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Heid - I'm off shortly so this is last post for a few days. Of course majors would do their own review of the data the existing CPR are so thin they are next to useless and they have the people and technical resources to run the models. We know Frontera have in the past shared data with Exxon. But on the gas in particular (in my opinion) the amount of data is still relatively small. I personally don't see a major coming in for the oil - the wells are still on the lower end of volume to make them interested. For those I have always seen as for FRR to produce with a smaller partner. The gas is a totally different proposition. Schlumberger found something in the adjacent block but have then left. That is really odd - Block 12 may be a better analogy to Shah Deniz or Azer so its not conclusive but they have added greatly to the understanding of the Basin.
If FRR have to go alone to secure finance the point I'll keep making is that they would be better placed doing that with a full CPR that delivers P1 reserves.
Any left field transaction involving a major is entirely possible hence I would never discount. However, when balancing probability I'm inclined at this stage towards finance or a smaller partner for the oil should they get over the double bumps of arbitration and outrider litigation. Hence why I will keep coming back to what is normally needed for that pattern of development - namely a reserves report to borrow against.
It is the Outrider veto on borrowing and historic low revenue that triggered that stream of litigation. They have shot that bolt - but I'd be alot happier with the New York case put to bed and FTI out of the picture. It is the presence of that litigation that has complicated resolving the abitration/GG grievances which is why this has turned into a complicated problem to resolve. The politics then add another dimension completely.

Ex it's possible. Anything is possible here. I tend to go back to the company commentary since 2016. There is no doubt frontera talk to large players in the world of oil. Since then only 2 wells would have yeilded anything new - ud2 on the gas and the deeper eldari well. They could have reprocessed other older information. Schlumberger activity in adjacent block I find interesting. They spent alot and yet are leaving to block and a carried interest through shares. That was not a good sign.
The offshore block announcement today Exxon would have been a candidate. BP were previously part of the consortium with Anadarko (Houston based) but they let it go.
So the majors have looked at Georgia but none have stayed.
I don't rule it out but if they had a firm interest I would have expected that card to have been played at arbitration and I doubt they would have allowed 5% to be given to Outrider or lose 99%. Hence I tend to think FRR are not in advanced talks with anyone. If they were the political fire storm would be immense. So I tend to think we are still on the Baker Hughes service provider plan for taribani for the oil and would need some funding or a profit share. The gas is a totally different proposition and the wildcard.

Assuming someone would lend to say $60m on s delayed secure basis.
That would enable Outrider to be settled with some cash to settle the various debtors and enough cash to kick off a cascading drilling campaign in taribani of 5 or 6 wells.
The question is would anyone lend without proper CPR? For sure they may not without an extension to the term on PSA.
Hence I can see a way through this but it does depend ultimately on the geology and prospectivity of the field. Hence why the thin CPR don't help that process.
I'm about to head south for family reasons and will be off grid again for a few days. Would be nice to see it's progressed a bit by time I get back. So keep hunting guys and fingers crossed for some more positive signs.

CF as I posted yesterday I think a bit of moderation is required here.
The issues here are more complex and I don't think it helps characterising either side as good or bad. I personally have not seen definitive evidence that would lead me to take a strong view on the role of GG here.
Frontera fell on hard times as a result of the loss of the Azer license and some drill campaigns that came up short. Not once but several times in tariban, mirzani, basin edge and mtsare/udabano.
The effects of those campaigns failure to increase production or book reserves left the company with a weak balance sheet. That became a problem post 2008 financial and commodity depression post the Russian invasion.
Since then the company has liked along and relied on private investors to fund both the general expenses and what could be funded on exploration. It is the failure to attract a partner post 2016 that is the real issue. I'm willing to believe the short time to termination of the exploration phase has not helped and that is where Frontera could have been helped a bit.
If Frontera are to remain on the 1% they will need to accommodate the costs of arbitration and re-employ the staff. To approve the transfer they will need to furnish a development plan and show how they intend to fund.
The GG are playing this to the book in my opinion and whilst political leverage will give Zaza the chance to go forwards this will turn on availability of funds. So some give on both sides will get the ball rolling but once it does I would expect Frontera to have to put down firm development plans. That is what they need to be ready to do.
If they don't then I would expect the termination to proceed regardless of the politics as a pure commercial decision. The time for kicking the can down the road needs to end in a solid and credible plan. I think that is necessary for shareholders and GG.
But it's going to be interesting where the money will come from as without a listing and with low revenue it can only be borrowed or a new injection (like the New York Durham funding from 2018) or EBRD or such. I tend to place that kind of deal with Baker Hughes as a service provider ahead of a deal with a major.

