Member Info for Moleinahole

May 2017 Outrider security through FRCC to FRGC
Apr 2018 Hope proposes winding up. Zaza proposes $5m funding secured. Zaza completes oil sale with Green $5m -
unsecured. T45 flows and UD2 drilling coming up short of volume and inability to sell oil through Batumi.
June 2018 2017 Full year accounts and audit by PWC. Incorrect representation of Outrider interest and no mention of
Green. Ya preference shares sale restructured to reduce payment.
July 2018 Zaza amends Green oil sale – not sure if adds security default clause here. Security added at FRGC level
closer to asset than Outrider claim. T39 flows 329 bopd.
Sept 2018 FRR default loan interest with Outrider. Last set of interim 2018 H1 accounts – no mention of Green or Outrider
interest. YA attempt to bail out with massive short before the default known. 2 majors with MOU RNS
Oct 2018 FRR start Cayman fiduciary claim against Outrider/Hope and seek injunction over security.
Oct 2018 FRR amend Green oil sale a 2nd time increase to $10m.
Nov/Dec 2018 FRR announce New York fund as potential funder. Cayman court papers reveal Outrider security and interest arrangements resulting in delist of FRR from AIM as Nomad resigns.
Mar 2019 Green oil sale final month –contract not fulfilled. Cayman injunction lifts and case switches to California.
Apr 2019 Hope resigns. FRR start attempt to transfer to FRR US (note already technically in default to both Green and Outrider). Zaza signs transfer documents for FRR US. FTI brought in by Hope to enforce security. GOGC refuse transfer under section 27.3 due to lack of fund and technical prove.
Apr 2019 GOGC reject transfer and add to arbitration.
Q4 2019 FRR try and settle arbitration without going to Court – offer no defence. FTI become aware of Green security interest and potential links to Zaza. FRR try to get new funder in again- Zaza allegedly not helpful in effort.
Mar2020 arbitration rules against FRR. FTI up to this point had left FRGC alone and not interfered. FRR begin aggressive lobby to retain license. Covid force majueure declared by FRR.
Aug 2020 Zaza dismissed by FRR. Oil sales in period resumed. Prior Steve sends Zaza money from Covid reliefs prior to this date.
Mar 2021 FTI complete liquidation of FRGC and hand PSA to Green who fight to register transfer in court where Zaza represents FRGC. GOGC/SAOG initially approve transfer of PSA to Green no finance or technical submission evident (double standard). Then GOGC/SAOG start to challenge in court to block.

I suspect FRGC was being run by FTI after Apr 2020. Between Apr and Aug Zaza must have been working with 2 hats on – CEO of FRC (FRR controlled) and General Manager of FRGC (FTI controlled) and FEGL (FTI contolled). All along Green continued to gradually enforce the addendum to the Oil sales contract awarding them Block 12.

Oopsi what assignment. That meeting was obsessed with the Mou and majors possible deal that was the dangled carrot. Yet just over a week later they sign the Green assignment.
I don't even recall the interest or the default being discussed.
The FRR US assignment was April 2019 but the green one in the addendum was Oct 2018. As zaza signed both where are you thinking on it. By march 2019 he knew they had not met the contract and so the addendum came into force but still signed the FRR us transfer. Is that where your going?

Shatner you never ever default on secured loans. Period. The Green capital transactions and the interest arrangement on Outrider have occurred and not been disclosed to anyone and neither had the true nature of the arbitration. Those two pieces of information change everything in the absense of a plan to fund or bring in a partner. This has still delivered a large loss that I am seriously not pleased about. I want an explanation how Green got the asset for next to nothing.

Puddy will tell you I was concerned at the final meeting in Oct 2018 as I could not reconcile some of the items in the accounts. The items were not broken down in the unaudited half year accounts to explain what was happening.

Lets see how this cross examination plays out. Needless to say its not something I ever expected to be up at 1am watching.

