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Posted Madpunter on the 5th August :-

IMHO the two American companies are BHGE (which was valued around $23bn last November, when the meeting in Georgia was to take place) and Green Capital LLC (the company who signed a Farm Out Agreement when Block 12 was transferred in exchange for a 5% Royalty Interest).

IMHO BP and a possible consortium was unlikely to be negotiated last year when the arbitration was still ongoing and only the old CPR's were available. After the elections (hopefully with the GD defeated) then FRR may be able to obtain a new PSA, plus possibly some or all of the returned sections of Block 12. IMHO then FRR will be able to update the CPR and negotiate a deal with the SM's.

The last post was posted by bugsy-b.

Posted Madpunter on the 5th August :-

Reference to Ryder Scott
Posted by Kickmuck on 29th September 2018 :-
Well, things are progressing nicely here.

Firstly, just lets recap on the last two and a half years of technical progress in Block 12. This is a petroleum engineering story at its best – we finally figured out how to drill clean holes in this tricky geology and we got zones to flow that have baffled drillers for decades. The Soviets fooled around for so many years washing out the sands and spitting cement; this really is a classic story of how one of the worlds great under-developed regional plays gets conquered. It’s taken years for Frontera to get to this place, but then it took years to realize that the Permian in West Texas could do what it’s doing now – read, understand and see the similar story.

OK, on a very basic evidential level:
Q: Is the oil there in the Block 12 license area?
A: NSA have presented cautious oil and gas in-place estimates based on data they have audited from the Frontera drills and data they have generated themselves. We also have some Ryder Scott work. These data estimates are staggering and no one can deny this is not absolutely world class land with several great plays – based on the petroleum consultants data.

Q: Can we drill holes, work the rock and sustain a major field set of commercial flows?
A: Frontera have presented an exploitation & development methodology for a super-multi-well strategy which has excited certain parties to take an interest in Block 12 over recent years, from MND Group / VTB, through to the recently announced majors – these are the ones the market knows about…

OK, I totally agree that retail stockholders are lacking straightforward data to reassure the exploitation and development story, but if you step back (or talk to the right people) it’s now clear to see that the Block 12 geology has been capitulating like a woodchuck since 2016 and the grind of it all has been getting the deals to plug the whole thing in. It just needs a whole lot of money throwing at it now.

Next, a deal was finally nailed with mucky old Yorkville to help clean up and ready the Frontera balance sheet (announced in early June) and a little tussle subsequently developed with Yorkville (thru August and into Sept). My understanding is that this is not complicated stuff and an explanation on Thursday next at the stockholders meeting needs to be listened to really carefully to make sure there’s no misunderstanding by retail - I understand that a sensible outcome has already presented itself and just needs working through with the lawyers. Like someone said on here, you don’t fight over an empty box.

Posted Looed on the 4th August :-

Pt.3

J2 (contd) - However, before this announcement and before and after the meeting with the Ambassador of the United States, there was a letter, a number of very serious ones, signed by senators and congressmen. The letters repeatedly mentioned the name of the company "Frontera" and wrote that the Georgian government and Bidzina Ivanishvili are trying to expel American business from the country, which is done in favor of Russian, Chinese and Iranian interests.

Giga Bedineishvili, Political Scientist (GB) - If you want to really climb the country, how Ivanishvili climbed Georgia and literally turned the country into his backyard, if you want to achieve that, you have to do something that will always worsen the investment situation. You will always have to poke your nose into big projects and try to control them and therefore you will always have to harass them including big American projects.

J2 - The arguments of both the state and Frontera are different, but the fact is that the state interests have already been damaged through this dispute. The US House of Representatives and the Senate are already talking loudly about the fact that the interests of the United States of America are being harmed in Georgia, and this decision is already reflected in the recent legislative acts of the United States.

Giorgi Rukhadze, Expert, (GR)This is either the reality or the government's arguments are so weak, they work so unqualified that they manage to convince American lawmakers that such a thing is not happening in Georgia. On the other hand, it turns out that one company is better able to work with American lawmakers than the entire state machine, which ultimately leads to the fact that it becomes a country's reputation problem.

J2 - And yet, what did the state gain through the dispute with the American company? Until now, Frontera's Taribana field, where the company says there is a large amount of natural gas and oil, still has a license to extract natural resources. And, if we assume that this is indeed the case, the fact is that through this dispute time was lost, the country's investment environment was damaged, we received numerous critical letters from a strategic partner, and another - this dispute cost the country several million in international arbitration.

