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Posted by Dulwichman on the 22nd June :-
The rest will follow remember the oil cycle really has not changed in terms of demand, in fact it is predicted to grow in consumption over the next few years. If all we have been told by Zaza and backed up to some degree by others. It just may put some perspective on matters and all this legal stuff (good or bad) is a very useful time user perhaps to hit the oil cycle of demand out of the ground and our low price here is more than useful and no wonder others want the asset. As long as we can keep hold of it even in a reduced area then we are laughing.

Look out for the Bull heard in analysts over the price of all in a few years whilst I may take no notice of of them myself somebody does and money will be cheap for a go it alone Company for as we know many other aspects of the physical side of oil production is ether in place or easy to achieve. It may just explain why the Company fights all the time -to hit the best part of the oil cycle.
Just a muse I know and trying to be positive but the oil cycle is real and based upon one pubic report is not much, but it may explain something.
Good luck all and to the Company we are after all still alive JUST.

Posted by Dulwichman on the 22nd June :-

Just a thought
Whilst everybody including me in concentration on the immediate survivability of the Company and then hopefully some form of financial arrangements by any reasonable means to at least get our hard earned back and possibly more. There is one question that keeps coming up to me. Why is this fight still taking place when many others would have given up the ghost? Just as part of a possible reson may have just surfaced based upon SN's lifelong experience of the Oil sector (remember hi old man was in the business as well)
What we do know is that zaza has hinted big time time that when all was good (?) the intention was basically to sell off the gas and concentrate on the oil on a go it alone basis, The one thing we do know is that the get out of the ground price is very low and the oil is good quality (sweet). I am basically a long term investor and do not really trade much but this does mean that I look at the long term. Well if you look at the oil sector it is basically cyclicle with the knock on effects with big oil as far as exploration/ development etc. Leaving aside the oil glut at present and the virus on top it explains the present oil price - remember a key patrt of the the oil industry is replenishment so when oil is cheap than the industry as a whole shuts down so as to move the market up to gain profit. this is the classic cycle in its simplest form and is almost predictable. I would acept that the demand for oil in the future may well go down in the advanced world due to green issues but this is not an overnight thing. - it will be gradual- However in the developing world for the foreseeable future oil will be in ever increasing demand despite what that green brug thing mayu say - I would guess for the next 20 odd years. Add in the cycles of the industry and the green shoots of oil exploration are just about beginning to show with in the majors - do not look on the surface at what they are doing now eg BP taking an impairment that is only cleaning the stables with the change in ceo add in their increased lifetime borrowing capability as of now they do not need it so why? I would say just good business actions whilst interest is cheap and they will not be using yet. .look at the other majors and they are all doing the same thing but maybe in a different way but with the same end in mind. This to means only one thing they are getting ready for a spend up! but not quite yet.
Today low and behold I have seen the first comment (in this case from morgan stanley) a senior oil analyst is now predicting oil to to be at $100 a barrel by 2022! One swallow does not make a spring but if others follow this makes life very interesting indeed. His price will be wrong by definition but say $80 a barrel and our low cost of both out of the ground etc and long term cheap interest rates I would suggest that all this bru ha ha is about only one thing only survivability. The rest will follow remember

Posted by Moleinahole on the 22nd June :-

RE: Translation #4, Zaza interview from May, US$66.95
Thanks Looed for your efforts at the moment it is appreciated by many and in the finest traditions of the shareholders and posters to this board.
A couple of themes I'll comment on.
Is there oil and gas in Georgia and in block 12? The answer is yes but the how much and how commercial is what has been the issue. Hence the debate about the CPR. I've posted before on the CPR. The reason we have no reserves on the balance sheet is because the CPR that have been done (by NSA and then by Varang as part of their due dilligence) is a good start but its not P1 reserves. Many times we have been promised a revised CPR. The delays were understandabale while no drilling had occurred. But since 2016 drilling has occured in Taribani. Mtsare is a producing field. The next reason profered was it costs money to do the CPR. Since 2016 money has been tight and available cash spent on general running costs, exploration drills and debt repayment of YA.
So unless the company have now done a CPR on the quiet which is unlikely then he must be talking about the old CPR. Had they progressed to a CPR with bookable reserves we would not be in the position we are now. It would have attracted investment or finance and enabled Outrider to be paid off. So in spite of what Zaza may say I doubt we have a CPR that holds water to book reserves and hence his comments might work with a journo but not in the world of finance.
He has then danced around the words of the arbitration. The key issue remains whilst the arbitration may or may not have said anything on termination - the contract of which quite alot is now known from a mix of court and registration to supplement the previous known information in CPR and aim admission documents clearly and consistently show that a material breach of the contract can result in serious consequences. That action is post arbitration.
So whilst its a nice battling performance it does not answer the critical questions of who has block 12 PSA now and what is happening with the termination.
Unless they do something to block it on the 1% or it does not apply to the 1% (which I doubt) then in the absence of some help from the US lobby then whilst these appearances may play well to those who want to hear that political agenda it is of little help.
Zaza and Steve may hope for US support but they may not get it. Ably abetted by Outrider pursuing their own agenda the company has been weakenned which has in my opinion amplified the boards past failings to book reserves and/or increase revenue. And that in large part comes back to the geology of Georgia. Seeking to position blame on the GG now for what could happen next does not help shareholders unless the talk has some real backing. To date I've not seen that. So I hope behind the scenes they are talking and not relying on sabre rattling and that they have not burnt all bridges.