Dulwich Service companies is the norm - wholly owned by the main company. This is a non issue - I hope the FRR lawyers know what they are doing here. They are talking about the issue of nominee holders and Dulwich we stopped paying the registrar before this FRR US event - so the ultimate owners of the shares would indeed not be easy to establish! The only interesting bit was the register even considering nominees is about 2000 strong. In other words the shares are clearly largely owned by PI London AIM investors like us.

Unless those companies received cash from oil sales they are a red herring. If you go on registry you will see FRR have other local company as a proxy for foreign entity. He is basically saying the FRR US Georgian entity was set up as part of the attempt to execute the FRR Us transfer. That makes sense to me.

The general line of linking family and friends together still has not quite overcome the circumstantial nature of the evidence presented so far. That's my view.

What however is breathtaking to behold is the former CEO of FRR talking the way he is. The key bit and his line seems to be that FRR lost FRGC when (he) defaulted and has no entities in competition in Georgia. Oddly the last exchange proves FRR still has an FRR US shell albeit with no asset. At some point he has clearly started to work most likely for FTI in these entities I would argue in direct competition with FRR. He is drawing fine lines between his roles as CEO of the different entities. Steve and his legal team seem to be struggling with the reality of what has happened.

Zaza has been able to segway through the mess he and Steve created with the asset in the pocket of a long time friend. The conversation tonight shows that the 25th April emails from Steve Cayman submission were accurate and that Levan did the paperwork on this Green deal. Zaza then was economical with the truth in telling Hope they had sold oil - he does not seem to have told him about the real nature of the transaction.

The real unanswered question is where did Green get its funding and how much was put in to FRR and why is it not in the accounts or not disclosed. Its very cute - but so far we have not seen that kiler direct link. Someone asked earlier about the original $5m offer from Zaza. Yes it around same time. Same amount but different means of getting the money in and secured maybe.

I am concerned Zaza here has been alot closer to FTI than shareholders would like. He does have a duty in an insolvency situation to creditors but he seems at best conflicted here. Shareholders have every right here to be angry. The employment contract arguments may carry some weight but getting the asset back is another matter altogether.

Never knew Levan was that close to Zaza!

I've never been keen on this company paper chase through the registry around these companies. We will see where it goes but the FRR US company looks like it was a US subsidiary thing - thats not uncommon registering those sort of entities - he is saying Steve knew. The trading one is different. Again we knew that.

Zaza explanation makes sense to me.

2000 shareholders....

Jonathan that was my assumption and most likely reason he appeared in court in March 2021. But someone posted from part of the case I missed other night he had been removed Dec 2020. If he was kept on all the way through he has worked with FTI to see the Green transition over FRR shareholders. He is playing games of convenience - the non transfer remains the issue.

OOpsi as discussed other day that seems to be the defence angle - FRR had no operation in Georgia after they lost it by default.

How and who employed him in FRGC and FEGL if FTI dismissed him in Dec and FRR in august in Jan 2021.

Star I agree its largely circumstantial rather than direct so far on the Green to Zaza links. The dates are no coincidence and its all a bit too cute. It was at best desperate and likely reckless to enter into the agreement with a security attached but we are talking about something that started in April 2018 and was still going strong in October 2018 - so developed over time. It was certainly sailing close to the wind in breaching the PSA and the Outrider Mortgage. Whether the proximity sticks and exactly what it proves remains to be seen. Appearing for the company in March 2021 in court that really was a bit much if he was moved on by FTI in Dec 2020 and FRR before that in August.

The non disclosure, overall context and the possible disappearance/non use of the funds is a completely different matter. The consequences of the arrangement on shareholders are plain to see.

So far for me the hearing has demonstrated yet again a badly run and dysfunctional company. The buck for that starts and stops with the board.

Critical session in FRR history coming up - could be one of the last chances to hear what has happened here. Stiff drink needed. Could do with a recap on exactly what they are accusing each other of here and what they are trying to achieve. Zaza was suing Steve for breach of duty over Cornerstone and covid payments (not gross incompetence and negligence which seems more provable to me) and not having his wages paid. Steve counter suing over the employment contract to prevent him trading in competition presumably in Georgia through Green.