Zaza - Approximately $ 30 million has been paid to American and German lawyers alone. The remaining 12 million are American lobbyists. In total, it is 42 million GEL

Posted Looed on the 4th August :-

Pt.2

J2 - Due to these problems, Frontera has not been able to start gas extraction so far and, as they say, due to the hostile attitude of the government, they have not been able to increase the investment of 500 million that the American company has made in Georgia over the years.

Zaza - Last year, in 2019, because of our excellent drilling results, we decided to form a consortium with two more American companies to launch a multibillion-dollar drilling program to increase our gas production. We addressed the Prime Minister of Georgia and the Minister of Economy to meet with us. I was coming from Houston with the presidents of these companies to meet with the authorities and get their confirmation about the readiness to welcome foreign direct investment in the energy sector. We only had this request with the Georgian government and you will be surprised and refused to meet us.

J2 - What was the reason?

Zaza - They have not mentioned.

Zaza - In 2017, the state sued Frontera in international arbitration and demanded the return of the areas where the company was not engaged in exploration and extraction. The dispute ended in 2020. Authorities said shortly after the court ruling that the case had been won by the state and that the decision had grounds for termination of the contract, which was soon followed by the notice of termination of the contract with Frontera by the Oil and Gas Corporation. The arbitral decision is not public, but as the company says, there was no fair basis for terminating the contract.

Zaza - Of these 14 claims, the arbitral decision states the following: 12 were not satisfied, only 2 were satisfied. One of these 2 requirements is that we have to pay a subsoil use fee, which we have been paying for 23 years and have never refused or disputed. And secondly, by the decision of the arbitration, we are obliged to return the territories where we do not conduct oil and gas exploration and extraction works to the Ministry of Economy, and we have done so.

J2 - Despite the fact that “Frontera” received the letter about the termination of the contract and government stated that they won arbitration dispute, the Ministry of Economy issued a statement a day before the meeting with the US ambassador, which read:

"In order to maintain the reputation of the country with a reliable investment environment... The Georgian government has decided not to terminate its contract with Frontera and to allow the company to continue operating in the part of the original contract area where oil production has been under way since the Soviet era." "We are talking about about 1% of the state's search area, because about 99% of this area," Frontera ", according to the arbitral award, has already returned to the state."

Posted Looed on the 4th August :-

Translation #27, Formula news with Zaza, 11m10s, 02/08,
Pt.1

J1 - The American company "Frontera" has been looking for gas and oil in Kakheti for years. The reserves are said to be 350 billion cubic meters. However, so far what we have found is a major international scandal. The Georgian Dream became involved in this when it imposed barriers on investors. However, the Georgian Dream could not calculate the penetration of the American company in the political elite of Washington. Now an ill-advised approach to Frontera costs Georgia millions. It is difficult to assess the damage done to the image of the country. While preparing the budget, Droeba tried to get comments from the Ministry of Economy and the Georgian Gas and Oil Corporation, but we did not receive any response. What is happening on the land of Kakheti, which has brought big problems to Georgia instead of oil and gas. The failed Georgian Kuwait is presented in the story of Levan Tabidze, a journalist of "Droeba".

Zaza - Taribana will make Georgia energy independent, because it is in these rocks and in this area that you are looking at now, at a depth of 4,000 to 5,000 meters, there are 350 billion cubic meters of gas that is extractable.

J2 - This place, about which the president of the oil company "Frontera" speaks, is Georgia, Kakheti, Dedoplistskaro, Karibana Valley. More than 350 billion cubic meters of natural gas will be enough for about 150 years, considering the current consumption of Georgia.

Zaza - Geologically, at this depth, there is up to about 3500 meters there is an oil. And from 4000 to 5000 meters it is a supplies of natural gas. And, it is in exactly the same geological sediments from which BP from Shah Deniz now obtains in Azerbaijan. So that the potential is huge.

J2 - “Frontera” says that the amount of resources in the Taribana Valley, besides them, has also been confirmed by two world-renowned American companies - the NSA and RYDER SCOTT. According to the director of "Frontera", the potential is huge, but they do not have the opportunity to use this potential. The reason is the government's obstruction and the creation of barriers that the company has been facing in recent years.