Posted by Madpunter on the 22nd June :-

JP Morgan Predicts $100 Oil
JP Morgan's head of oil and gas research for EMEA: The reality is the chances of oil going toward $100 at this point are higher than three months ago.
The current situation is fundamentally no different, according to JP Morgan's analyst, who expects the oil market to swing into a deficit sometime in 2022.
It may sound far-fetched at a time when many are worrying if Brent could rise back to $50 a barrel, but at least one analyst believes the benchmark could not only recoup all that it lost in value since the start of the year but shoot up over $100 a barrel in the observable future.

"The reality is the chances of oil going toward $100 at this point are higher than three months ago," JP Morgan's head of oil and gas research for EMEA, Christyan Malek, said as quoted by CNN.

The reason is simple: the cyclical nature of the oil industry. In March, before the coronavirus pandemic really hit, JP Morgan's analysts issued a note saying the oil industry was entering a supercycle that could see the price of oil hit $190 a barrel by 2025. According to Malek, this is still a distinct possibility.

The forecast is not without a logical basis. The way cyclical industries work is that the industry produces a lot of the commodity when there is high demand for it. Eventually, supply begins to outpace demand for one reason or another. Prices then fall, the industry retreats and shrinks production to limit supply and stimulate higher prices. This brings a deficit of the commodity, which pushes prices up. This cycle repeats once every few years.

The current situation is fundamentally no different, according to JP Morgan's analyst, who expects the oil market to swing into a deficit sometime in 2022, which would push Brent to $60. This, in turn, will motivate producers to start pumping more crude. The deficit, Malek estimates, could reach 6.8 million bpd by 2025. This is what could cause prices to climb to $100 or more.

"The deficit speaks for itself. That implies oil prices will go through the roof," Malek told CNN. "Do we think it's sustainable? No. But could it get to those levels? Yes."

By Irina Slav for Oilprice.com

https://oilprice.com/Energy/Energy-General/JP-Morgan-Predicts-100-Oil.html

Posted by Looed on the 22nd June :-

Pt.7

Journalist - No, I remember that during Shevardnadze era, when you were saying that the oil will explode from beneath, after that, as you said, 22 years have passed and you are getting this oil drop by drop, but it is not so much as it gonna explode from beneath, right?

Zaza - Do you know what? Unfortunately, not many people know that the industry is doing just that. When the first drop of oil and gas condensate was seen in Shah deniz in 1954, it was only 50 years later that it began to be extracted from there. All of this takes time, a lot of capital to invest, and a lot of hard work. It's only in movies that you dig and oil explodes from beneath, otherwise in real life it's different. And, as far as these works are concerned, we are very proud of the results we have achieved. And for those who are interested will create tremendous value.

How much oil did you extract during this time?

During this time, about $ 60 million. I can't tell you in barrels, but in terms of cost ...

So, you invested half billion and extacted about 60 million. You work on loss, right?

Any oil exploration project starts with losing because…

Yes, but you have been working on loss for 22 year. What is your interest?

Please let me finish. It starts with a loss and in some cases after 5 years, in some cases after 15 years, in some cases after 35 years, if you are lucky enough to find that ore, then you move slowly to profit. This is what all companies do, and we are no exception.

OK and now you are saying that you are lucky and have already found it?

As I told you earlier, the two largest, most famous companies in the world have confirmed the oil and natural gas supplies we have found. And, by the way, it has been proven and we are not doing this to convince anyone. If someone does not believe that the mines will be in Kakheti or in Tbilisi, including you, this is not a decisive factor for us. The most important thing for us is to convince the bank and the shareholder, who is interested in the development of this activity and ...

Ok and how much stock is there?

As for natural gas, the extractable reserves are 350 billion cubic meters, and as for oil, 1.3 billion barrels is extractable.