The non completion of the transfer to FRR US, denial about the Georgian position from the arbitration and the continued lack of acceptance of the reality that the default caused the loss of the asset is almost surreal.

Oopsi how will a judge rule on this mess? Can they find fault against both sides or are they likely to come down on one side or other? I can't see they want to get involved in the fall out of the arbitration, or liquidation following debt default matters or get drawn into challenging the Georgian rights around the PSA. Whats your thoughts?

Indeed. Who knew and what money changed hands and and where is it is what I want to know. We have never had a set of accounts for that period covering H2 2018.

A CEO has to be able to run day to day operations and oil sale deals are normal bread and butter CEO stuff. But to do so to an unknown entity you may have connections with and to assign over a valuable asset at the times it has been done looks very wrong. Had the money been used to pay interest or get the Baker Hughes arrangement going but they were not even paying staff and contractors. So was it ever received or has a paper liability been created in the contract which as seems then enabled the asset to be taken from shareholders? Its like something from victorian business practices that Charles Dickens would recognise - ala Uriah Heap.

I would not be surprised if live coverage is not on later........I never imagined anything like this with FRR. The plot and sub plots are both interesting and disturbing.

Right some numbers first:

$5m annualised would be around 274 BOPD of production at $50 a barrel. $10m would be 550 BOPD.

The last arrangement ran from Sept 30 2018 to 21st March 2019. So 6 months to do either of those amounts would be a stretch. The production flow rates have been withheld from shareholders consistently. Anything around 300 BOPD would have been very credible in Q4 2018 - T39 should have flowed well and Dino, Niko and T45 were also flowing although less than hoped for. So first question is what was the under performance, where did any money go.

To bet the house on production around 500 BOPD or more would have been very risky given experience at T45.

Time wise the first deal was signed day Zaza was sparing with Hope threatenning to liquidate but at a time they knew volume was low at T45. The 2nd was signed at time of T39 result in July when it flowed 329 BOPD. The 3rd was signed same week as Cayman action started.

So had volume increased or remained stable it was not a bad plan.

The question is:
1. why the assignment clause - not reported to nomad, shareholders or SAOG or GOGC.
2. what happened to production and where is any money.

To sign such a contract if you knew volume would drop or could not deliver was reckless. Why the change from $5m to $10m? It seems to coincide with the Cayman action with outrider.

Had they kept the injunction in place in Cayman and either used the funds to buy time or drill I could understand it. It could have worked. By not performing it has created a liability that has robbed creditors and shareholders of value. Why was it not performed is the question - unpaid staff or low flow rates?

Don't forget at this time FRR still had 1bn shares in treasury to issue.

That funding path was done behind Outrider back - Hope never blocked it as he could not have known about it.

Linandy yes FTI puzzle me still.

How close are they to Outrider.

They left Zaza in place according to yesterday court action till Dec 2020 running things in Georgia. But removed Steve. We knew that from the original arbitration document.
So Zaza appearing in march 2021 looks even more strange if he is indeed connected to Green. He could appear as a witness but not for the company. So FTI role in that case requires close scrutiny. We know at the same time they were finalising the liquidation so it's inconceivable they were not closely involved or should have been. It's too much of a coincidence timing wise. Green becomes preferred liquidation beneficiary and the court case to force the transfer.
Gogc simply then rubber stamp again feels odd.

I'm very interested to hear Zaza now cross examined on this transfer and how close he has been to all the parties. There is I feel a crucial missing piece of the links here that should come out in this case.

FTI and Outrider must know more.

Other thing I picked up is that this deal from 2019 for funding. Time wise they need to be careful with that. I presume the former legal was Levan - though it's possible it was another. If so he was of course not available to present evidence on another Texas case around that time involving Outrider as he no longer worked for company. If it was him how did he have access to 6000 pages of documents? Was he named in that passage of examination. Was he still working on the side?

From the Steve email bundle from Cayman I think Levan must have drawn up the Green contracts as he was working on papers on 25th April 2018 same day the deal was signed.

