Member Info for Moleinahole

I'll probably regret posting this as soon as I hit send but will post anyway. The joy of the lockdown being home!

I think we have already seen the media tit for tat today. Tempting as it is to jump into the fray here the serious question you have to ask is would it help the situation or just feed a story to the media? We can indeed ask questions but as you have seen today FRR and the GG seem to be at cross purposes and hence people are having to interpret translated statements with emotions swinging.

The questions I think everyone wants absolute clarity on is whether FRR have lost the fields or not. I think it's that simple. If they have then is there any legal avenue still available to still find a civil way to stop this.

I think there is a large number of honest decent ordinary folk who have invested here not perhaps the type of people Georgians may imagine are frontera shareholders who in most cases have invested in good faith.

If we have lost the fields we want to know why.

I would not expect to air in public the other goings on with Outrider but the fact that the liuidators for what used to be frontera Georgia do not seem to be in the frame tends to suggest that the PSA was indeed transferred.

The reality is this is hugely political and based on today's statements both sides can't be right.

Simple direct question and simple answers if you are going to ask anything. But personally I would sincerely wish people to understand we invested in frontera and Georgia in good faith and expect to be treated fairly and even handely. I think no one would invest in the country again if we were not.
But I expect no one really cares a great deal about a bunch of small investors.

That note tonight is what I as expecting hence why I have not posted since the arbitration news landed. If true they have activated the clause in the PSA I was most worried about.

Termination

Frontera Georgia may by written notice to GOGC relinquish its rights and be relieved of its obligations under the Block 12 PSA at any time if, in Frontera Georgia’s opinion, circumstances do not warrant continuing Petroleum Operations. The State may only terminate the Block 12 PSA on ninety days’ notice if Frontera Georgia has committed a material breach of the Block 12 PSA (being a fundamental breach tantamount to a frustration of the Block 12 PSA which may include failure to complete any work programmes approved pursuant to the Block 12 PSA) which is proved at arbitration.

Per the notes in press over last week:

In a unanimous award, the arbitrators ordered Frontera to immediately relinquish the oil & gas fields in dispute -an area of more than 5,000 square kilometers in Eastern Georgia that Frontera had exploited for more than 20 years, declared that Frontera had materially breached the contract, and ordered Frontera to pay certain damages, interest and attorney’s fees. The tribunal also accepted the withdrawal of and dismissed Frontera’s counterclaims.

The key is material breach gives the state agency the option to terminate at 90 days notice the PSA. I would read that as 100% not 99%. A provocative political move but they will simply use the cover of the independent tribunual and with covid a good time to hide news.

hi guys. I do watch occasionally.

The issue with losing the arbitration is that the PSA allows them to terminate the PSA if a material breach is found. Per PSA notes it is 3 months notice.

Wait and see there is nothing you can do.

Thanks Pyro I am indeed still around. And yes like others here the past year has been difficult dealing with infirm parents in my case watching my father reduced to a shell by Parkinson's disease.

It so happens that I have revisited FRR as a share this week to reread the back information I have on the PSA. I have found that useful and will post on that tonight when I have some spare time.
You are correct I do not want to post on the court cases and try to double guess what is going on. Unlike others I have been able to stay loosely in touch with the company but not since the Court action went into full swing in Q4 and have not pushed since as I think they need the space to work through the problems and I just don't have the time. I won't post anything I can't substantiate and don't think it's helpful to air everything in public either by the company or even a shareholder particularly when we have major litigation ongoing on several fronts.

The past year or so has been a bit like waiting for a space craft navigating the vagaries of space to reappear from the dark side of the moon. Personally I have taken up learning a new musical instrument in that time rather than constantly fret and post. You never know concertina busking could be handy in the future.

Expat - I've held this share for very many years and treat the investment as a conscience investment as I invest in oil and gas. I invest in several fledgling alternative companies and also follow them as much for interest in the underlying technologies. As it happens I have also in my time for my sins been involved in Planning including 2 full public enquiries involving a Ramsar and SPA site in Northern England - I have lived first hand how these things play out between the applicant, NE, the EA, the planning authority and government (if it gets called in for a decision which this looks a candidate). The NE response caught my attention and has enticed me to make a rare post on LSE.
So I have had a read of the applicant and the NE responses. I have not read alot of the detailed background documents so this is my initial impression. My view it is a holding objection as they highlight at this stage.

The Planning authority (and if called in the Govt) here will be making the appropriate assessment based on the weighted balance of evidence. Having seen planning in action the normal course of events sees mitigation and conditions turn a NE objection into acquiesence or the decision maker (particularly on significant called in Applications) use the planning balance to weigh up the competing and often conflicting economic and ecological interests. Often these documents are used to flush out what issues NE or EA have and then give them the additional information they want.