Mick I would agree that considerable caution is required here - but equally I can understand erazzel taking the opportunity to have a little shimmy.
Alot now depends on whether FRR really do have some sort of partner who can provide funds to settle up the bills run up with GG and Outrider. If not then this discussion won't take long to get to settling the bill on the arbitration and I would think employee wages. At that point either they better be able to pay either from the withheld VAT or an other source else this could be a short reprieve.
From here we then have to be able to deal with Outrider and wind that legal action up and be able to pay that maturing debt and then have enough in the kitty to agree and pay for a work program in whats left of the block.
So I'm pleased to see we now have talks but as shareholders we remain in a very precarious place and left watching the drama unfold.
If the field remains attractive for a partner (and we have a willing investor) then there is a less dilutive way out from here with the company recapitalsed through a significant transaction. If not then the risks here remain very high that alot has to be given away to attract new capital and pay off Outrider and placate the GG.
The dream outcome is of course a left field significant transaction that solves all our problems. In the absence of that the company will have to make deals from a weakened position which will inevitably reduce shareholder value.
But given most here will have valued the company at zero - its better than where we were to still be at the table at all - the company having been prematurely pronounced dead on several occasions already by the prophets of doom.
I don't agree with many things they have done over the past 4 years but I would not question Zaza passion for the task in hand - definitely more Barnum than Kissinger. So I think a degree of moderation here to let him finish the job is required as clearly this site has become a key focal point for dissemination of information from many stakeholders who are watching to see what shareholders think. At some point its possible we may yet have a say in how this plays out - as with so little headroom left and any deal or refinance involving equity likely needing shareholder approval if this progresses more favourably then the silence will come to an end. The first formal contact after such a long break will be interesting for sure. But for now its a wait - as ever.

Seingred I concur with your view. The way out here since 2018 has always involved compromise - be it GG or Outrider. Unfortunately to date that has not happened and both pieces of litigation have been pursued by the other parties backing FRR into an ever tighter corner. Its been a very damaging 2 years for everyone. So a first swallow of compromise is a good start but maketh not the summer after our long winter of discontent!
The way out has not changed ultimately the company needs to sort out the license and be recapitalised if it is to survive, develop the asset and pay creditors. How the company is recapitalised is what should concern shareholders should we get out of the frying pan. The least dilutive to remaining shareholder value as possible.
Any deal here I would expect to involve the employees being sorted out as that to me remains an area I'm deeply unhappy about as a shareholder. The bill for the arbitration traded for the withheld VAT maybe and then likely a totally reworked PSA or the write off of the cost recovery pool. Perhaps then we may see a partner in the mix.
Should the company find a way forward I would be cautious in celebrating till the company has secured title to the block and recapitalised itself and we know how much we were left with.

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.

Looed the search for a termination notice is more a sleuth task and I suspect could be obtained from GOGC if one were to ask directly!
Keep your translator fellow on the media stuff most documents you can get the gist with Google translate.

Just picking up on a few threads from last few days as been off line for various reasons.
First - Noticed the interesting thread on the litigation with Hiscox and pioneer. That is interesting for a few reasons. First Outrider saw the need for a policy with Hope on the FRR board. Secondly FRR in the key April 2018 period saw the need for a policy as well to protect directors. The astounding fact is that this policy covered Hope so the actions in Cayman and California by hope have been funded by FRR own policy. The company has had to pay (or not pay in some cases) it's prosecution costs when it had little funds but Hope could likely utilise insurance funds to defend. A tactical miscalculation but it goes along way to explain why the attempt to use litigation as leverage with Outrider failed in what I believe was it's intention to get them to push the interest out further.
The second thing this means is that for anyone wanting to take legal action against Steve and Zaza then beware they likely have an insurance policy to fund their defence.
Did anyone download exhibit b from the case file out of interest the insurance policy to see what sections of cover FRR might have obtained? If it's on pacer I might have a look to download if not.
I have not seen any of the translations or these other documents that have prompted a note to a lawyer but must admit I don't think any decent legal rep would reply and would generally think it unwise to try contacting someone like that. But I understand the motivation.
Looed I notice you asked about where we might find the termination. I'm not sure. Some sort of public registry like where we have been looking at the company docs seems most likely these days but it's possible they have just served the notice and its not online. We have not seen the drilling licenses etc published in the past so maybe it's not public facing website.
GG doing exactly what one would expect so clock is ticking now. The company has to come to some sort of compromise with both Outrider and GG to go forwards but it's hard to see other than politics where the way forward for FRR is. They have to somehow pay their share of costs and fend off Outrider but at the moment face the prospect of either having lost the asset to liquidation if the transfer is unwound or back to GG if the PSA is cancelled anyway.
Not changed my view that at the moment it's going to take a significant development to change the course of events here. But I think the saga of the nsurance policies will likely have played a significant part in the events.
I'm still of the view that post Oct 2018 events have not gone how FRR hoped. I think they were relying on Outrider relenting on the interest and GG on the arbitration. Neither has done so. Outrider as they seem to have funds from insurance to counter attack and GG because of a perception of weakenned or Luke warm US.

