Member Info for Moleinahole

Looed I've previously posted on this.
I very much doubt there would be a new PSA for the 1% it's possible but I doubt it.
The original PSA covers this eventuality in the relinquishment clauses. The 99% will be put out for retender shortly in little sub blocks.
It's possible they have issued the termination on the 99% only that is what we all are counting on. But 100% can't be ruled out if material breach was not ruled out pretext to take 100% as part of the arbitration agreement.
The more pressing issue may be how to pay the $6m bill for arbitration. I suspect Zaza would like to offset the vat we are due.
That's the way out to leave us with 1%. But then we have $40m of loan notes and other debt on the books to deal with. So that requires a substantial injection of cash or capital or a capital restructure plus the funds to progress operations.
It's not impossible for FRR to survive this but I'm sure it requires goodwill from a number of stakeholders we have been fighting in courts round the world.
The real question if we survive the frying pan is can we escape the debt fire underneath and then get back to developing the asset? The way out with Outrider is either pay them off or let them take a very substantial equity stake in a debt for equity swap. That is what Steve/Zaza had been trying at all costs to avoid since 2016.
It's a very difficult situation we are in and the current oil price makes it much harder.
It's both puzzling and surprising how the company keeps going at the moment. Operations and company personal must have been hollowed out to virtually nothing.
To get an investor or borrow FRR need to retain the 1% and show you can generate a return. Clock is running on this how but knowing if they have terminated 99% or 100% on 27th July is indeed the key question.

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.

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.

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.

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.

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.

Looed got a busy day of work again today so not got time to back check on my home pc at the moment.
The FEGL company can't be not registered it's been around since 1997. When you look at that site not registered on a lot of entries just means no entry recorded on a particular line you might be looking at .
That is however the entity that will get liquidated if we loose the PSA as it is the operating company for the fields in Georgia and the one that FRR have tried to move the 50% shares the group held into controll of FRR US rather than Frontera Caucasus which FIT gained control on default of the mortgage.
From memory was the nov document a request for an official extract from the registry by someone.

First to make this clear Steve and Zaza are clearly aligned to shareholders as captains and significant owners of the good ship frontera. We are passengers and part owners.
A successful frontera rewards both the captains, the shareholders and the crew. So we are aligned through mutual interest.
Does that mean the captains have always made the best decisions and may have taken considerable risks on this journey that as shareholders we were not aware of before embarkation?
Yes in my opinion they have. That is more a question of competency than trust. But without knowing all the constraints the decisions were made under its hard to determine whether that was the right decision or not at the time. The point I would make is how we have ended up where we are while not unimportant to not nearly as important as what course of action is planned from here.
If the boat is holed below the waterline there may be no option to save the ship.
However, the captains may have planned a rescue mission with 1% of the cargo to salvage something fro. The situation.
The problem is that even having salvaged 1% the company still has loans it used to buy the ship that is not sunk and the 1% needs to cover those costs.
So we are aligned but that does not mean mistakes potentially very costly one have been made.
As for KPMG there job will be to audit the accounts and looking for items that cast uncertainty on them and in particular the balance sheet. The arbitration is of interest mainly due to the potential liabilities it could generate. That will be there focus. I doubt they are interested in the PSA per se. It would appear from some of the statements that the cost of the arbitration was shared in full or part and the Georgian side stumped up some funds when FRR declined to do so. That would make FRR now a debtor (an asset) to GOGC until any liability was settled. What makes this complicated is that you have both GOGC and the SAOG involved as entities. You need to see the very slight differences between the two parties. GOGC proving material breach is what potentially enables SAOG to terminate the PSA.
Alot depends me on whether the ruling explicitly covered the matter of the full PSA and termination or not. I tend to reconcile the two through Zaza possibly looking at the arbitration but SAOG going beyond the arbitration and back to their rights on material breach once GOGC had fought the arbitration case on sub clauses of the PSA.
Both parties can't be right. But given FRR believed they could circumvent the relinquishment clause you have to be nervous that they have miscalculated on the termination clause.
I still of the view the SAOG had the discretion unless explicitly ruled on in the arbitration to terminate. Exercising that was a calculated political move in my opinion. There may well be more to this and so something else to be revealed. If so its going to be interesting if there is. If not the company will lose the license and be left with bills and no m

