Member Info for Madpunter

Part 5
What could be the cause of the complications described by the guest of the Morning Talks? Who might be

"What should be the reason, if not the desire, that American companies were not here at all?" We have no information about the interest of a particular company / s, but we do not rule out that after the half-billion dollar investment we have found, it will be Rosneft, Gazprom or China's CNPC, or SOCAR would be happy to start all this. Without showing development . "

Zaza Mamulaishvili believes that Georgia has sufficient mineral resources for energy independence:

"Georgia, which has its own resource of natural gas and will definitely achieve energy independence, because the potential is huge, occupies a completely different position economically and politically in the region. Azerbaijan has a huge political influence on Georgia because it supplies gas, and Russia, which supplies 10-20% of its annual consumption, has a huge political influence. If there is no need for this and it has its own resources, it will make Georgia energetically independent, richer and stronger economically . "

The Oil and Gas Corporation says it supports the announcement of the Stockholm Arbitration Award and is waiting for a response from Frontera.

"We support the publicity, but we have repeatedly offered the Georgian side - the Oil and Gas Corporation and the State Oil and Gas Agency - to make a joint statement on the arbitration decision, as the decision is very clear and leaves no room for speculation. Therefore, let us jointly state what decision the arbitral tribunal made, to which we have repeatedly appealed, and we do not agree.

As for the publication of a 152-page document, it is difficult to do so, as this document contains a very large portion of commercial confidential information. It contains a lot of technical confidential information and personal information of different people. Therefore, before we can legally clean up all this so that the remaining document can be made public, it will take time. So many times appealed to the Corporation and the Ministry of Economy, the joint statement on the proposal, which repeatedly refused " .

Posted by Aurora1 on the 28th May :-

Part 4
"The statement of the Oil and Gas Corporation was irresponsible for them to win the dispute. Unfortunately, we all lost: the Oil and Gas Corporation lost, the government lost, the company lost, and Georgia lost.

This is because there is no profit in such a dispute. Georgia has appeared completely differently around the world as a country that aggressively treats the 23-year-old largest American investor in the country, and by the way, we are not the only ones to this day. So there is no winning side here. All were affected. We all lost.

As for the content, the government demanded that we violate the conditions and we should be fined more than 320 million GEL. This was unfounded and of course the arbitral tribunal did not grant this request. The authorities also demanded that this agreement be revoked for us, which was also denied by the arbitral tribunal.

What the state arbitration ruled was that we should pay the Oil and Gas Corporation $ 200,000 in advance, which we have been doing for 23 years, and we have not denied that we will pay them this advance, and secondly, the areas where oil and gas exploration and We do not carry out extraction work, return it to us for what we have already done, about 3-4 weeks ago.

In all of the 42 million paid to the lawyers and experts in the world, and he wrote a story that could have such an aggressive attitude towards investors " .

On April 29, the State Oil and Gas Agency and the Georgian Oil and Gas Corporation issued a statement terminating the contract with Frontera and sending a message to the company. The head of "Frontera" states that the company continues to work. As for the prospect:

"Neither the decision of the arbitration nor the agreement of the" Oil and Gas Agency "has any right to terminate the agreement. We certainly continue to work. It is incomprehensible to us - if they are going to expropriate us and force us to stop investing, we cannot say today. It would be very foolish behavior. It will greatly damage the image of the country. I hope they don’t do that. However, they have neither the legal nor the contractual right to terminate the contract unilaterally . ”

Why didn't Frontera address the court itself when it first encountered difficulties with the state-owned company? Zaza Mamulaishvili's answer:

"Because it is very important for a businessman to have a good image of the country, the company, the shareholders, the funds to be interested in working and investing in that country. If the country has a bad image abroad, the shareholders will no longer be interested in coming to Georgia. Therefore, when we in this issue " .

As for Frontera's response to the claim of large sums of money from the state:

"We voluntarily withdrew the $ 3.5 billion lawsuit a year ago and then tried to reach an agreement with them. Now the company is not asking for any money. "

Cooperation between Frontera and the Georgian government began with an agreement signed 23 years ago:

"In 1997, we signed an agreement with the state to take the entire investment risk on ourselves to do the work, find and then extract oil and gas from these fields. The state has no obligation to invest any capital and most of the oil extracted, more than half of it belongs to the Georgian state completely free of charge. If all this fails, the whole risk of investing is ours.

Fortunately, our relationship developed very successfully. As a result of the $ 560 million investment, we have discovered 350 billion cubic meters of gas - this is in southeastern Georgia, mainly in the Kakheti region, as well as one and a half billion barrels of oil, which has been confirmed not only by our staff and scientists. Most of these stocks belong to the state. Less than half of the extracted oil and gas is the share of Frontera. Through this, the company must reimburse the invested investment and then see the profit.