Well-oiled this is the evidence I was looking at a few weeks ago. I thought there was a full English version there plus the Georgian notorised copies. It's FRR reply to the original block of the transfer which has subsequently been rolled into the arbitration. It has been the ambivalent end to registration process that has made it hard to work out where the asset resided. Assuming Hogan Lovell comments on this are correct it is the unravelling of that transfer that adds to the problem of the termination notice. It's a key piece of evidence in the trail you are reading but it will now have been superceded by the arbitration rulings on the transfer.
So Ekxoc it is consistent with what we know the position was pre-arbitration.
The question as I posted earlier is what happens if the transfer is voided and FRCC is in liquidation.
The convergence of the two pieces of litigation around the transfer question is very problematic. And the possibility Outrider/FTI have been working with the GG can't be ruled out here.

Steve V - the point you are making is a very good question. Jonathon I think Steve V is looking beyond the arbitration debate to what happens now. Given FRR have or are in the process of relinquishing does that mean the 1 % is safe or in other words he is asking if there is a period to fix/cure a material breach.
That is indeed the question and why anyone writing it off totally even now needs to be slightly careful. Couple of scenarios here - they can indeed fix the breach and still retain the 1% or they can't and GG persist - the fact there has been a material breach means they are at the mercy of the GG and it matters not whether they fix it or not. Hence my comment that this is likely a political/economic decision either way as I tend towards the view that we are at the mercy of the GG now.

After 2 years of litigation and constant skirmishing since GD came into office goodwill is likely short. If they had a genuine opportunity to resolve outside arbitration then they should have. And that is the same comment I'd apply to the Outrider legals. Frontera have found themselves surrounded by litigation and attempted to counter punch on each of them that seems to be the American way.

Tenners I hope I've been consistent in commenting here. My own interpretation is that the PSA as a document covers block 12 as a whole. The development/exploitation areas (such as Taribani, Mtsare etc the 1%) and the relinquishment/exploration areas (99% rest including Basin edge). If you cancel/terminate the contract you cancel all of it not part of it. The PSA already allowed for relinquishments in the contract. I would guess relinquishment releases the relevant mineral license and rights for that land which goes hand in hand with the PSA. So the contract would effectively be amended not terminated and a new PSA and mineral license grant issued to someone else for that sub block. Could that be FRR on new terms? Maybe but unlikely.

Apart from the question of the termination the other big question which Hogan Lovells alluded to was the addition to the arbitration on the transfer legality. As FRR have now lost control of FRCC to the liquidators (that is a matter of fact) any unravelling now of the transfer to FRR US would leave the asset in a liquidating FRCC. I still have not seen any evidence beyond some investment in the asset of a further transfer and the company records in Georgia reflect the position that even the transfer between FRCC and FRR US may not have been completed due to the GG objection . So it may be academic about whether 99% or 1% has been terminated as the asset may slip away into the FIT liquidation if the transfer in unwound. At which point the question of who is liable for the costs of the arbitration becomes interesting. If Frontera have made parent company guarantees then shareholders here will be standing the costs but potentially with only a prospective Moldovan acerage as an asset and alot of debt due in 2020/21 let alone the legal costs. Outrider and FIT will be unlikely to see any profit on liquidation. The problem FIT would have is they don't have the funds or expertise to run an oil exploration company either. So Frontera absolutely need to retain the 1% to have any chance of managing the debt and outrider situation. Without the royalty or the block license FIT have nothing for their creditors (in the main Outrider). So the only winner here will be Georgian Govt if they get the block back with producing assets to retender. Shareholders, debtors (Outrider, banks, creditors like suppliers), employees and even YA as preference shares stand to lose. Who has done well to date? Lawyers, YA who used the period 2016 to 2018 to unload best part of $8m of their debt to shareholders and those who knew information at the right time in 2016 to 2018 to bet against the company.
When I say the company have faced an uphill battle thats what I mean. To protect the license the company needed to raise significant capital post 2016 and succeed in drilling but at the same time had YA selling as quick as they could every month. If I sound not confident its because I'm deeply worried . Zeninvestor good post.

