrect on the restructuring of the CLNs back in late 2016. He was encouraging others to explore and do the same. Makes you wonder, why now and why the sudden attack on the NOMAD? Surely this can wait until we have a definitive answer on the litigation.

In any event, would be handy if those with good relations with Jo could try to get some feedback. But attacking the NOMAD now when we could be entering a Jury-trial seems tactical, to put him under pressure or on the back foot.

I will add though [for balance sake] that there were many, including me, that thought the CLNs were accruing the interest and not cash payment, which influenced our investing decisions. If many were aware of this fact, we would have taken difference actions.

But, honestly, who is really to blame for this ambiguity, the Board [including Hope who had a fiduciary duty to inform its shareholders of this arrangement] or the NOMAD? Hope is to blame as much as the others for concealing this information.

Probably best to wait until the court case is finished and then review our options. Hopefully, we will not need to go down this road?

Part 2

This is a war to the end NOW, either it’s bye bye Outrider or bye bye FRR, no middle ground. Shame they couldn’t see a win-win situation. But what is clear from the submissions is that Hope was cheer leading for FRR to fail so he could exercise his plan.

JMO

Posted by Symore_Bottoms on ii :-

I think it is important to note that FRR has always been in a precarious financial position and this is not a new phenomenon that Hope’s lawyers are trying to portray now. As an early O&G junior explorer, this is the modus operandi not just for FRR but for nearly all small oil companies. So for over 20-yrs, these incumbent long term Directors have balanced the books by honouring their fidicuary duties to employees and creditors (I can’t recall any legal action been brought against them, so great track record). In fact, historically speaking, they have personally financed the company when there was no other finance option available, which was subsequently converted to ordinary equity at a premium. How much Director RPNs converted? $26m. This is Directors level of commitment to their stakeholders. Then we know that Zaza offered a personal loan of $5m, but what did Hope offer? Sweet FA. Infact, Hope lawyers go back to claiming that Hopes actions were to protect Outrider and other creditors and therefore fulfilling his fiduciary duties. And this is going to be crux of the legal argument. Well, that cant be true, because if it was, he would have started raising these issues as soon as became the Director of FRR back in Feb 2017 and not from April last year. There are clear cut legal cases where a Director should excuse himself from Board discussions when he is conflicted, not use his veto power to protect his own position. This vulture is now arguing that he vetoed the proposals to protect creditors but did he then offer superior terms for his own $2m loan?

As far as Judge Kawaley’s comments are concerned on the financial state of FRR (and this shows how little he understands the early explorer industry), FRR has been in this financial state for over 20-yrs without any creditor not getting paid. Infact you could argue that over the 18months, FRR made more progress with new equity raised, progressing drilling operations and securing discussions with international heavyweights. I can also name at least half a dozen AIM O&G companies that have a similar financial position to FRR. And what about the Regulators such LSE who continually monitor these small companies.

Anyway, I think this is why FRR want a Jury trial because when the facts are heard, and Hope is exposed for the vulture that he is and how he has taken advantage of the opportunistic purchase of heavily discounted company debt. When the facts are finally presented, then you could see his motivations which resulted in him not honouring his fiduciary duties.

Will the preliminary injunction be granted? I don’t know. It will depend on the hearing on the 6th June; it will all come down to the persuasion of the argument from the respective lawyers. But as it is FRR who has brought this action, they should be given their day in the court I believe.

This is a war to the end NOW, either it’s bye bye Outrider or bye bye FRR, no middle ground. Shame they co

Perhaps after reading Taffy's posts other posters will refrain from the queries 'Why didn't we pay the $2m' or 'Why didn't we give SH/O shares?' It is obvious to anyone reading the aforementioned posts that SN and ZM have been operating with both their hands tied behind their backs. Also, they've had to deal with the invasion of Georgia; the drop in the POO; the difficult geology of Block 12 (the Permian in Texas took decades to crack); the arbitration with the GG; plus the time and money constraints of proving up a vast resource. Furthermore, this has all been achieved with 'strong commitment to ensuring the health and safety of our employees and contractors; responsible stewardship of the natural environment; and recognition of the importance of the communities in which we operate.'
https://fronteraresources.com/csr/#environmental
IMHO this doesn't look like a badly run company that some posters have referred on here previously.