The state has been profiting since the first day that Frontera started its work. We do $ 30-40 million a year.

Since 2013, our problems have reached completely new heights, it has become very difficult to actually work with the "Oil and Gas Corporation", the Ministries of Economy and Energy. The work and investment environment in which we found ourselves was deteriorating every day and every year . ”

Asked by RFE / RL what the essence of the deteriorating relationship between Frontera and the state corporation was, Zaza Mamulaishvili said:

"The main reason for this complication was that we were able to drill very successfully and then test the gas wells. As soon as we informed the Oil and Gas Corporation, the Ministry of Energy, we expected them to be very happy, but this did not happen.

It was then that the most important complications began, that after this successful test, when we decided to connect one of these gas fields to the main pipeline, the state did not give us permission to build the pipeline, even though it was legally and by contract. After long communication, we were not allowed to speak until the members of Congress intervened and communicated with the state, the ministry, and the prime minister. Only then will we be allowed to build the pipeline. That was in 2014. Before that, we had been trying to reach an agreement for a year.

In 2014, as it turned out, we built a 16-kilometer gas pipeline. After that, we were no longer allowed to carry our own gas in the gas pipeline we had built. We were not given this license until we were contacted by Washington until members of Congress addressed the Prime Minister. It was a long, bureaucratic, completely unjustified refusal. Whatever the technical or commercial reasoning, the answer was simply "no" and we could not miss this "no" until communication from Washington with the Prime Minister of Georgia took place, and only then did it start from scratch.

Posted by Aurora1 on the 28th May :-

Part 2
Frontera Research also operates in several countries through subsidiaries. In Georgia, it is represented by several subsidiaries. These include Frontera Riverside Georgia Corporation, Frontera Rissors ULC and Frontera International Georgia. It is a fact that today the public interest in the company was aroused by the letters of American politicians and the lawsuit filed by the Georgian government in the Stockholm arbitration. Zaza Mamulaishvili, co-founder, president and CEO of Frontera Rivers, told RFE / RL:

"I would like the name 'Frontera' to be more widely known for the excellent results we have achieved by investing $ 560 million, and we have created this tremendous value for the country. This is to some extent probably our fault, because we have always thought that we would not produce advertising products because we are looking for and extracting oil and gas. Therefore, we thought that it would not be appropriate to be overly informed about our activities, as our partner, the State Oil and Gas Corporation, could have covered our success more widely over the years. We thought that would be the case because the true partnership was just that.

For example, in 2004 we were the first company in the history of Georgia to capitalize on the stock market with one of the projects in Georgia, we did the listing for the first time and it was about $ 100 million back then. This amount was entirely spent on the Georgian investment project. With this, the international stock market of the world capital got acquainted with Georgia. Then with this money we were very successful in drilling, seismic, research and very large inventories of oil and natural gas.

It was such a great success not only for the company, but also for the country, we thought our partner in Georgia was more positive.

We could do that too, and we talked about it all on the London Stock Exchange. As it turned out, it was not enough for the Georgian society to be better informed . "

Posted by Aurora1 on the 28th May :-

RE: Zaza
Title
Unfortunately, we all lost: the Oil and Gas Corporation lost, the government lost, the company lost and Georgia lost

Frontera is one of several companies sent by American politicians to Georgia or the United States in recent years, along with several other American companies, as an example of business harassment in Georgia. The same was true of the letter of May 15, 2020, whose authors, senators: Ted Cruz, John Cornyn, and Congressmen: Jodi Arrington and Marquine Malin, address US Secretary of State Mike Pompeo and Finance Minister Stephen Mnuchin. In particular, in the letter you will read:

"Over the past year, foreign direct investment in Georgia has fallen by almost 50% as taxes and bureaucratic barriers for Western businesses have increased.

These problems of good governance directly undermine the ability of American companies to work and strengthen our relationship with Georgia. They have invested more than $ 500 million in oil and gas exploration. Recently, Frontera has become a target of restrictive regulations and bans, and now the Georgian government is in danger of expropriation. In 2019, another American company, Conti Group, was expelled from the Anaklia Port Construction Consortium, which suspended the project .