Looed what Zaza is saying in that inter view is only true to a point.
All the versions of the PSA I have seen clearly show a provision for either the company or the state to terminate early.
The state could only terminate in the event of a material breach. The arbitration has not tested termination it has examined points of disagreement and interpreted and adjudicated on the contract.
In the event of a material breach the state can indeed unilaterally terminate the contract but it would not be unilateral it would be as a result of the company creating a material breach.
The arbitration won't and can't have looked at any actions following its decision.
But my own view remains that a material breach of the contract proven at arbitration can result in the state having the right to terminate. That decision is a political calculation.
The problem FRR seem to have is paying for litigation. Without the funds to pay for counsel and with Levan gone seemingly no in-house expertise litigation without good counsel is extremely unwise.
Hence if the only recourse is further litigation the company is not well placed to defend itself.
The pressure placed on the company from various directions has all the appearances of a coordinated campaign but equally it could just be a convergence of interests as the financial stranglehold on the company tightened. It is this stranglehold that attracted the shorters to the party.
So in the circumstances they probably have little option than to work around the edges. If they were on the front foot the serving of the termination should have been countered with some sort of injunction unless the termination served is just for the relinquished land. I'm not sure where we would find the termination notice but it must be a legal document and so should have been published. That is what I think we should be looking for or if we can't find requesting a copy from the state agency. The absence of robust US support and continued non engagement with shareholders to me is also telling at the moment.

Erazzel it is indeed possible that BH have carried on since Jan 2019. But I really doubt it to be honest that it has resulted in drilling new wells. If they had we would be generating more cash. If I had to guess they may have done a bit more observation of the well results from 2018 but while the arbitration and Outrider dispute is ongoing I would be surprised if the legal side of any large corporate would enter into any binding agreements. BH deal implied profit share so it can't be ruled out but if that was what was going on I would have expected that to have come out in the press and probably in the docs on the FEGL company. I must admit it I had worked for Frontera for 20 years and got replaced by contractors like that I think you would see more political blow back. so common sense to me and observing the company behaviour leads me to the view very little us happening on the ground. But so strange is this company I never rule anything out. I always like the Sherlock Holmes quote when you rule out the impossible whatever remains however improbable must be the truth. At the moment we are in the realms of the probable which is the company remains distressed financially and fighting off both Outrider and GG to get back to where we were in Oct 2018.
I'd place the major deal and BH working in the field towards the improbable end of the spectrum but not impossible.

CF73 I'm still pretty miffed about a large part of the 99% we may have lost (let alone the prospect of it being 100%!). Basin Edge whilst challenging almost certainly was very prospective for a company with deeper pockets. The deeper gas prospect spread from far to the north of taribani and down to the edge of the block and to the east through Mirzani out towards Basin edge. Whilst there is likely high value in the 1% bit that's left - the lost bit is very significant and its a mistake to mimimise it or characterise it as wasteland as I've seen a few call it. Its unproven but likely contains significant reserves that need the right technology and funding to extract profitably. And that has always been the challenge in Georgia. On the Geology and possibly politics the Schlumberger exit from block 10 remains of interest. They have gone deeper to look for gas and based on what they saw and maybe their own financial plans have exited leaving a residual interest in the asset via Block. Those results should provide a reasonable read across to parts of block 12. All this is why the company have tried hard to avoid relinquishing.
Its also not impossible for FRR to join the bidding when the blocks come back to tender - that of course could occur after the elections! So always possibilities here both ways as the board attempt to navigate a way through this. But the way the employees seem to have got caught in the cross fire of GG and Outrider along with shareholders has been very unfortunate and should not be forgotten. I'm not comfortable personally as a shareholder that the company employees have suffered in this period.
But you are correct the politics is a difficult dimension to attribute risk in an investment.
The sooner we know what we have lost the better and the sooner the next events unfold will allow clarity for shareholders and employees on the future direction.