third parties, and are in the process of securing a debt offering of $150 million to 2 ensure the stability and future of the Plaintiffs. These opportunities will evaporate 3 if Defendants succeed in liquidating and selling off Plaintiffs' assets before this 4 Court can adjudicate the case on its merits. 5 45. Defendants clearly intend to liquidate, dismantle, and fundamentally 6 reshape Plaintiffs' companies, disrupting its relationships with the countries of 7 Georgia, Moldova and the Ukraine, and impacting Plaintiffs' contribution of 8 natural resources to the worldwide supply. Defendants' efforts to protect their own 9 investment at any cost will have lasting consequences for many innocent third 10 parties employed by Plaintiffs' various companies, impacting Plaintiffs' many 11 vendors, agents, field workers, rig operators, administrative workers and on the 12 people of those emerging and developing countries as a whole. The country of 13 Georgia has a population of only 4 million people. Plaintiffs' operation in that 14 country for 23 years has helped bring it into the 21st-century. If Mr. Hope is 15 successful in liquidating Plaintiffs or selling it off in the result will have lasting 16 impacts on those countries, their infrastructure and their people, as the oil and gas 17 production Frontera currently provides the Republic of Georgia is an economic 18 boon to the economy-while also supplying a much-needed resource and reducing 19 worldwide reliance on less stable nations for oil and gas supplies.

refused, asserting that Plaintiffs "fully stand by and re-affirm their claims as made 2 in the" Cayman Islands Action, and that Plaintiffs reserved their right to re-file 3 such claims and any related claims. The Cayman Defendants quickly capitulated, 4 consenting to Plaintiffs' discontinuance being without prejudice. 5 40. On April 15, 2019, the Court in the Cayman Islands Action executed 6 the "Consent Order," which was drafted jointly by, and signed by, counsel for both 7 Plaintiffs and the Cayman Defendants, and which confirmed that the action was 8 discontinued without prejudice. 9 41. Plaintiffs negotiated to voluntarily dismiss the Cayman Islands Action 10 without prejudice because voluntary dismissal was preferable to continuing with 11 the complex and costly requirements of the Cayman court system. In particular, 12 Plaintiffs were being forced to participate in a special session of the Court of 13 Appeal on May 17, 2019 in London, England despite their request for an extension 14 due to scheduling conflicts. Based on their experience litigating over several 15 months in the Caymans, Plaintiffs also believed that it was more practical and cost-16 effective to litigate in the United States where all of the witnesses and documents 1 7 are located. 18 42. There was never an "unfavorable ruling" in the Cayman Islands 19 Action that influenced Plaintiffs' decision to voluntarily dismiss the Cayman 20 Action without prejudice. 21 43. In the several weeks that this action has been pending before the 22 Court, Defendants have instructed their agents to take the following steps: firing 23 the FRCC Board, replacing that Board with a new board of designees controlled by 24 Mr. Hope, commencing "voluntary" liquidation, and tendering Mr. Hope's 25 resignation so that he can pursue his own interests unburdened by any inconvenient 26 fiduciary duties in the future. 27 44. While Mr. Hope has been taking these steps, the existing management 28 team has been diligently pursuing opportunities to secure new investment from

the operations of its subsidiaries. Specifically, section 7.2 of the Replacement Note 2 Agreement provides, in pertinent part: 3 4 5 6 7 8 9 10 11 (a) The Company shall not, and shall not permit any Company Subsidiary to, Incur, directly or indirectly, any Indebtedness; provided however, that the Company and its Company Subsidiaries shall be entitled to Incur Indebtedness if, on the date of such Incurrence and after giving effect thereto on a pro forma basis, the Consolidated Coverage Ratio exceeds 2.0 to 1.0. (b) In addition to the foregoing paragraph (a), so long as no Default has occurred and is continuing, the Company and its Company Subsidiaries shall be entitled to Incur any or all Permitted Indebtedness or Permitted Noteholder Indebtedness. A true and correct copy of the Replacement Note Agreement is attached hereto as 12 Exhibit "C." 13 3 7. Permitted Indebtedness is defined, pertinent part, in Schedule 1 of the 14 Replacement Note Agreement as: 15 16 17 18 19 (1) Indebtedness of up to $200 million Incurred pursuant to a Credit Facility, with interest not to exceed LIBOR plus 1500 basis points, provided that any such indebtedness may only be incurred with the unanimous written consent of the members of the board of directors of FRC, and further provided that, absent such unanimous consent of the board of directors of FRC, any transaction incurring such indebtedness shall be void .... 20 (See Exh. C, Schedule 1 ). 21 38. Plaintiffs previously pursued an action in the Cayman Islands (the 22 "Cayman Islands Action") against Mr. Hope and Outrider Master Fund, L.P., the 23 Cayman Islands entity that he controls, (collectively, the "Cayman Defendants"). 24 39. On Friday, April 12, 2019, Plaintiffs' Cayman Islands counsel 25 informed counsel for the Cayman Defendants that Plaintiffs intended to voluntarily 26 "discontinue" (the Cayman Islands equivalent of dismissing without prejudice) the 27 Cayman Islands Action. Counsel for the Cayman Defendants attempted to get 28 Plaintiffs to agree to dismiss the Cayman Islands Action with prejudice. Plaintiffs