The authors of the letter ask for information on how much it is:

The current Georgian government, led by the Georgian Dream, is trying to drive out the US businesses that are investing in Georgia's economy and future investment;
Such actions are motivated by geopolitical considerations, including Bidzina Ivanishvili's alleged links to the Russian government;
Black Sea Port Activities for a Critically Important American Interest in Threatening Georgia, including:
The premeditated expulsion of American companies from the port project is connected with the protection of Russia's influence on the ongoing processes in Georgia.
Deficiencies in the implementation of US sanctions, in particular, in the context of ports.

Posted by DomFok on the 28th May :-

Zaza
Can somebody translate please it’s a big article, I’m on my phone. Thanks

https://www.radiotavisupleba.ge/a/%E1%83%96%E1%83%90%E1%83%96%E1%83%90-%E1%83%9B%E1%83%90%E1%83%9B%E1%83%A3%E1%83%9A%E1%83%90%E1%83%98%E1%83%A8%E1%83%95%E1%83%98%E1%83%9A%E1%83%98-%E1%83%A4%E1%83%A0%E1%83%9D%E1%83%9C%E1%83%A2%E1%83%94%E1%83%A0%E1%83%90%E1%83%A1-%E1%83%A1%E1%83%90%E1%83%A5%E1%83%9B%E1%83%98%E1%83%90%E1%83%9C%E1%83%9D%E1%83%91%E1%83%90%E1%83%A1%E1%83%90-%E1%83%93%E1%83%90-%E1%83%A1%E1%83%90%E1%83%AE%E1%83%94%E1%83%9A%E1%83%9B%E1%83%AC%E1%83%98%E1%83%A4%E1%83%9D%E1%83%A1%E1%83%97%E1%83%90%E1%83%9C-%E1%83%93%E1%83%90%E1%83%95%E1%83%90%E1%83%96%E1%83%94/30640147.html

Posted by Jonathansxx on the 28th May :-

RE: New GOGC statement
Sounds like they're getting panicky,
"As a consequence of the fact that Frontera refuses to disclose the arbitral award so far, and since Georgian side refrains from unilateral action, we will limit ourselves with just brief information around the main postulates of the award in order to protect the state’s investment image and to satisfy the interested parties: "
and also worried about their image and upsetting the SMs.

Posted by Madpunter on the 28th May :-

Johnathansxx - IMHO the more significant statement was :-
' Particularly, the Arbitral Tribunal ruled that FRGC committed material breach of the PSC, which is a ground for terminating the contract.'
They don't mention terminating the contract in the statement, only that the breach is a ground for terminating.

Posted by Looed on the 28th May :-

MadP Please take a look at the GOGC website and the statement dated (I think) 29/4 - that states the breach and the breach is the reason for contract termination. The termination has already been applied. Cant copy as just heading out.

Posted by Madpunter on the 28th May :-

Looed - That's before all the political pressure from Uncle Sam. This statement might be their way out while 'saving face'.

Posted by JRjnr on the 28th May :-

Material breach versus repudiatory breach...
That is the key point and any legal expert will confirm this.
$10bn is within reach..

Posted by Looed on the 28th May :-

The press are picking up on it - its late night for me so hope I wake up to more developments in the morning

https://agenda.ge/en/news/2020/1677 (in English and a rehash of the GOGC statement)

Posted by Welloiled on the 28th May :-

RE: Frontera companies
Mole, when looking through the PWC Consolidated Financial Statements December 31, 2012 and 2011, I noticed this on page 7:
“Frontera Cayman simultaneously exchanged $121.6 million aggregate amount of the Company’s 10% convertible notes payable plus accrued interest, for (i) 1,593,853,570 Frontera Cayman Shares, and (ii) $18.2 million aggregate principal amount of new 10% convertible notes due 2016 issued by Frontera Resources Holdings, LLC, a Delaware limited liability company and a wholly owned subsidiary of Frontera Cayman. These convertible notes payable were exchanged for
shares of common stock at a price lower than the conversion price at inception of the notes. The difference in the value of the original conversion price to the actual conversion price was recorded as inducement expense in the statement of operations of approximately $99.4 million. Frontera Cayman also exchanged $9.2 million principal amount plus accrued interest of its related party notes payable for 141,515,879 newly issued Frontera Cayman Shares pursuant to note exchange
agreements”.
https://fronteraresources.com/wp-content/uploads/2017/08/Frontera-Resources-Corporation-and-Subsidiaries-2012.pdf

I also noticed the reference to Frontera Resources Holdings, LLC, a Delaware limited liability company and a wholly owned subsidiary of Frontera Cayman. I have managed to find only limited information on it and another Delaware company, Frontera Resources Corporation; unfortunately I am unable find out if the companies are still active or not.