I think Levan is another who knows alot about what has been going on.

Ok that could be because of the California case with Outrider. I guess they have to be careful in that area as it's likely to come up again in that case if it ever gets to court. Outrider must be over joyed at the trove of evidence being generated here.

Unless there is some links between Zaza and Outrider which would be truly shocking given their history I would guess Green is a Zaza initiative.

However, we still don't know what Outrider have got out of the liquidation.

One possibility would be MND taking it on from Green - I had always thought MND would come back via Outrider as they are the most likely partner for them to sell too due to past history. MND I think also have some work links with GOGC as well.
The green raid ahead of others remains puzzling and seems to have some sort of support from FTI. Zaza cross examination will be interesting. What day/time?

Another thread from the past. This takes us back to 2014-15. Outrider seemed to be looking to introduce MND. FRR then found the untraceable Varang as a partner instead to counter Outrider. Was any more of this back history discussed before they hit the off button?
What was the context MND was mentioned?
To this day we do not know the truth around MND offer, Varang exit and now Green.

It would be interesting to see any links to either of those entities.

What a mess.

So Zaza lawyer wanted something concealed around Green that they don't want. Shareholders to know that was deemed problematic for their client to the point that they prefer to continue to deny it to shareholders.

Interesting.

NJames what was the date of the 2nd amendment that placed a security on the asset?

Evening folks. Greatest showman on the telly and Steve in the box. Missed tonight's action with work and family. Can someone confirm Steve knew about Green and more importantly what he knew. As it's missing from 2 sets of accounts and clearly material that would be shocking. Hope just needs all this lot played back to bury them in the California case.
It's important to know how many of the board knew. If it was just zaza then that is bad but not half as bad as if they all knew. Did they actually receive $5.8m in 2018?
If they both did and did not disclose to auditors and shareholders then that is shocking. The pair of them should not be in court if they were sensible they should have kept silent. No wonder they wanted it arbitrated.
The FRR US transfer has been blocked all along. We already knew that from our own research. The interest with Outrider and Green deal has been concealed from shareholders.
The pair of them could yet end up in trouble if FTI pursue or the group becomes insolvent and so done else does.
Just can't see how they escape this one. As classic a case of breach of fiduciary duty by both of them is my view. Be interesting to work out exactly what the judge rules on here. Just struggle to see how you get the asset back or why anyone would let you and secondly fund you.

Thats the difference operating with low overheads and no debt makes. Its very profitable.
The interesting bit is whether GOGC are happy to let someone sit on the wells without agreeing further operations. And that is where the interlopers might come unstuck unless they too can show funds and capability.

Monti that is easy to explain. Even if you did nothing and just ran the wells for 5 years its worth $20 to $40m depending on how long the Georgian allow the term to run out, oil/gas price and share of cost recovery. So Uniserve and Green debts whatever they claim they were are nowhere near that figure. So for doing nothing say (Green invested $2m to $5m but we don't know whether any money changed hands) they could see a significant profit no doubt shared with Outrider. Or they could sell on quickly to someone else.

What we clearly have not seen is a queue of eager Majors and small oil and gas companies lining up for a run at Block 12. If we had we should not have been in the position we are or FTI would have sold at a higher price. The reserves that might interest are the gas deeper down, unproven and likely below the zones SAOG have licensed. Don't forget FRR are constrained now by area 1% and depth. And that combined with the short term left is maybe why its hard to attract interest - even in a firesale by FTI.

Personally I'm still watching closely - the Green deal and Zaza connection to it is critical. That such a deal was done and not put in the 2017 full year and 2018 interim accounts and the board seemed unaware is staggering. This case is important (has to be contested by the parties) but somewhat irrelevant to us as shareholders unless it opens an opportunity to revisit the liquidation and start to unwind the events which have occurred since 2017.

As of today we have lost block 12 and the other assets are worthless. The only recent income has been from federal covid money which seems to be funding what used to be FRR corporate business and in the main litigation.

If I get time I'll tune in again to watch - I worry about the line Steve is taking here and how honest he has been with his own legal team.