declined to disclose its confidential, proprietary and trade secret information to 2 Lothian. 3 34. In July 2016, it became apparent that FRH would be unable to pay off 4 the New Notes when they matured on August 1, 2016. Consequently, in July 2016 5 FRH filed a petition in bankruptcy under chapter 7 of the United States Bankruptcy 6 Code (11 U.S.C. §§ 101 et seq.) in the United States Bankruptcy Court for the 7 Southern District of Texas, Galveston Division, Case No. 16-80220. FRC then 8 commenced an adversary proceeding (Adversary No. 16-08008) against Mr. Hope, 9 OML, OMF, and others alleging tortious interference with contract, 1 O misappropriation of trade secrets, and fraud, arising out of the inducement of FRC 11 to supply confidential, proprietary and trade secret information to MND. 12 35. The parties agreed to mediate the case and reached a settlement. The 13 salient points of the settlement, relevant to this action, were: 14 • FRC agreed that one of its subsidiaries, Frontera International Corporation 15 ("FIC"), would issue $22,910,094 in notes to OMF to replace the New 16 Notes issued by FRH (the "Replacement Notes"). The amount of the 17 Replacement Notes reflected the amounts owed to OMF as of August 1, 18 2016. 19 • FRC agreed that repayment of the Replacement Notes would be secured by 20 the stock of FRCC. 21 • FRC agreed that as long as the Replacement Notes remained outstanding, 22 OML could nominate an independent director to the Board of Directors of 23 FRC. 24 A true and correct copy of the Mediation Settlement Agreement is attached hereto 25 as Exhibit "B." 26 36. The Replacement Note Agreement negotiated subsequent to the 27 Mediation Settlement Agreement restricted the ability of FIC to incur debt to fund

Notes. OML refused to consider repeated proposals by FRC to repurchase or 2 restructure the debt on terms that were exceptionally lucrative to OML. 3 31. In June 2016, OML introduced yet another entity to FRC, Lothian 4 Partners ("Lothian"), which OML represented was interested in investing in FRC. 5 Consistent with its prior conduct in concert with MND, OML demanded that FRC 6 provide Lothian access to its confidential information in order to evaluate a 7 potential investment by Lothian in FRC. At that time, FRC, through its financial 8 advisors at Rothschild & Co., was already engaged in good faith efforts to 9 reacquire or restructure its debt. Notwithstanding FRC's past experience with 10 OML, Rothschild & Co. responded to Lothian's overture in good faith. 11 32. During an introductory conversation between Lothian and Rothschild 12 & Co., Rothschild & Co. requested basic information regarding Lothian's identity, 13 the sources of the funds it proposed to invest, the nature of its proposed 14 investment, its past experience in similar investments, and related basic 15 information that any oil and gas exploration company would reasonably request 16 prior to considering disclosures of confidential information to a third party. This 17 information was especially crucial, in light of FRC's past experience with OML, 18 and its fraudulent attempt to present MND as a "Trojan horse" investor to obtain 19 FRC' s trade secrets and confidential information in aid of a hostile takeover bid. 20 33. Despite numerous requests over a period of weeks, Lothian 21 inexplicably refused to provide this basic information. Instead, OML and Lothian 22 jointly engaged in a campaign to pressure FRC through a series of increasingly 23 hostile telephone calls and emails that implied that FRC had fiduciary or other 24 legal duties to open its books and records to an unknown third party with 25 undisclosed intentions towards it. Finally, in mid-July 2016, following repeated 26 refusals by Lothian to reveal the nature of its intended investments, the identity of 27 its principals, the sources of its funds, and other such basic information, FRC