Frontera Resources Corporation, No. 2714496, Formed 04/02/1997
Frontera Resources Holdings, LLC, No. 5015274, Formed 25/07/2011
Both addresses: 251 Little Falls Drive, Wilmington, New Castle, DE 19808. Phone: 302-636-5401

I notice that the Texas FRC was registered 3 months after FRC Delaware company on 08/05/1997 but the Texas FRH was registered only a week after FRH Delaware on 01/08/2011. A day after on 02/08/2011, FRC Texas completed a merger with and into a new Cayman Islands exempted company (“Frontera Cayman”), with Frontera Cayman being the surviving entity (page 6 of the PWC report). On page 7 it says:

“By operation of the Merger, each share of common stock of the Company (i.e. FRC) has been converted into and represents the right to receive either (i) one Frontera Cayman Share (the “Stock Consideration”) or (ii) £0.04 ($US0.065) (the “Cash Consideration”). As a result, all stockholders of the Company received the Stock Consideration, except for US stockholders who were not “accredited investors” as defined in Rule 501 under the US Securities Act of 1933, who received the Cash Consideration”.

I don’t know if this is valid but if 1,593,853,570 (Frontera Cayman Shares) is multiplied by $0.065 it comes to $103.6m. Could this link to the $100m FRGC’s outstanding debt owed to Frontera Resources Corporation or has lockdown finally got to me?

Posted by Looed on the 28th May :-

RE: New GOGC statement
Information Regarding Frontera
FRGC is a Cayman Islands shell company, contractor that committed material breach of PSC thereof, refusing to pay its Georgians workers. The company is facing a number of lawsuits in the US and Cayman Islands. FRGC withholds its consent to disclosure of the April 17, 2020 arbitral award rendered by the arbitration tribunal in the dispute initiated in Hague Permanent Court of Arbitration based on the UN-sponsored arbitration rules (UNCITRAL) opting, instead concealing its loss in the arbitration by patently false interpretations and unsubstantiated allegations. In 2019, Frontera Resources Corporation, an ultimate parent company of FRGC through its another Cayman Island subsidiary, Frontera Resources Caucasus Corporation, was delisted from the London Stock Exchange’s AIM market.

Background on Contractual Dispute and Arbitration
On January 15, 2018 GOGC and SAOG commenced arbitration proceedings against FRGC by filing a request for arbitration with the Hague Permanent Court of Arbitration with respect to a dispute arising out of breach by FRGC of its obligations under the PSC. The PSC provides for disputes to be resolved in accordance with the parties’ agreement before a neutral forum under the UN-sponsored arbitration rules (UNCITRAL). This dispute resolution mechanism is a fundamental tenant of the rule of law.
On April 17, 2020, the Arbitration Tribunal rendered its final award. It ruled unanimously that Frontera had committed a material breach of the PSC and ordered FRGC and Frontera Resources US LLC (a codefendant in the proceedings) to pay to the claimants the amount of mineral usage tax and vast majority of the costs incurred by the claimants in connection with the arbitration, which equals to approximately US $6 million in total.

From the beginning of the proceeding, GOGC committed to honor and respect any award rendered by the Arbitral Tribunal, and to refrain from unilaterally exercising rights under the PSC pending the final arbitration award. Moreover, the original PSC had a 10-year exploration period that was extended twice to a total of 20 years, which expired in November 2017, thus triggering FRGC’s obligations to relinquish the exploration territories located outside the existing Exploitation/Development Area. The allegations as if SAOG and GOGC were eager to take control of these exploration territories are thus nonsensical.

https://www.gogc.ge/en/article/a-few-necessary-explanations-for-the-outcome-of-the-arbitration-dispute-with-frontera-/485

Posted by Looed on the 28th May :-

New GOGC statement
Georgian Oil and Gas Corporation (GOGC) and the Georgian State Agency of Oil and Gas (SAOG) call on Frontera Resources Georgia Corporation (FRGC) to refrain from unscrupulous actions, disseminating misinformation around the actual outcomes of the arbitration proceedings, and hence politicizing the legal dispute. In addition, Frontera must respect the award of the Arbitral Tribunal—the dispute resolution institute agreed by the parties—and ensure its enforcement. In order to protect society and interested parties from misunderstandings, or misleading information, we call on Frontera to consent to the revocation of the status of confidential document for the arbitral award and consequently to its disclosure.

As a consequence of the fact that Frontera refuses to disclose the arbitral award so far, and since Georgian side refrains from unilateral action, we will limit ourselves with just brief information around the main postulates of the award in order to protect the state’s investment image and to satisfy the interested parties: The Arbitral Tribunal supported legal position of the Georgian side and satisfied a vast majority of the claims made by GOGC and SAOG. Particularly, the Arbitral Tribunal ruled that FRGC committed material breach of the PSC, which is a ground for terminating the contract. As a result, FRGC must reimburse GOGC with approximately 6 million USD for mineral resources usage tax and for legal expenses resulting from the arbitration proceedings.

