Member Info for Madpunter

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.

Money
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.

Posted by bugsy-b @ 14:24 :-

Law of Georgia Oil and gas
A few interesting parts to this Georgian oil & Gas law which I feel gives us some protection against "Vultures" attempting to seize our assets....

Article 22. Transfer of rights and duties to another person by the investor...
1. An investor has the right to transfer his rights and obligations under the general license of the Oil and Gas Resources to the entirely or partially transferred company without prior agreement with the Agency. Yep, We've done that..

Article 25 9 . Transfer of the license to another person
2. On the basis of a transaction between the owner of a license holder and the third party, the license holder has the right to partially or partially refuse to license the activity in favor of this person... So if anybody did succeed in grabbing the assets, we can revoke the license...

Article 25 10 . Rights and obligations of the license holder's owner
1. The license holder of the activity shall have the right: G) not to allow free movement of foreigners on the area of ??activity, as well as the license holder's equipment, equipment, communications and other means of action, unless otherwise provided by the Georgian legislation and activity license;

Article 30. Discussion of Disputable Issues
1. The dispute arising between the Parties of the Agreement, especially if the dispute relates to land or other real estate, shall be considered ONLY BY THE COURT OF GEORGIA, by the location of the property.

https://matsne.gov.ge/ka/document/view/18424?publication=29

Posted by StarRage @ 11:27 :-

Can't see the TRO document in dropbox so here's a copy for anyone interested as I've not seen this shared previously.

https://1drv.ms/b/s!Ak7gVwQ3mttllQ-WMskeeJUuy32S

posted by Devex on ii :-

Yet another set of twists - with some questions answered and a load more created. For what it is worth my key observations on the story thus far are as follows:

despite the financial constraints the October actions were not triggered by an inability to pay Hope - more a clear decision to lance a boil that was always going to get worse with every passing day. The resultant course of events of course will not have been planned but I am pretty sure the risks would have been known.

I think Durham was intended as an Outrider buy out opportunity. It was the de-list that scuppered it as much as anything - I am sure that the requirement for trade-able shares would have been a pre-requisite. Whether Durham is dead or on the back burner remains to be seen.

I am equally sure that behind the scenes FRR are receiving operational help and advice - most likely from BP and BH. And probably from other sources as well.

The transfer of assets will have been completed with the help of legal teams and expert advice. Risks yes - but calculated.

So where will it all go? Who knows - but lets assume that FRR get the TRO. That in itself does 2 things. First it demonstrates some sympathy for the FRR argument, and second it brings a trial by jury one step closer. And as ToT says - with a lawyer who is already using the emotive arguments that will sway the minds of any lay jury. However far apart the two sides may be Hope would be an imbecile to risk this route - he and Outrider would incur a significant risk of total oblivion. I do not believe they will take this risk even if the whole thing goes right up to the wire

Regarding YA I believe they will be paid come what may (or possibly renegotiated - remeber they clearly have some sort of silver bullet here). The FRR argument is a conspiracy to bring the company down - they will not want any risk of the default argument being reinforced.

And finally the $150 million? This surely must be tangible - the judge is very likely to ask to see the evidence. So it could be Green Capital, Durham or even both. But equally it could be supported by sources close to BP and BH.

This very small BoD, of this very small company, is yet again going to extraordinary lengths to protect it’s interests. I simply do not believe that this very small BoD is acting on its own in this quest (and if in doubt just ask yourself why would a “super lawyer” - an up and coming star of the Californian legal scene - take on this sort of case?)

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.

Posted by daniel1son @ 07:40 and 07:52 :-

Empire Strikes Back

The above reference will make sense when you read the doc.

However, if you thought Hopes lawyers made a good case, wait until you see our rebuttal.

Remember, the best lawyers, spin the most compelling cases (both sides).

Anyway, some good news for us all to chew on, you know the $60m Durham finance deal? That's chump change now.

Lets start getting our geads around a $150m debt facility.