Armoured bear it's not that easy to transfer an asset when you owe alot of debt unless you take the debt with you. Whether you realised it or not that has always been one of the greatest risks here due to the high level of debt to revenue the company has run. As with any debt it's the serviceability that matters not the debt itself as long as it's borrowed against an asset that's worth more than the debt.
You can't easily transfer an asset to an entity connected to yourself and leave debt behind.
However, if you default or can't pay and a capital restructure results then you can never rule out a management buy out of the asset at a steep discount when a company is distressed. But we would get to vote on that.
The greatest risk has always been Outrider working with the management on such a venture. That is exactly what happened at Madagascar oil. In our case the board to date have done the opposite and took on Outrider directly rather than acquiesce which could have happened in 2016/17. Indeed the board seem to have been forced to convert all their own debt into shares with a lock in and go unsecured. It's things like that which show they are aligned to shareholders.
So whilst I'd never rule anything out here I remain broadly of the view that inspire of the silence it's not because we have been forgotten and forsaken but things have not progressed how they needed/hoped they would with both Outrider and arbitration.
The politics is now fully on display which has for a long time been one of the other major risks for the company.
The risk to your investment is greater from Outrider and the GG than Steve and Zaza running off with a contested asset. You can never rule out an offer but in this case I think the protagonist would be Outrider if that happenned which might explain in part why they want shares Steve and Zaza pledged. Either because they have value, to excercise leverage. Last we heard the company only had @1bn shares headroom left. So we can't get dilluted that way without an AGM.
It's the unfortunate interaction of the Outrider debt and the threat to the asset by GG that has made this a difficult situation. It's hard to raise equity or borrow when your asset is at risk. In FRR case it's faced a double whammy from Outrider and the GG.

Well oiled again that is a non state bank with a charge on some assets - again more indicative of tight finances in the period to me and using banks as a source of funds rather than a move by the state.
What it does demonstrate is commercial enterprises in Georgia are likely in the $10m+ debtors and whatever has been borrowed since last set of accounts in 2018. In the event of it going wrong they will want to be at the head of the queue with some security on whatever they have loaned.

Well oiled have looked at the document again. Saw this the other week and agree it relates to Frontera Georgia Foreign registered branch (a further Georgian company registration of the Cayman subsidiary that Frontera Caucasus held shares) that used to hold the 50% in FEGL but Zaza moved into FRR US.
It looks like some sort of charge/interest on the company register - the same documents show a mortgage/lease with JSC bank who also have a charge. Always hard to read these documents.
There appears to be two dates 25/03/19 for the JSC mortgage/lease and 19/11/2019 for the other entry , N00640586, 19.11.2019, Revenue Service. Quite what that is and who is behind it is hard to tell. But if you trace the request on 11th May 2020 back to the company registration page it was made by JSC bank to extract from the register.
Maybe its JSC who are concerned about whatever their interest is?

FEGL s in the hands of the PSA termination. If its a 100% termination FEGL would be wound up.

As to the fate of the transfer to FRR US. That seems to have been a matter of debate in the arbitration. Hence why FIT started the litigation in New York potentially to unravel the transfer. The entry is as likely related to that as anything by the the State. To work out what the charge/mortgage interest was you need to try and get behind the bit:

Tax lien / mortgage: 102019424904 19/11/2019 10:33:41
Branch of a foreign enterprise (representation) Frontera Risorsiz
Georgia Corporation Georgia Branch S / N 204931431
Subject: whole property, whole property
Grounds: Notice, N00640586, 19.11.2019, Revenue Service

State agency would issue the license. So that is where I would expect to find a termination published. As it's legal I would expect it to be detailed as well and not open to interpretation.
Bugsy I thought has mailed the Georgians before. So there is the option of asking them!

Looed cancelling 100% would be a political calculation. The cautious political move would be the 99% unless FRR have lost their political cover or really burnt all bridges. The main reason to cancel the PSA would be to wipe out the cost recovery pool.
I would have thought the termination would have to be published somewhere. But don't know which state agency site to search for that - it will be in Georgian.