It is essential and regrettable, that instead of immediate award enforcement, Frontera launched a misleading and State image damaging information campaign that involved basically misinforming US Congress members, friends of Georgia, who relied on the information provided by the company, and were fairly outraged by the actions of an ally like Georgia infringing on the interests of an American company. This reaction would have been understandable if the information provided by Frontera had not been false.

It is unfortunate that Frontera acts as an unscrupulous business entity. However, it is doubly unfortunate and extremely harmful that its dishonesty damages the partnership between Georgia and the United States, as well as hinders Georgia’s vital process of rapprochement with European Union and NATO and sabotages the State’s foreign policy. The Georgian side once again calls on Frontera to respect the April 17, 2020 award of the United Nations-backed Hague Permanent Arbitration Court and consent to its disclosure.

Posted by Looed on the 28th May :-

Mother Russia might be making a bit of a mess
Both these articles are in English. Neither mentions Georgia specifically.

"How Russia is losing its oil and gas influence across Eastern Europe"
- https://www.offshore-technology.com/features/russia-gas-oil-influence-eastern-europe-pipeline/

This one talks about the Russian strategy of using debt as political leverage.

"Russia’s loan to Moldova (and its geopolitical strings)"
https://www.ridl.io/en/russia-s-loan-to-moldova-and-its-geopolitical-strings/

Posted by Jonathansxx on the 28th May :-

Looed. This article gives a " scores on the doors " view of the chances for a free and equal democratic process in Georgia.

https://freedomhouse.org/country/georgia/freedom-world/2020

Posted by Looed on the 28th May :-

Pt.2
The Georgian Dream failed to properly assess the situation, and the West's harsh response came as a complete surprise to them. Strict assessments by European politicians and US congressmen followed. They have made it clear that the March 8 agreement is bipartisan and that in addition to the reform of the electoral system (120 proportional and 30 majoritarian seats in today's 77/73), imprisoned opposition figures must be released. The term ‘political prisoners’ was first used with regard to them.

The Georgian Dream chose to retreat. In order to defuse the situation, President Salome Zurabishvili said on May 15th that Gigi Ugulava and Irakli Okruashvili had been pardoned and that they had been released immediately. In order to not lose face, the Georgian Dream initially stated that Zurabishvili made the decision to pardon the prisoners without their consent and did not agree to the release of ‘arrested criminals.’ This seems to have upset President Zurabishvili, who said his decision to pardon Ugulava and Okruashvili was not a surprise to the government and agreed with Ito Bidzina Ivanishvili, Giorgi Gakharia and Archil Talakvadze. This caused another inconvenience to the Georgian Dream, as they had previously claimed that they knew nothing about the president's decision. The release of two opposition politicians has raised hopes that the March 8th agreement will finally be implemented and that better conditions will be created in Georgia for democratic elections, although many issues remain unresolved and, as it turns out, new problems may arise.

The opposition negatively assessed the legislative initiative registered by the 6 pro-government parliamentarians on May 19th, which allows that without the consent of the parliament, the government will be able to take measures on transportation, economic activity, property, collection, labor and other rights. The initiators of the bill demand its immediate adoption, while the opposition considers the possibility of carrying out the restrictions characteristic of the state of emergency according to the will of the government as a step towards authoritarianism and unconstitutional. It becomes even more dangerous ahead of the upcoming parliamentary elections. This issue will probably be one of the main topics next week.

The government is feeling comfortable as the opposition’s activity was limited in the state of emergency, and on May 26th the state of emergency has ended. However, this year’s June 20th, marks a year since the event, which turned out to be a somewhat turning point for the Georgian political processes. "

Source - http://www.messenger.com.ge/issues/4648_may_27_2020/4648_edit.html

Posted by Looed on the 28th May :-

Article -"Western pressure has increased the chances of democratic elections"
Pt.1

FRR gets a mention - this site was one of the first to point out the discrepancies between GOGC / FRR statements

"Demands from the West for the release of political prisoners and the full implementation of the March 8th agreement have put the Georgian Dream in a difficult position and changed its position. It was the Western pressure that proved to be an effective factor in boosting the democratization of elections in Georgia.