27. OML actively participated in inducing FRC to enter into the 2 confidentiality agreement and share its confidential information and trade secrets 3 on the basis of misrepresentations regarding MND' s intentions, and pushed FRC to 4 provide ever greater amounts of information to MND pursuant to the terms of that 5 agreement. OML took these steps despite knowing that MND was using that 6 information for purposes that were wholly inconsistent with the farm-in agreement 7 that OML and MND had proposed as a basis for soliciting the confidentiality 8 agreement with FRC, and that were in fact inimical to the best interests of FRC and 9 its shareholders. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 28. Unaware that its plans had been revealed to FRC, MND, with OMLs support, continued its misrepresentations regarding its intentions and attempted to garner additional confidential and trade secret information from FRC. 29. For its part, FRC initiated an effort to obtain financing for a true farm-in investment from another entity and, in April 2014, FRC announced a deal with V arange Exploration, Ltd., at which time MND and OML abandoned their efforts. OML and MND's actions nevertheless caused FRC extensive actual damages, by interfering with a then-ongoing process to identify farm-in partners to help finance its development of its mineral interests in the Republic of Georgia, and by causing the failure of advanced, confidential negotiations towards such an investment with a third party. 30. During the period between mid-2015 and June 2016, in light ofwell-known adverse conditions in the oil and gas industry, FRC repeatedly sought to engage OML in negotiations to repurchase its debt on terms that, while reflecting a discount to the face value of the New Notes, would have provided OML with substantial returns on its initial $4 million investment. OML rejected every such overture, despite its knowledge that the New Notes might not be capable of repayment in light of market conditions and the unsecured nature of the New

requested information and seeking information and insights into FRC' s negotiation 2 posture. 3 23. In late February 2014, having received no specific proposals from 4 MND, FRC proposed that MND enter into a farm-in agreement whereby MND 5 would provide approximately $31 million in funding for a multi-well drilling 6 project in exchange for a share of working interest in the Taribani Field. 7 24. MND's CEO, Mr. Cociancig, responded the following day that MND 8 would begin the board recommendation and approval process in connection with 9 that transaction. However, unbeknownst to FRC, MND had no intention of 10 entering into a farm-in agreement. 11 25. On February 27, 2014, FRC learned, through an email that MND 12 inadvertently sent to FRC's financial advisors at Rothschild & Co., that MND's 13 board of directors had approved a resolution to acquire FRC itself with the support 14 of VTB Bank, a Russia-based banking group. Mr. Hope was a recipient of that 15 email. In short, MND had misrepresented its intentions in order to induce FRC to 16 enter into the confidentiality agreement, and then used FRC 's confidential 17 information and trade secrets to evaluate and pursue a hostile takeover of the 18 company. 19 26. It was immediately clear that MND had pursued this course of 20 conduct with OML' s full knowledge, consent, encouragement, and participation. 21 OML brought MND to the table as a potential deal partner for FRC, took an active 22 and continual interest in the negotiation process, sought information from FRC 23 with respect to its intentions and negotiation positions, and repeatedly sought to 24 manufacture an impression of urgency with respect to completing that process. 25 OML's complicity was revealed by the fact that OML's principal, Mr. Hope, was 26 included in the otherwise internal MND email that revealed MND' s board approval 27 of a plan to pursue a hostile takeover ofFRC.