Now, I think it's safe to say we're producing, and producing well or we wouldnt be in these conversations, however, the TRO looks key!

https://www.dropbox.com/sh/6lw9qe59pv1dh8e/AADZUU2UqC1uFd72_O8iQA3Va?dl=0

X2 new docs: FRR response - Empire Strikes Back and SN response

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.

Posted by daniel1son @ 10:29 :-

https://www.dropbox.com/sh/6lw9qe59pv1dh8e/AADZUU2UqC1uFd72_O8iQA3Va?dl=0

Uploaded as 'Expedite TRO'

Hope is finally, no longer a Director at FRR after resigning last week.

FRR are pushing for an expedited TRO and Discovery phase, due to Hope moving forwards with 'enforcement'.

Expected we'd receive something today, may still happen, if not, keep your eyes peeled...this is moving at a rapid rate of knots!

Posted by garytrader @ 19:18, 19:25, 19:33 and 19:39 :-

I’m not sure the asset has actually been moved, more that FRGC has signed a farm out agreement to give over 95% of the production rights/operating rights etc to a different frontera company.

What this means is essentially this new frontera company will effectively control the block and make all of the operational decisions etc and keep 95% of the revenue.

Very clever really, if it works.

And I’m sure in that farm our agreement there are all sorts of horrible clauses that hope would hate.

Quite funny really hope will actually own all of block 12, but he won’t be able to really do anything with it

And just to add to this.

The guys on ADVFN screaming this agreement is illegal etc etc, I say how so?

Almost all of outriders security rights focus around debt, and crucially the where the debt is secured. I have personally not seen anything other than preventing subordinated debt in those documents. A farm our agreement is not debt.

If the debt was secured at FRC level this farm our agreement would be pointless, Hope wanted to secure the debt at the closest level to the asset as possible which makes sense, however this may now come back to haunt him.

The shares in this company that are publicly traded are at FRC level.

I’m assuming frontera have made some kind of new company which is owned by FRC, this new organisation has a farm kit agreement with FRGC, a subsidiary company that it appears hope may now control( and this company is what block 12 sits in)

As I said I would assume that the farm our agreement has all sorts of clauses in it which prevent the agreement being terminated. Obviously hope will want to terminate this agreement and it will probably result in some kind of legal action under a new case

Posted by Madpuntwer @ 17:59 :-

AussieB - I have just read the court papers in the dropbox and I can't find any reference in the court papers about 5% of Block 12 being left in FRCC. The only mention of 5% is a royalty interest and SH/O states that ALL OF FRGC'S OIL AND GAS ASSETS. See P7/21 lines 21-27 of Hopes Response in the link below :-

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

Therefore, the pevious posts about transfering 95% of Block 12 would appear to be wrong. I hadn't read all the court papers and there were many posts about the 95% transfer, so I had wrongly assumed it to be correct.

Summarizing the posts by Madpunter @ 00:26 and 21:15 :-
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.

Posted by 98kingm @ 07:42 :-

The theory that I have provided is based on what I have read on this board. I have not read all of the court documents, so this is just a theory and I could be wrong. As for the legality of transferring the asset, from what I have ready from SH’S statement this was approved on the 13th of April. This would mean that they are now in a situation where they have already approved the transfer of the asset, and need they need to injunction lifting.

Therefore, this was one of the main reasons why they moved the court case to California. If I am not mistake, the court case concluded in the caymans on the 15 April(2 days after the approval of transferring the asset), which would also mean the injunction was lifted(although they applied for court action in California on the 14th, and I don’t know if you can transfer an asset once proceeding have started). However, just say for argument sake that you can, as there’s is no order that is preventing either side from conducting business as usual.

As they already had the approval on all sides to transfer the asset and due to the injunction being removed on the 15th, they then transferred the asset on the 16th(the day before Maples enforcement notice). Once again, as I have said this is all just a theory from reading this board, so I could be totally wrong!

Posted by Zeninvestor @ 06:58 :-

I hope you are right MadP. One small correction: the assets appear to have been moved out of FRCC and into FRGC. Easy to get confused with all these subsidiary companies !

Thanks for correcting me Zen.

Posted by 98kingm on Sat 4th May :-

Hi All,

I don’t post on this site that often, but if as Garytrader has claimed the asset has been moved, then I have a theory as to what has been going on for the past several months.