A few days ago, the agreement reached between the government and the opposition on March 8 seemed to be in a deadlock. Authorities categorically denied that on March 8, they had promised to release the opposition members I.Okruashvili, G. Ugulava and G. Rurua's, while the opposition claimed that it would not support the constitutional changes without the release of the prisoners. Archil Talakvadze, the Chairman of the Parliament, stated this position of the Georgian Dream on May 11th. On May 13th, the United Opposition reiterated that it would not support constitutional changes without the ‘release of political prisoners.’

The intervention of the Western mediators was still necessary, and the Georgian Dream itself provoked it when the mediating diplomats were asked to negotiate - saying that the March 8 agreement did not provide for the release of anyone. The facilitators of this agreement did not hesitate and in a joint statement issued on May 11, called on the parties to fulfill both parts of the agreement for ‘a successful implementation.’ In the May 12th statement, Senator Rish said on Twitter that he hoped Georgian political parties would fully comply with the March agreement, including the release of political prisoners and progress on the new electoral system.

The mention of ‘political prisoners’ has caused a great stir in Georgia, the opposition has been encouraged, and the government has put its desire to argue with its Western friends on the basis of misinformation. Meanwhile, on May 15th, it was announced that US Senators Ted Cruz and John Cornyn, as well as Congressmen Jody Arrington and Marquine Malin, had sent a letter to Secretary of State Mike Pompeo and Finance Minister Stephen Mnuchin. In the letter, concerns have been raised about the Georgian government's ties with US enemies. They also accused the Georgian government of expelling American businesses and cited companies such as Frontera Resources and Conti Group as examples. In the letter, US senators and congressmen noted that “Georgia's ties with America's hostile rivals and enemies, which run counter to our geostrategic and business interests” require a serious response from the federal government.

Posted by Welloiled on the 27th May :-

RE: Frontera companies
Hi Mole, Frontera's corporate structure is like a set of Russian dolls! Its frustrating that the bulk of the documents are in Georgian.
I note in the letter dated 15/04/2019 to GOGC, it guaranteed FRUS "has the technical and FINANCIAL ability to perform the obligations to be assumed by it under that PSC".

Posted by Welloiled on the 27th May :-

RE: Frontera companies
In a letter dated 15/04/2019 to GOGC (signed by ZaZa for FRGC and Luis Giusti for FRUS) it refers to the Production Sharing Contract and Refinery Study (PSC) entered into on 25/06/1997 by and between FRGC, The Ministry of Fuel and Energy of Georgia and The State Company Georgian Oil, as amended. It says “ Please take this letter as notice pursuant to Article 27 of the PSC that on 13/04/2019, Contactor assigned 100% of its interest in the PSC and the corresponding ownership interest in the Operating Company to Frontera Resources US, LLC, a Texas limited liability company, an Affiliate of Contractor and a wholly-owned subsidiary of Frontera Resources Corporation. Pursuant to Article 27 of the PSC, FRUS hereby declares and guarantees that: (a) It has the technical and financial ability to perform the obligations to be assumed by it under that PSC; (b) As to the interest assigned to it, accepts and assumes all of the terms and conditions of the PSC.” Note, I think there is a spelling mistake as Affiliate of Contractor should be Affiliate of Contactor.

Gipps51, the Farmout Agreement is dated 13/04/2019 and was presented to Lakesia Brent (Notary Public, State of Texas) and executed by Giorgi Zabakhidze (FRGC Director) and Luis Giusti (FRUS Manager). The Apostille also bears the signature of SN and the FA those of GZ and LG.

Posted by Moleinahole on the 27th May :-

Keep going and posting well oiled your reading the documents I was perusing the other week. We should have tapped this area in the past as it's got alot of interesting stuff in there.
Your latest post is high lighting the affiliate connection. If FRR us is affiliated it should not need GG approval for the transfer per section 27 of the PSA only written notification which is what that is. That doc and the others in that set are the response to GG not accepting the registration. If you keep going you will start to pick up the FRR US registration of a foreign branch subsidiary. Also attempted to be blocked at registration. When Zaza talks of obstruction in these transactions you can see some evidence of it.

Posted by Welloiled on the 27th May :-

On 04/06/2019 Maples certified that FRGC (Incorporation Number 72227) based solely on the Register of Members of the Company maintained at the Registered Office, the issued share capital is $100 and the shareholder is Frontera Resources Caucasus Corporation (IN 97554, FRCC). The IN of Frontera International Corporation (FIC) is 71338 and for Frontera Resources Corporation (FRC) is 256380. Based solely on the Register of Members of FRCC maintained at the Registered Office, the sole shareholder of FRCC on 13/04/2019 was FIC. Based solely on the Register of Members of FIC maintained at the Registered Office, the sole shareholder of FIC is FRC.