19. Following receipt of MND's bona fides, including information about 2 the company, its sources of capital, and further information regarding the nature of 3 its proposed farm-in, FRC agreed to enter into a November 7, 2013 Confidentiality 4 Agreement with MND permitting it to perform due diligence in connection with 5 the proposal. Under the terms of the Confidentiality Agreement, MND agreed that 6 it would use FRC' s confidential information only in connection with its evaluation 7 of the potential farm-in transaction described in the agreement, and that it would 8 not disclose FRC' s confidential information to any person other than its own or an 9 affiliate' s officers and directors, or its professional advisors, with a clear need to 10 access the information in connection with evaluating the proposed transaction. 11 20. In reliance on MND's confidentiality agreements, during the months 12 that followed between November 2013 and February 2014, FRC made extensive 13 disclosures to MND which included much of its most sensitive and protected 14 confidential and trade secret information. This information included, without 15 limitation, commercial, drilling, completion, and production logs for numerous 16 wells; technical, geological, and geophysical information related to its mineral 17 reserves derived at great expense through seismic and drilling core analyses; well 18 bore studies; field studies analyzing production results, and characteristics of its 19 wells; authorizations for expenditures related to drilling, recompletion, and other 20 projects; reservoir descriptions; historical production data; project economics and 21 assumptions; schematics of gathering capabilities; economic modeling data for 22 future projects, and myriad other data developed by FRC. 23 21. Throughout this period, FRC continually pressed MND to provide it 24 with a specific proposal. MND delayed providing any such specifics, but 25 nevertheless made ever more detailed and extensive demands for information. 26 22. Despite the fact that OML was neither a signatory to the 27 Confidentiality Agreement, nor a direct participant in negotiations with MND, it 28 continually sought to insert itself into that process by pressing FRC to provide the

and his agents informed FRC that those notes were acquired at a steeply discounted 2 price of approximately $4 million. 3 14. Since then, OML and its founder, Mr. Hope, have aggressively sought 4 to leverage that discounted acquisition of debt into a controlling position over 5 FRC, and the Frontera entities, and the valuable oil and gas rights throughout their 6 operations, to the detriment of FRC' s shareholders and other creditors of FRC and 7 the Frontera entities. 8 15. After acquiring the New Notes, Mr. Hope engaged in regular contact 9 with FRC and its officers and directors, including FRC' s then vice president for 1 O investor relations/business development, Liz Williamson, and me. During mid-11 2013, Mr. Hope introduced to FRC parties presented as potential investors or deal 12 partners. On one such occasion, in October 2013, Mr. Hope sent me an emailed 13 introduction of Bernhard Cociancig, the CEO of a Czeck oil and gas exploration 14 and production company known as MND. Mr. Hope represented that the purpose 15 of the introduction was to facilitate MND's exploration of a potential farm-in 16 investment opportunity through which MND hoped to purchase an interest in 17 mineral rights related to the Taribani Field Complex of Block 12 in the Kakheti 18 region of Georgia. 19 16. Mr. Hope further sought to insert himself and OML at the center of 20 the negotiation process for that transaction, stating that, as the principal of a 21 significant creditor, he believed he could add value to the negotiation process. 22 17. Despite having no direct apparent interest in these negotiations, nor an 23 expertise in the oil and gas business, Mr. Hope thereafter engaged in a series of 24 communications with FRC regarding MND's proposal, simultaneously attempting 25 to direct the timing and content of FRC' s responses to MND and manufacturing an 26 artificial atmosphere of urgency surrounding those negotiations. 27 18. On or about November 1, 2013, FRC met with several MND 28 representatives in Vienna, Austria. -4

evidence that Defendants are far from the disinterested lenders they have portrayed 2 themselves to be. 3 9. FRC and its subsidiaries ( collectively "Frontera"), comprise an 4 independent international oil and gas exploration and production company whose 5 strategy is to identify and operate in emerging markets in Eastern Europe around 6 the Black Sea, and is based in Houston, Texas. 7 10. On June 28, 2011, FRC announced an offer to holders of two series of 8 existing notes issued by an FRC subsidiary, FRH, due in 2012 and 2013, proposing 9 to restructure those debt obligations pursuant to the terms of an accompanying 10 Note Purchase Agreement (the "Agreement") and for other consideration set forth 11 in that Agreement. Specifically, the offer was made to the holders of 10% 12 Convertible Notes due in 2012, and holders of 10% Convertible Notes due in 2013 13 ( collectively, the "Old Notes"). 14 11. Under the terms of the offer, holders of the Old Notes would receive 15 at their option: (1) ordinary shares ofFRC's common stock; (2) newly issued, 10% 16 convertible notes with principal amounts of $1,000, maturing on August 1, 2016 17 (the "New Notes"), which were to be unsecured and payable by FRH; or (3) a 18 combination of PRC shares and the New Notes. 19 12. The Agreement stipulated that the New Notes would constitute a 20 senior, unsecured obligation of FRH, which would be solely responsible for 21 payment of principal and interest at an annual rate of 10%, unless either the 22 Noteholders elected to convert them to FRC shares, or the New Notes were 23 redeemed or repurchased at an earlier date. 24 13. Some of the New Notes were purchased by Defendant Outrider 25 Management, LLC ("OML"), through its subsidiary, OMF, from an original 26 subscriber to the New Notes. Specifically, between late 2011 and early 2012, OML 27 acquired New Notes with a face value of approximately $14.7 million. Mr. Hope 28 -3