Morning Looed another interesting sets of comments from Hogan Lovell.
Again if you place those into the timeline of past few years they fit quite nicely.
In middle of that period 2016 to 2017 was when GG started first round of comment in media about FRR fulfilling obligations when Steve N started making noise about being discouraged from gas investment and as a result went to see the Georgian president.
So in the run up to the end of exploration phase GG were on the face of it willing to talk about the PSA. Does that seem credible? Yes you would be surprised if that was not the case.
Now they commented at the time about FRR balance sheet and how they could fund commitments.
At that time Enter Outrider with round 1 of the loan notes battle. For a year between June 2016 and may 2017 FRR were not able to do anything as the share headroom was exhausted and cash in bank imponded by administrator of the old loan note holding company. So the dispute with Outrider at that time was already impacting the PSA and the ability of FRR to manage the expiry of the exploration phase of PSA.
It was not till Q3 2017 that FRR finally got the funding together and started exploration again with Ud2. The seeds of the current situation were down in that period. Outrider went from unsecured to secure creditor and while we did not see clearly what was going on the dispute with GG which be and the arbitration was started.
The 2017 to 2018 campaign was essential to resolve both these threats. The possibility of a deal with a major goes back many years and on the face of it the drilling campaign is what could seal the deal. The secrets way the campaign outcome has been revealed has been put down to the announcement of NDA being in place and the well torturing even used to explain higher expenditure in the last set of unaudited accounts.
We are rapidly approaching the moment of truth here where the two threads of litigation which both have their roots in events of 2016 will come to a conclusion. Either FRR have a plan which may involve a major as a partner or they don't and are trying to survive by retaining the 1% as an asset to attempt to recapitalise. Of the three and applying common sense I would place loss of the asset as more likely than a major deal. If they retain 1% but without a significant deal then they have the chance to negotiate a funding package but they are carrying alot of debt in addition to the Outrider notes so that would not be easy.
Looed on where the notice was served Frontera Georgia would make sense to serve if you disputed ownership. They held the shares in the joint owned operating company of the PSA. FIT liquidated Frontera Caucasus which used to hold 100% shares in Frontera Georgia. Would have to check again the deja vu doc on the transfer to FRR US as to whether they just transferred the Frontera Georgia shares to FRR US or whether they transferred the Operating company shares. That would be the distinction between serving on both

Just wait! You can't buy or sell or short shares in FRR. No information is price sensitive it's all just legal or commercial or political now.
Any real news when it breaks will be free.....

In politics you often chuck your acquaintances under the bus to get on. FRR needed to project a confident and strong front to leverage that. The last 2 years have not helped that cause in my opinion. The Iran allegations and other Russian interference are likely another matter much as FRR might like to link the issues and they may indeed be right to do that. However, that does not matter when your being pushed under the bus.

Now we have a first proper response from US side. Now that does not help a great deal. It's supportive of process as you would expect but could be interpreted as respect the 99% to 1% split or not as the case may be.
Let's see what happens next.