Posted by Moleinahole on the 27th May :-

RE: Frontera companies
Apart from the $100m the rest fits with what was already known.

The $100m is a puzzle. The accounts are consolidated group accounts so its hard to tell which bits have been consolidated from which subsidiary. But the $100m is way higher than last set of accounts when we owed $40m or $50m at worst 2 years later.
To add $60m of debt would be inconceivable.

Is the amount matching the Durham amount a coincidence? If they had obtained a loan then they would be sat on the cash if they had drawn it down.
Doesn't make alot of sense to draw down the lot. So I'm not sure what to make of it.

I am assuming of course that FRR us is part of the group structure and wholly owned by Frontera.

Posted by StarRage on the 27th May :-

Tsbs, the company has $100m debt according to the documents. Last set of accounts we had $40m debt so over the last 2 years we’ve increased debt by $60m. Most likely explanation is they got a loan of $60m , so we would have up to $60m cash but $100m debt, depending on what they’ve done with the $60m.

Posted by Moleinahole on the 27th May :-

The group will have pushed money to Frontera Georgia and down into Frontera Eastern Georgia. It's near impossible to work out what is where in the subsidiary.
The $30m bond notes were issued I thought by Frontera international a separate subsidiary secured on the shares in Frontera Caucasus and ultimately Frontera Eastern Georgia. So the $30m bonds makes little sense as a debt of FRR US as part of a $100m. The vendors $10m being in Frontera Georgia makes sense as vendor debt run up in Georgia. The YA preference shares is at the higher group level as well.
So it could be an accounting book entry for prior sunk costs spent in Georgia that is effectively in the cost recovery pool. But if so that should be higher nearer $200 or $300m.
So yes none the wiser really what it represents. Too small for the cost recovery, too big for the vendor debt and the main debt is in another company.
Bit of a mystery. You would think if you got a loan and couldn't use Caucasus company then Frontera Georgia would be the place if you wanted to secure and move it with the shares in the PSa.

First indication that there could be something else going on but will be difficult to find more. To get out of this it's always required an injection of funds to handle Outrider and the arbitration resolving.

Posted by Welloiled on the 27th May :-

RE: Frontera companies
The $100m figure was in clause 6.3 of Article 6 of the Farmout Agreement so I’ve typed out the full text as it also states the obligations of FRUS to be:
6.1 FRUS shall assume and timely pay from the Effective Date, as they accrue 100% of FRGC’s share of Costs and Expenses of the Minimum Work Program until the Minimum Work Program is completed.
6.2 FRUS shall in its performance of its obligations hereunder and in accordance with the PSA, timely satisfy all milestones as agreed in writing between the Parties or as otherwise provided in the PSA, and shall, in any event, complete the Minimum Work Program within five years following the Effective Date.
6.3 FRUS shall assume, pursuant to mutually agreed documentation as between the Parties no later than 30 days following the Effective Date, $100,000,000 of FRGC’s outstanding debt owed to Frontera Resources Corporation.
6.4 FRUS shall assume any and all obligations of FRGC arising out of that certain Farmout Agreement (including its annex) antered into between FRGC and Varang Exploitation Limited on April 9 2014.
6.5 FRUS covenants to, at all times, perform the Minimum Work Program in strict accordance with all applicable Codes and Standards.
6.6 FRUS shall pay to FRGC 5% royalty on all production from Block 12 for so long as FRUS is entitled to its sharing allocations provided in Article 7 below.
6.7 FRUS shall assume all liability for plugging and abandoning activities in Block 12.
6.8 FRUS shall assume the defence of, and shall bear all costs, expenses and other potential liabilities relating to, any litigation or arbitration proceedings involving FRGC or its Affiliates with respect to performance by FRGC or FRUS of its obligations under this Agreement or the PSA. FRUS also hereby accepts all rights, benefits and clams of FRGC with respect to any and all of the foregoing matters. The assignments and assumptions provided for in this Article 6.8 shall cover any and all costs, expenses, liabilities, rights, benefits or claims at any time or accruing whether prior to, as of or after the Effective Date.
Article 7 Sharing of Cost Recovery, Profit Oil and Costs and Expenses.
7.1 The Cost Recovery Petroleum and Profit Oil produced under the PSA within the Farmout Area, as well as Costs and Expenses pertaining to the Farmout Area, shall be attributed and allocated to FRUS and FRUS shall be entitled to participate in the reimbursement of Costs and Expenses from Cost Recovery Petroleum relating to the Farmout Area as if FRUS had owned an undivided Participating interest in the PSA from the inception of the PSA.