Zaza - We can not do this today because the problems, the obstacles, the contradictions that we have with the government, do not allow us to increase the volume of work and increase gas extraction. When the government violates all the terms of the contract, it gives no confidence to either the company, or the investor, or the investment banks, with which we have been working for years, to give us additional capital and money to expand the work here. Today, if the government tells us that it is ready to play constructively, in 6 months we will be able to resume drilling new wells, which means that in 1 year from now, we will be able to start extracting natural gas from new wells.

Posted Looed on the 3rd August :-

Pt.6

DA - This is good for Georgia. Do not always think about your pocket. This is salvation for us. Tariff will be reduced. Gas is very cheap in Azerbaijan, it is 2 times more expensive with us if I am not mistaken.

Zaza - Georgia is the only country in the world whose government claims that there is no gas or oil reserves in Georgia, despite the fact that we have made about half billion investment and have an approval of 2 independent American companies about the gas and old reserves in Georgia. There is no such phenomenon in any other country.

DA - Our government is lying, Mr. Zaza. I know this and believe me for God`s sake. Exploration works should to be carried out in Poti as well. I would start in your place.

Zaza - Here, you mentioned Poti and I will add it as well. Just a few weeks ago, before we talked about Gazprom and Russia-Georgia relations, the Georgian government decided to give a gas exploration license to a company, 80% of which is related to Gazprom, and which is on the list of US sanctions, because of North Stream 2 pipeline. Here, in the whole world they chose exactly that company? Is this a coincidence? They selected the company that is under American sanctions and 80% of its business is related to Gazprom.

DA - I think they are going to carry out search operations in Ochamchire district as well. Something is unclear. Ms. Turnava, I thought you were Megrelian, it turns out you were from Guria. By the way, is this true what Mr. Zaza is saying?

Zaza - If she is frm Guria, then I change my position.(laughing)

DA - Are you from Guria?

Zaza - Yes

DA - Ok, then let`s blame Gakharia for this (laughing). Tell us. Is this true what this man is talking about? Are you crazy? You are playing with fire.

Zaza - We had to include Ms. Tikaradze in this case.

DA - I'm glad you are my guest, Mr. Zaza. You have a clear position and as a professional you fight heroically for your “Frontera”. I recommend you to organize a rally near Gakharia's house. I will gladly hold the flag and stand beside you. Because it can not be unjustly converted. What kind of behavior is this that you can not pay the employees?

Zaza - Hundreds of people were left unemployed on the streets. Those people have no income and how should they live? They depended on our project and its revenue.

Posted Looed on the 3rd August :-

Pt.5

Zaza - And it has an impact because it gives you gas. We have no other choice, Russia is a better choice. Therefore, the government of Azerbaijan is well aware of this. They manage their business very smartly, based on their interest. We do not manage our business wisely in our interest, otherwise they manage perfectly. For them Georgia is the place where they can sell low-quality fuel. And, because of this they have enormous political influence. Naturally, Georgia's energy independence is not in the interest of Azerbaijan, nor is it in the interest of Russia, nor is it in the interest of Iran. Because Iran also has a long-standing interest in getting its gas into Georgia and ...

DA - Their gas is expensive, Zaza. You know, and so do I. $ 310 costs 1000 cubic meters. I think that, by the way, the caloric content of this Azerbaijani gas is also low. If you have done research, what is the calorific value of gas?

Zaza - Our gas, which we get today, is much more caloric than the gas of Azerbaijan.

DA - Is it 85?

Zaza - Yes, it`s more.

DA - Really? Do not drive me crazy. The one which we import is 74 or 76.

Zaza - One of the reasons for this is that some components, such as plows and propane, are eliminated and reduced in calories. They clean it by selling it separately. But our gas, geologically speaking, Mr. David, if we go to the Caspian Sea, the same sediment, these rocks there are deeper than 6500 meters and then rise with us at about 4000-5000 meters. And, Mr. David, you can not distinguish, the quality is so similar to each other.

DA - And, by the way, it was even in the 70s that it was said that very high octane gasoline would come out and there was very little sulfur. That was the most important thing.

Zaza - Yes, it does not have bad impurities at all. And, interesting what do you know? Because it is in the Caspian Sea at a depth of 6500 meters, it has about 200-300 meters of water on top. Our gas will always be more profitable economically. Because drilling depth of shallower wells is much lower. And, it will be much cheaper to supply this gas to Europe than to the Azerbaijanis. It's something of a vicious circle. As if everyone needs but no one wants. Because we, for example, thought that as soon as we had the result everyone would be happy in power, all the conditions would be created for us to increase gas production. But the opposite story turned out.