1. My name is Steve C. Nicandros. I am over the age of eighteen (18) 2 and competent to give this Second Declaration. I am Chairman of the Board of 3 Directors of Plaintiff Frontera Resources Corporation, and I have personal 4 knowledge of all matters set forth herein. This Second Declaration is given for use 5 in connection with Plaintiffs' Motion for Preliminary Injunction, and for all other 6 purposes permitted by law. 7 2. In 2011 and 2012 Defendant Outrider Management, LLC ("OML"), 8 through Outrider Master Fund, L.P. ("OMF"), acquired notes with a face value of 9 approximately $14.7 million for only $4 million. 10 3. During 2013 and 2014 OML and Mr. Hope pressured FRC to pursue 11 investment in FRC by a Czeck company that, in cooperation with OML,. sought a 12 hostile takeover of FRC rather than an investment stake. OML tried a similar 13 takeover effort with a different entity in 2016. 14 4. OML and Mr. Hope's interference with FRC's efforts to obtain 15 investment funding forced FRH to file a chapter 7 bankruptcy case in July 2016. 16 5. FRC filed an adversary complaint against Mr. Hope, OML, OMF, and 17 others in connection with FRH' s bankruptcy case seeking damages for tortious 18 interference with contract, misappropriation of trade secrets, and fraud. 19 6. FRC mediated a settlement of the adversary proceeding that provided 20 Mr. Hope and OML the ability to appoint an "independent" director ofFRC. 21 7. Mr. Hope appointed himself as the "independent" director, and 22 represented to me and others at FRC that he would serve in an independent 23 manner. Nonetheless, he has unabashedly been acting in the interests OML only in 24 order to choke off funding for FRC and its subsidiaries, appoint himself as Chief 25 Restructuring Office, and force a liquidation of all assets. 26 8. Attached hereto as Exhibit "A" are Board minutes and emails from 27 April 23-25, 2018 that are representative of Mr. Hope's conduct, and provide

The following 11 posts were posted by Taffy this morning.

m: Giorgi Kalandarishvili Monday, November 12, 2018 3:32 AM Sent: To: Levan Bakhutashvili Subject: FW: Term Sheet From: Stephen Hope [mailto:smh@outridermanagement.com] Sent: Tuesday, September 25, 2018 09:00 To: Giorgi Kalandarishvili Subject: RE: Term Sheet Oh, and as part of this I am willing to waive the 8% step-up on my notes that was triggered in 1H18 and going forward. From: Stephen Hope Sent: Tuesday, September 25, 2018 6:54 AM To: 'Giorgi Kalandarishvili' Subject: RE: Term Sheet Hi Giorgi, I would be willing to do the following: A) Receive my coupon due September 30 (presumably in stock). B) Subject to the raising of at least $5mm in equity through new cash subscriptions before December 31, conversion of up to 50% (at the company1s option) of my debt into equity at that same price and time. C) A lockup period on the shares issued in B of 3 months during which the company can have the ability to repurchase the shares at a 25% premium to the issuance price. I am open to looking at longer lockup periods with higher repurchase premiums. My thinking is as follows: 1. I understand the company needs to reduce its debt burden. 2. Without the raising of new capital alongside the conversion, the company1s problem is not being solved. 3. I am entitled to recover the face amount of my claim, or have a reasonable expectation that such is the case. 4. The company and its shareholders might find it unappealing to allow a large equity conversion with an uncapped upside when the company may find its value appreciating dramatically in the next several months. 5. This achieves substantial deleveraging of the company (leaving it with only ~$15mm of financial debt) and signifies a future path to resolution of the remaining debt if the company succeeds in becoming self-sustaining but has not generated sufficient cash flow to repay the debt by August 2020. Thank you. I will also share this proposal with the board. Best, Steve 1