Mole, I too found the $100m figure odd as it suggests that at some point FRGC had been loaned at least $100m from the Frontera Resources Corporation (0011520006, first registered on 08/05/1997) which I assume to be the parent company and is identified as the Registered Agent Name of FRUS.

Posted by EkXoc on the 27th May :-

RE: Frontera companies
Nice summary thanks welloiled.
This part caught my eye
FRUS shall assume, pursuant to mutually agreed documentation as between the Parties no later than 30 days following the Effective Date, $100,000,000 of FRGC’s outstanding debt owed to Frontera Resources Corporation.

Thats a large number
£100m owed to FRR?

Posted by Moleinahole on the 27th May :-

Well-oiled so you have concluded same as myself that the license and all the debt is with FRR US.
They left the 5% production in Frontera Georgia for when FIT got that via taking control of Frontera Caucasus.
So apart from the additional possible investment from Green which to me also sounds like a production share royalty there remains no evidence of a further transfer and the PSA pending possible termination by GG or repudiation in the arbitration itself or further court action via Outrider remains in FRR US.

100 million is however an nteresting number.

Loan notes should be about $30m. We had other debt.
$2m preference shares for YA. and about $10m of other debt to vendors etc.

So balance would be $60m to make $100m. The same amount as was proposed by the New York fund in 2018.......

That is odd.

Posted by Welloiled on the 27th May :-

Frontera companies
From going through the documents, this is what I understand to be the situation with Frontera companies.

Leva Bakhutashvili and George Janiashvili were appointed (26/04/2019) as the lawful attorneys with powers and authority for Frontera Resources US, a Texas limited liability company 8025586654 (FRUS) to initiate and complete formalities required by Georgian law relating to the transfer of ownership title to 50% of share capital of Frontera Eastern Georgia (ID 204905674) (aka Istern; FEG or FIG, address: Georgia, Dedoplistskaro, Gorgasali St., ?15) from Frontera Resources Georgia Corporation (a company organized under the laws of Cayman Islands, incorporation number 72227, FRGC) to FRUS. Also, to undertake any and all acts and execute any and all documents to effect the transfer of ownership title to 50% share capital of FEG from FRGC to FRUS and to duly register it under the laws of Georgia.

On 18/11/2019, FEG was reincorporated with 50% owned by Frontera Risors (or Risoriz) Georgia Corporation, CR 72227 / USA (address Tbilisi, Vake-Saburtalo district, Paliashvili str., No12) and 50% owned by the JSC Georgian Oil and Gas Corporation (ID 206237491); Zaza is the General Director. Frontera Risors Georgia Corporation, CR 72227 / USA appears to me to be the company registered in the Cayman Islands. FEG’s areas of activity are the search and extraction of oil and natural gas.

Frontera Resources US LLC's Branch Office in Georgia (ID 405339637, aka Frontera Risorsiz Yu) was registered 11/06/2019 (address Georgia, Tbilisi, Vake District, Paliashvili Str., 12A).
Frontera Risorsiz Georgia Corporation Branch in Georgia (ID 204931431, address: Georgia, Tbilisi, Vake-Saburtalo District, Paliashvili str., No12) appears to have been liquidated (or is in the process of) on 11/05/20.

The farmout agreement of 13/04/2019 FRGC assigned to FRUS an undivided 100% Participating Interest in the PSA with respect to the Farmout Area (Block 12) and its entire Operating Company interest. FRUS shall pay to FRGC 5% royalty on all production from Block 12 for so long as FRUS is entitled to its sharing allocations. FRUS shall assume, pursuant to mutually agreed documentation as between the Parties no later than 30 days following the Effective Date, $100,000,000 of FRGC’s outstanding debt owed to Frontera Resources Corporation.

FEG’s address is in Dedoplistskaro which lies just to the north east of Taribani (80 km2), Oil: 1,033 MMbbl (OOIP) of which 155 MMbbl is recoverable; Natural Gas: 4.6 TCF (OGIP) of which 3.2 TCF is recoverable.

There are 5 Frontera Resources companies registered in Texas (Texas SOS File Number): Frontera Resources Corporation (0011520006), Frontera Resources Holdings, Llc (0801460203), Frontera Resources International Llc (0802247983), Frontera Resources Ukraine Llc, (0802275570), Frontera Resources Us Llc (0802558654).

Posted by Looed on the 27th May :-

Thanks Mole - here is the link that shows ZM's affiliations. Not sure if it helps. I don't think the deja files are here but I am still going through it.

https://www.companyinfo.ge/en/people/101949