Indeed Looed focus on the game not the player with B2O. I've always been intrigued by his/her posts and if a PI then I tend to assume they have unearthed something others have not seen yet. Hence my request for source.
I'm just not confident here at the moment and I have spoken to the company since delist as I don't see how a deal could emerge from such determined litigation by both GG and Outrider. Title to the asset has been under two legal challenges. If it was a large country making deal it should have gone quiet while the details were worked through.
What is actually happening is the GG are using the process to shield themselves from US blowback. Outrider could be onto a massive loss here. And there a millions more in debts owed to others. So there will be many creditors who stand to lose here including employees and other suppliers. The old maxim about when you owe the bank alot they have a problem applies.
Hogan Lovels will have been conversing with FTI in the arbitration. So FRR have been fighting a complex multi faceted battle largely of their own making by running up too much debt and not returning the non development areas in 2017. Both these areas happen to be the two areas where disclosure to shareholders has been economical with the truth. It is that track record of economy that should inject a large pause for thought when looking at the reality of the current situation. Zaza may want to politicise this but my gut feeling is it will follow a strict legal process to conclusion. If there is a side out of court deal then all well and good or a last minute reprieve but seems unlikely to me but I would never rule out the possibility of one so strange is the company and its journey. I do think Zaza has tried to rescue the company over the past 3 years and that our interests are aligned. What I'm less sure of is whether confrontation has been the best strategy or whether in the end it was the only one left in the absence of a deal or a funding source to take the company forward. And to end in my opinion that could only happen with certainty on the asset which the arbitration and loan note litigation/security issues have made mighty difficult.

Thanks for that Looed that to me indicates the transfer to FRR US in April 2019 was also disputed at the time in !ate April by GG they wanted prove that FRR US has required skills and funds to fulfill the contrac. FRR at that time had not returned their pack with their response to the registry request until June. So your post below covers a part where the transfer was still being disputed. GG then terminated the registration process hence its gone to arbitration as well to test section 27 of the PSA as it involves the PSA and was also in dispute. On that there is a fair chance FRR would win that at arbitration.
But the timing is very interesting and does again beg the question what role Outrider and Hope have been playing here in this saga. If the transfer was ruled on in the arbitration then that would make sense not to want to publish!

Again not seeing anything in that which would point to anything other than the transfer was to FRR US. That the transfer could be ruled void by arbitration is interesting. As then the contract would be with FIT. Did FIT only initiate liquidation when that part of the arbitration was resolved or known? Or is it still moot in which case they could be on the hook for the outcome of the arbitration another reason to liquidate.
So yes doesn't change my impression that FRR is relying on some goodwill to retain 1% post arbitration hence the political dimension. It seems clear they could have settled in Q4 2019 but for reasons we are still not sure it fell through. Leaving us where we are today with the click ticking to July.

Welloiled - yes thanks have all that lot they are the documents that tie in with the Outrider commentary around April to June 2019! That was last weeks back reading and why I asked Looed if people had been into the deja vu files - you are following around where I have been already and added even more documents to my library. Its very surprising what you will find if you keep opening up those documents and the US court stuff. Some people aren't careful when they scan documents and publish. I wish Georgian was easier to copy/translate it makes it very hard on some of what I think are the key documents to work them out. Keep poking though as you may find something. But you'll see what I mean by there should be a paper trail.

I can't believe I'm spending time again on this company! Its compelling/addictive/frustrating. Lets go from the top.
Frontera Resources - The Group company is where we hold our now delisted shares.
The loan notes were issued by another Cayman company Frontera International. They mortgaged the shares in Frontera Caucasus Corporation as a security.
The PSA is held in an operating company FEGL joint owned and registered in Georgia 50/50 with GOGC. That company holds the exclusive mineral license. Frontera held the shares in that company under Frontera Resources Georgia a cayman company. Those shares were in turn held by Frontera Resources Caucasus Corporation a cayman company. All these companies were therefore wholly owned subsidiaries of the Group company.

Outrider forced FRR to lose control of Frontera Resources Caucasus Corporation by enforcing security on the mortgage. Just before that happened FRR moved the interest in the operating company FEGL held by Frontera Georgia to FRR US (a US registered company). I think that transfer can be done under section 27.3 of the PSA without GG approval as they are an affiliated company with >50% ownership.