Posted Looed on the 3rd August :-

Pt.4

End of part 3 should read 'change very drastically.'

DA - Zaza, you are an amazingly interesting person. You can easily outtalk a lot of Political scientists. We can recall form the past some cases when Denikin burned us with horns and then returned us Sochi. There was a discussion about Sochi and we got in the end. I think that the same thing will happen to Mr. Putin. By the way, I have been talking with Ms. Khatuna for about 10 minutes about Gagra. How old are you, Zaza?

Zaza - I was born in 1964.

DA - Wow, that`s great. I know village Kolkhida very well. I rode a bike there a lot. Turns out that Khatuna was from the same village. I said to her that the Russian will have to return it to us. You were with me, if I am not mistaken, 2 months ago and you then said that, in fact, you have created something like a map and you have calculated large reserves of gas. Now, it does not really suit Russia we have a gas. The same story is for Azerbaijan. We import about 2 billion from Azerbaijan if I am not mistaken, and in case we discover the gas reserves, they will be in tough situation. This is why it`s important for us and it`s time for us to have our own gas reserves. Let`s build the gas turbines and our winter will be secured. We have a big deficit and buy it from Russia in high prices.

Zaza - Now, you touch on something that is very important. There is a 2018 World Bank study of 2016 and 2018, which was done for the Georgian government, where it is directly and unequivocally stated that instead of building large hydropower plants in Georgia, it is more profitable, safer to build gas turbines. Therefore, in one case, if it costs 8-9 tetris for electricity in case of kw/h of gas at today's prices, in the case of these large hydropower plants it will be 20 tetri. Therefore, the country must go in a completely different direction.

DA - Why don’t you make it? If you extract about 500 million it will be relief for the country.

Zaza - Here is the answer, part of the answer is in the July 27 letter sent by the Americans to Pompeo, where they say that there is a fact of alleged corruption in power. That's exactly why.

DA - Or they want to get rid of you and sell the gas themselves.

Zaza - Azerbaijan has a huge political influence on us today.

DA - I'm surprised and they should not have such an influence on us.

Posted Looed on the 3rd August :-

Pt.3

Zaza -How can a doctor do his job in these conditions? This is very hard and responsible work. The doctor should not have to worry about his income because they have very stresful profession and need to worry about the health tof their patients. This should be done by the government to ensure that the economy works, companies invest in the country, jobs are created, money goes to the state treasury, then doctors, teachers, schools and higher education are funded so that the most talented young people we have can get a good education and to live with dignity. It will not turn out differently. No one can invent this new system. But unfortunately, all the energy is directed to how a person maintains power, no matter what chair he sits on. By the way, one of the most important things Americans have done is to legislate that you should not hold the chair for more than 8 years. Everyone is used to it and knows that when they come, they have to go.

DA - 4 years is no enough for them. They want it forever. See today, Zaza, what they did in Belarus? Did you hear that Wagner's people were arrested? Elections are there and Russia has deployed troops. They are crazy.

Zaza - They are in a very difficult situation, Mr. David. As you mentioned, it is really tied to our story, to Georgia's energy independence, and to the United States. You mentioned it before. We have a very big reason for optimism and now I will tell you why. As never before, Russia's economic reality has changed. Gazprom had a market capitalization of $ 380 billion in 2007 and was projected to reach $ 1 trillion by 2020. Now it is 50. Already the issue is such that a person does not know if he will go bankrupt at all. This means that Gazprom, which had a huge financial resource - the whole of Europe depended on its gas and paid the country's money for it. Already revenues have declined, costs have increased. After the next 5-10 years, the prospect that oil will again become $ 175 a barrel and gas another $ 500 per cubic meter it will no longer be. There is no such prediction. And, at the same time, what started it? American gas has entered Europe, while Western European countries are already consuming it, the Baltic countries have fled altogether, they are already on American gas. But what is the main thing? Russia has already changed everything. One thing is for sure. When did Russia always make concessions? When did the Baltic states join NATO? When Russia had no money. When did he leave Afghanistan? When the money ran out and it was very tight. When did the Soviet Union disintegrate? When they ran out of money and did not have it. When the money runs out you have to go to either Western Europe or America to borrow money. That's where it all begins. They will have to make some concessions in exchange for cash loans, and if we act wisely in the next 5-10 years our reality in relation to the lost and occupied territories can change very drasti