Posted by Looed on the 22nd June :-

Pt.6

Zaza - You reminded me of something good. By the way, you started with Shevardnadze's era and now I remembered something. During Shevardnadze's period, when we started this drilling campaign, a well-known member of parliament, who currently is a member of parliament, announced it publicly in Georgia and started to say that these are swindlers, because ...

Journalist - You probably mean Roman Gotsiridze.

No, then it was different. It was Mr. Giorgi Gachechiladze. It was said that 1 billion was removed from the stock exchange by bringing Shevardnadze as a result of manipulation. Then, to be honest, we weren’t even registered on the stock exchange at all, and there wasn’t even a stock company at all. There was a private company. We have many such cases during our activity. I will tell you more, swindlers, money launderers, CIA agents ...

Yes, but when you made statements about the mines, where is this oil and gas?

As for Merab Gotsiridze, I don't really know where and what Mr. Gotsiridze said. He never had any contact with our activities or the data of what we were doing, and from where he concluded, say, he had twice made this attempt, if I am not mistaken, and published quite insulting articles about us. Now, as for the discovered deposits - I do not know who believes what, Mr. Merab, but we have made half a billion investments over the last 23 years and the world's most famous oil service, geophysical, geological interpretation companies are working with us, three of the Big Five. These are oil supply certification companies. We have been working with 3 during this time and for the first time in the history of Georgia we have created proven supplies. This independent third party has confirmed the supply of natural gas and crude oil. Now, who will come out and say irresponsibly, believe me or not, this is their business now ...

But where are these supplies? Why is there no extraction and so on? If we have any

How does it not happen? Extraction takes place. We have been very successful in drilling and testing. As soon as we decided to go to the stage of large-scale development of these mines, it was from here that very big problems began, which continue to this day. And these are the problems, starting from the revocation of the license and the contract ...

And where is this oil reserve in Georgia?

It is located in South Kakheti - Dedoplistskaro and Sagarejo district.

There has been mining since the time of the communists, but there is said to be little supply and even extraction of oil, but not so much that we become an oil country.

Do you know what? I don’t know anyone who says, who you’re talking to or when was the last time the person learned about the results of this work? Or from what source does he draw these conclusions? It’s hard for me to say

Posted by Looed on the 22nd June :-

Pt.5

Journalist - When you say that you offered the public announcement of the decision – why do you refuse to make it public separately or jointly?

Zaza - It is probably best to ask them why they say no. For exactly the same reason, perhaps, why in one speech they say that all these 14 demands were met by the court, in the second speech they say that part ...

No, the main thing here is, as I understand it, the requirement to terminate the contract. Is this requirement met? And should you return the lands or not?

We do not own land. We have the right to conduct oil exploration and extraction operations. As the arbitration has decided, we have already returned the territories where we do not carry out these works to the state. So this issue is closed. Now, according to the arbitral decision, they have no right to cancel the contract. Therefore, it is a direct attempt of expropriation, which is called deprivation in human language, and this is exactly what the government is trying to do.

It is clear and you say that the traces of Russia are mixed here and that is the reason? Maybe there are some private business interests?

Maybe both. You’ve probably seen this last communication and it’s not just us.

But we have heard such a claim in your address - the representatives of the previous government also had this claim and it still comes from Shevardnadze's era that there are some swindlers, there is no oil and gas in Georgia, they spread false information every year, in order to increase the prices on their shares on the stock markets and they use Georgia for this. What do you say about this? Indeed, for some time now, you have not found any special mine, and keep making the statements all the time that there are mines, there is oil in the country, and so on.

You know what? When you say “you keep making the statements all the time”, I don’t quite remember that doing.

I have hear it several times

“Several times” is different

OK. I exagarated. I admit.

Posted by Looed on the 22nd June :-

Pt.4

Journalist - What does the state want from you?

Zaza - Their main demand was that the company be charged about 320 million GEL in favor of the state, as if due to violation of the terms of the contract, which the arbitral tribunal did not satisfy ...

And what you did not do according to the contract?

Which was not satisfied by the court. They also wanted to terminate the contract with us because they demanded payment. This, too, was not satisfied by the court. Only 2 out of 14 requests were satisfied. 1 of these 2 ...

Do you mean arbitrary court?

Yes

Which are these 2 demands?

One of these two is paying a fee of about $ 200,000 in advance, which we had been paying for for 23 years, and even now we're glad to pay it and we were ready and we didn't even argue about it. That was first and the other demand which was satisfied is that in the areas where we do not carry out oil and gas extraction works, should be returned back to the state, which we have also done and returned.