That is the transfer FIT think could have breached covenants in the mortgage. I am guessing they are liquidating whats left of Frontera Resources caucasus corporation. At the same time in Dec 2018 Steve and Zaza pledged shares in the group in case FRR failed to pay the interest in Sept 2018 as a result of amending the notes in Jan 2018.

So as at mid 2019. The shares in the operating company FEGL with the PSA were with FRR (US). Steve and Zaza had not delivered the shares they pledged hence the Texas litigation while the fiduciary in California rumbled on.
Over that period Green seems to have invested a sum with a security on operating assets. That could be the block 12 PSA or a profit share on say a well - we simply do not know the amount or the terms of that transaction).

The arbitration carried on with GG seeking to get back the 99% not subject to development plans. The bit I can't fathom is what an OOCS settlement might be and who it might involve. That is what I want to know about. I've not seen anything yet that supports that. But if the GG comments mean what they say they intend to cancel the PSA and I would read that as 100% of block 12 until I see evidence to the contrary. That would leave FRR US holding worthless shares as its only asset is the shares in the operating company.

Its speculated there may have been a further transfer. Who says there is an out of course settlement and how do they know this? Link please so I can investigate. The Batumi article doesn't support that. So is it Zaza comments in press?

Leases Welloiled - I think that was one of the points of debate around the registration of the foreign branch. And that may also link into the info OOPsi found.

As I posted the other week the deja vu files are very interesting reads and is where I now have large parts of the actual PSA rather than the version in the AIm admission. You find the Georgian versions are often certified translations of the English as Georgian Law requires them in Georgian. If you could easily extract the scanned words to tanslate or read Georgian I'm convinced there is alot of very interesting information in these documents. Equally I'm convinced its where you would find even skeleton records of possible deals/company set-ups. I'd love to read the 2015 document I was looking at this morning marked as secret for instance! It does show even confidential information is still registered as I would expect.
Hence my conclusion so far that the asset is with FRR US at the moment following a para 27.3 transfer that did no need GOGC approval irrespective of what some of the status comments on the site show. If that was not the case FTI would not have said what they did in Q4 2019 about Green and the transfer.

Back for lunch...
The FRR US company is the company FRR have tried to transfer the share of the PSA too. Read my posts on FIG/FEGL/FRR US.
The other two I'd discount as seem to be Zaza son and not part of the Frontera Group from what I can tell - even has a gmail account to contact! Quite what those companies are doing I have no idea one for others to search as I'm concentrating on the PSA and FRR Us. Any company not at least 50% owned by the group can't get the PSA transfered.

Draft I posted a few weeks ago on this - it is no surprise to me its how planning works.
You put a proposal and then mitigate/adapt. I have fought two public enquiries with a developer involving an EIA application on a Ramsar site and seen first hand how the main govt agencies object and then mitigate and finally tend to cave in to the developer having had some cozy chats outside. The key is getting their evidence together. With that in place given current planning favouring development it will more than likely be approved.
Having been invested here for years be nice to see it progress and planning is a good step forward. Next needs the bigger backers to chip in and make it happen.

And finally before I crack on with some work today in terms of the PSA and transfers an affiliate is defined as a company, corporation or partnership or other legal entity where own 50% or more of shares or right to establish management. (Abridged comment).
And that is a deja vu under FIGL which is FEGL on the transfer to FRR US.
So yes I'm comfortable that FIG in this context to the transfer to FRR US who then took out some finance with Green.
The batumi article is talking about frontera international which is the group company going back to days of old. But I think they get confused as is easy in these things.
I wish I could say I have found something that makes me optimistic as I have an invested interest in this working out. I'll conclude by saying I would not rule out a dramatic development here but if things progress how I expect then I would say they will enforce the termination and possibly FRR will try to challenge in a legal forum. In the meantime they will try and ramp up the political noise.
They may have little choice.
But as of today I think it relies on a fair amount of goodwill from parties who are currently shouting at each other across the media.