So this court case has been brought by FRR due to allegations regarding Stephen Hope blocking finance(amongst other). I have used the word allegations, as that is what they are until proven!

If these allegations are correct and funding has been blocked. Then how would SN/Zaza get funding in place without SH blocking it?

My theory is that they have been lead to believe that they have a case, but they know that this wasn’t going to be a quick fight. Therefore, they gained an injunction to stop SH taking control of block 12, which time would then be used to get all of the due diligence signed off for the Durham loan. They also know that this wouldn’t last for long, so at the same time they spoke with the GG about transferring ownership to another subsidiary. As from what I have read the PSA doesn’t allow for block 12 to change ownership without consent for the GG. If it does without consent then the can take the block back. So if the Durham loan has been approved(in principle) and we know that we have an NDA with BP, then they may have given the go ahead. However, the issue they would still face is that SH could still block it, as remember he is still on the BOD’s.

So as the GG have agreed for the asset to change to another subsidiary, due to the Durham loan being agreed in principal. They then moved the asset so that SH isn’t able to gain control of block 12, knowning that he would then go after what he could. However, they also know that in order for him to take control of FRCC, then he would have to resign from the BOD’s or their would be a clear breach of duty’s! This would then allow them to sign the Durham loan, which would give them to ability to pay SH off completely and carry on the court case with little risk to the asset.

As I have said this is all just a theory, but from the information that we currently have I believe that it is a good one.

Posted by Madpunter on Sat 4th May :-

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.

Posted by OLADAPO007 @ 18:54 :-

Having had a read of what Hope's lawyers are taking to the Cali case, it does appear that the part where the judge slated Hope for making him come up with wrong judgement has been totally ignored. In that judgement in which he refused to reverse himself, he did say that on appeal that FRR would probably do well ie having now seen all the evidence and taking Hope's hiding of the facts into consideration. IMHO going forward the case would probably start by FRR presenting this evidence to the Cali judge and he would definitely see all the attempts Hope made in order to hoodwink the judge. If the same case is being presented as Hope's lawyers have indicated FRR would be better prepared and put their arguments in the right order this time. Somehow , given the facts as seen so far, imho FRR are going to court to get a judgement that would right the wrongs of the previous case ie in terms of Hope hoodwinking the judge and getting a fair settlement for themselves. The Green Capital issue is something else to look into.

Posted by AJamesW @ 17:54 :-

This lot?
http://www.greencapitalllc.com/

Posted by WHamBoy @ 17:46 :-

Order on Motion for Pro Hac Vice
https://www.courtlistener.com/docket/14933328/frontera-resources-corporation-v-hope/

Now there are 30 documents filed.

Posted by daniel1son @ 15:06 and 15:46 :-

Claim, counter claim. Lawyers spinning each sides tale.

FRRs case seems strong. Then Hopes case seems ironclad. Both sides legal teams (obviously) omitting any detail that doesnt paint their clients in a great light.

FRR will have made their current team aware of Caymans, so there must have been a basis to start proceedings in Cali. Hopes team has decided not to include any information about his conduct in the latter stages of Caymans, and rests a lot around the judges initial judgement in Dec (which we all already know).

Great lawyers, spin compelling cases.

The most interesting bit of info, is that Durham doesnt seem to be in play. There seems to have been some sort of Farm In AND a deal struck with Green Capital LLC (would suggest its the more polished, website!).

Anyway, other than Zaza and SN starting to play very dirty, there isnt much in there that we didnt already know.

It'll now be down to the judge and TRO. Although, that is also looking increasingly like a side show, with the new maneuverings.
We sit and wait... still.

https://www.dropbox.com/sh/6lw9qe59pv1dh8e/AADZUU2UqC1uFd72_O8iQA3Va?dl=0

Realise doom prophets are gloating, so have added the d9c ror transoarency purposes 'Hopes response'.

Just remember, Doom Prophets are only going from this, nothing from them the other day when we released ours!

There are all sorts of games being played out, lets see what the next doc brings.