So what's the problem? If you win the main lawsuit and you have nothing left, then what do you dispute with the state?

We are not arguing anything, the state itself is arguing with us here, as I told you, since 2013.

I understand and as you say this argument was concluded with you victory in arbitrary court, right? Then what is it? What are we talking about then?

We are talking about the fact that the representatives of the government are coming out and claiming that they have won, which is completely illegal ...

What they are demanding? They say that they won and what should you do? They want you to leave?

If you let me finish the sentence, I will tell you

Yes, please. I am listening.

First of all, they claim to be black on white, like they have won and secondly, completely illegally, are publicly claiming that we should terminate the contract in accordance with the decision of the arbitral tribunal, which is not true. Because...

That is, the main thing is that they demand the termination of the contract and you say that it is not written in this decision.

Yes, neither in the decision nor in the contract.

Posted by Looed on the 22nd June :-

Pt.2

Journalist - Ok but from where does this information come from? Say one spent this amount of money on this year, etc. Is it a lie? Is the false information on the website?

Zaza - Yes. This is not correct information. On the site, if you read it carefully, and I can provide you with additional information, they are trying to show the audience, listeners, the public part of information, that there are some kind of lobists, but there is also written that no contract and no payment was made to these people by the company... So, it is confirmed on the same site that "Frontera" does not pay anyone's money. As if…

Is it normal to hire lobbyists? Illegality is nothing here and every company hires them, I probably don’t know, I can’t tell you.
Of course, there is nothing illegal here ...

Yes, and that's why I did not argue, that it is illegal. I just wondered if you had lobbyists. Ok. You say you don’t have it.
We have no lobbyists. Of course, it is quite possible for us to have it, and many companies even have it, many countries, governments, parties, individuals. There would be nothing strange in that, but unfortunately or fortunately, we do not have any lobbyists.

Let's return to the dispute over Georgia. What is the Georgian government arguing with you and have you lost your case in the international arbitration? Because the Georgian government and its lawyers are talking about the fact that there is already a decision in the arbitration and they are asking you to make this decision public, and you are refusing to make it public.

I’ll start with the last part of your question. We have repeatedly appealed to the State Oil and Gas Company and the State Agency, which is part of the Ministry of Economy, and told them to meet and jointly publicize the part of the decision that is very clearly established and leaves no room for speculation. Unfortunately...

Why together? You can make it public, what’s the problem? They agree.

Yes, it is clear, but their wish is to publish a complete 152-page document, which contains ...

No no. As I have heard, they also agree with the publication of the resolutional part, only with the publication of the resolutional part.

And it is on the resolutional part that we have addressed the need to make a joint statement and make it public, not separately, but jointly.

Posted by Looed on the 22nd June :-

Translation #4, Zaza interview from May, US$66.95
Pt.1

Journalist - Our next guest is Zaza Mamulaishvili, General Director of “Frontera”. We welcome him. Hello, Mr. Zaza.

Zaza - Hello, Mr. Merab.

Thanks for participating in the show. In short, "Frontera" is heard very often in recent days, especially by American senators. We’ve heard a lot of opinions on this topic, including the fact that mostly the lobbyists hired by your company work pretty well. There is also official information about these lobbyists that your company, I mean the head office, has a lot of lobbyists really hired in America. To what extent do they focus on the problems related to Georgia?

First of all, thank you so much for inviting me to the show and for giving me this opportunity. However, I have to answer your question, the first thing that comes to mind, with the question because I don’t know where to search. Who is searching, and who finds these lobbyists who are hired by our company?

I saw some stories on various TV channels, where it is officially posted on the website of the Ministry of Justice of the United States of America. Because covert lobbying is not possible and it seems that these documents have been officially retrieved, say, this and that year so much money has been spent on lobbying, and so on.

You are absolutely right, Mr. Merab. This is open information in the United States and any such lobbying agreement is registered and such contracts can be viewed on the public domain. However, whatever sources you rely on, this is not official information from the Ministry of Justice or the Ministry of Finance. There is such a website called “Open Secrets”, and it is often used more or less to identify credible information. Nevertheless, Mr. Merab, even on this site, from which Media provide part of the information, they leave the main thing untold, where it is written that "Frontera" has made no contribution to the people and politicians they seem to refer to as „Frontera“ lobbyists. First of all, I want to tell you that there is no way you can be a senator and a congressman lobbyist. You can’t be a lobbyist.

No, we are not talking about the fact that the senator is a lobbyist. Simply put, the talk is that the lobbying companies you hire work with these senators and that’s why they make statements.

I reaffirm to you that there is no such thing in nature. "Frontera" has no contract with any lobbying company.

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