Posted Looed on the 3rd August :-

Pt.2

DA (contd) - There was a very good girl there, her name was Sophie. She showed the compassion and made her to write the application and after paying 10 GEL the driving license was still active for her. If you can do such things, get rid of it all. Why should the post office send your fines? It's supposed to be nothing, but it's something. This is not right. The state must motivate the people towards harmonization. This is unconstitutional. Zaza, we say a lot of things that no one should get used to. I understand Azerbaijan is 100-150 years behind. We are individualists. With us, personal freedom and self-respect is not an ordinary but a superior feeling. People should not be treated like that. Especially since you are an American investor. You, as a citizen, and not the director of an American company, don`t you think that something is not working as it should be working?

Zaza -Of course. Now, the example that you gave, it happens to everyone, to me, to you, it`s very typical. But do you know the main problem? Our government is not thing about creating the evnronment for its citizens, where they will be living happily. Everyone has the right to be happy and to strive for it. The government also exists because it has to help people in this. Now, this is one part of what you said, but ...

DA - For a second, I remembered something good. I'm so sorry. Here, I want to tell the patrol workers. Me and my producer were sitting and watching some American documentary film which was aired in 1934. This American himself was so eager to say what interesting rules they have in Italy. In Milan there was established the day of the patrol officer and anybody who considers someone as a good police officer, they make gifts for them. 2 Policemen won the prizes – one got 160 gifts and another got 180. Maybe we could come up with the same idea somehow. Something needs to be changed, Mr. Zaza. We are the same age and do you like this? I don’t like it at all.

Zaza - How can a person like this? This is when a person does not have the opportunity to work with dignity and have a decent income. When young people do not have the opportunity to get a decent and good education and then build their careers so that they have a decent income. When everyone has a fear of the future ...

DA - [Speaking about some irrelevant things] Is this an education? It is the shame. What university did you graduate from?

Zaza - Medical university

DA - Really? In my early ages, there was Ilia Vekua, Dato hkhikvishvili. This is not right. Generally, education is stuck in the swamp. Nor do they pay attention. Doctors have 400-500 GEL, they do not even have a salary of 200 $. What kind of life is this?

Posted Looed on the 3rd August :-

Translation #26, TVKavkasia with Zaza, 30/7, 28m35s,
WARNING!!!! - this is what our translator says about the interviewer - "The interviews of this journalist are total mess. He is talking about one thing, then suddenly continues talking about another, then third and then returns to the initial topic. Besides, he does not always finish the sentences, he starts the second sentence in the middle of the first sentence, while I am struggling to connect these two sentences with each other. That`s crazy!!"

I started out trying to cut and paste the irrelevant bits but had to give up. With that, here's Pt.1

Davit Akubardia (DA) - So, people, Mr. Zaza Mamualishvili is the General Director of Frontera. Mr. Zaza does not receive a salary like me and many employees depend, so to speak, on the humanitarian assistance of relatives. You are not right. Why did you impose the seizure on Mr. Zaza? I really do not understand. You are not normal, otherwise how can you? This is a foreign firm. You are officially imposing a seasure. I am not talking about the 25-30 million that you have to return. Why do you seize it? By the way something very interesting happened. I received a lot of fines. It turns out that the mail did not work during the corona virus. I dare say this now, I was also telling the previous minister not to do this nonsense. Are you a driver? I am a driver, I am driving for a long time, I have never had an accident and I have not had a quarrel with anyone. Believe me, I am a normal, ordinary driver. During this coronavirus, there was a lot of nonsense that they did. By the way, I had several American citizens here, Georgians, from Imereti. There were very good boys, truck drivers. They said that if you cross the whole America you won’t encounter so many cameras than you have here. This camera fine was previously brought by the patrol officer. The patrol police officers themselves told me that the Ministry of Internal Affairs had signed a contract with the post office. This Georgian Post is an incomprehensible organization. Looks like they are close relative to Bidzina. Patrol fines are distributed by mail. This is not right. Today I was in the patrol police, begging. Very good people work there. I said that I will give you my phone and as soon as the camera fixes me, send me an SMS about it. Today I went to find out this story and saw the wonders. Ms. Khatuna Khurtsilava was there, she was a very good woman. She has not received the fine of 10 GEL. This fine was accumulated and the patrol confiscated the car, terminating the right to drive the car for 6 months. She did not know about this. In a words, I witnessed the fact that this woman was explaining to these policemen that she had not received anything.

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