I was expecting when reading the documents to see a bit more than the main objection to be the BAT details and Nox emission level. The NOX is not so much because of this site but because of existing background levels (and other non VLS changes) meaning even a small marginal increase here is deemed to have a significant effect. Even NE recognise this number is as a result of applying extreme and probably unrealistic permutations. Their main issue is really matters outside VLS control - so in the planning balance how should a decision maker weight this? Now the great NOX and air quality debate with the drive to move everyone off diesil and fossil fuel cars is obviously a very topical subject. Now the Impact assessment also references BAT - Best Available Technologies. My read of the objection is that they want to see a bit more detail on that. Given the partners involved I would find it incongruous that the site would not use BAT in its operation and really BA and Shell should be stepping up to the plate to technically support the application.
What should be happening now is the planning consultants addressing the comments but then ultimately the competent person will weigh up the evidence. The pre-existing high NOX is the issue - but if I was a decision maker I must admit I would weight very low the 24 hr NOx in extreme conditions compared to normal annual limits!

I would judge we are now in the outer range of when they should announce. After skipper I'd rather they announce a definitive and accurate result than anything premature. It has to be right as CalE have rights associated with the result to farm in.

Not the red dot everyone waiting on but I would tend to link this RNS with the last one when he got paid in shares for consultancy in the BH deal.

We await to see Harvey. They were not likely to say anything on that in this RNS without then having to say more.

Phil whilst you might think that is an easy option with a Cayman registered private company and the company articles as they are it is not.
The board should have come back to shareholders voluntarily to ask for support of some kind but have chosen to neither communicate publicly or put forward any proposals as to how to resolve the current obvious issues. We can't call a meeting unless the board no longer exist through incapacity or disqualification.
The guys have tried repeatedly to establish contact but the company as you have seen with lawyers delivering summons when they don't want to communicate they are hard to establish. The next opportunity it would appear is in 2020 on the anniversary default AGM date. But quite what would happen in the current circumstances at that meeting or whether it happens is moot. However, a some point the board terms of office will have expired so maybe an opportunity exists via that route in time. Steve must be over due by now.
The problem is that with so much litigation already flying about with the company continuing it's line of silence we remain in a catch 22 situation. The purpose of the group was to engage and communicate with the company not litigate.
Personally I'm pleased that the fiduciary case is running out of steam. I have never agreed with it and don't like it. However, it should have ended in April and an accomodation reached with Outrider. That has not happened and instead both sides escalated matters which has left us and it seems the employees where we are now.
I have not seen anything since April I would regard as remotely positive. To me everything looks like a company that is having the life squeezed out of it. But it is not dead largely due to the actions the board continue to take to stall and thwart process. They may yet have a grand plan but if they do this is a very messy way of going about it.
I'll add one comment on the workers. Are these the employees of frontera or the service companies. Uniserve perform alot of the work in the field. Also it's worth remembering FRR had $25m of other current liabilities as at last accounts. The lack of cash may be due to other debts being paid or other creditors having secured cash from the company outside the activities of the liquidators.
The reality has always been that the funding gap was always filled by YA loans or placings paid for by shareholders. With no listing that source was closed. With a likely continuing deficit even with higher oil production they would have struggled and been forced to juggle debtors. You can only do that for so long. Ultimately nothing has changed the company needs to be recapitalised either through a farm in or a large replacement loan on better terms. Both are possible but made more difficult by the arbitration and the other litigation. The optics remain terrible here and I personally find it best to watch and say little.

If the core project is progressing with solid fundamentals and our new heavy weight cornerstone investor onsaide and with no other known impediments to the plan (noting that CalE would have done far more due diligence than we could ever do) then yes its a waiting game.

Don't think waiting on Harvey necessarily can be read either way - I think we are inside the acceptable range for them to complete whatever they are doing with it but it must be close to news now. Its important to get it right after skipper fiasco and the fact that calE will be interested in the outcome to make an informed decision on whether they commit further and exercise their option to buy in. Anything commercial then you would expect them to do so.

The issue with the share price is simply that with LOG administrators 30% holding that we know is being reduced subject to orderly market at any price between 8p and 19p in profit (but they will want closer to 19p) its no surprise in the absence of large buying pressure we find ourselves at this level.

But you are right to highlight the opportunity which at this level makes it as low risk as you could hope for at this stage in a development.

LOG strategy here is the main thing that is making the share price not reflect what it could/should be.
Any AIM investor would love to be funded to production and have a partner of the esteem of CalE onboard let alone having completed on a key infrastructure deal, completed FID and repaid debt!
The last TR1 by my calcs shows that before today they sold 12,950,000 of their 20,497,204 shares when last notified. So they held onto 7,547,204 to get their 29.99%. So first observation is that they are not fire selling.
Second observation having just got 135,464,155 more (the next 60m at 19p) is not in the tr1) at 8p they have made a very tidy book profit of £14,838,189 off a £10.9m loan (incl interest). The LOG bondholders have been getting the kind of returns promised it seems!). Now to get that and better potentially they need to sell slowly and not depress the price too much.
Once those are gone they have the 60m or so at 19p convertibles.
Seems likely they have been selling in bits again (probably from their rump of shares so far) and obviously provides market with a ready source of equity or buyers/MM are waiting for them to start which is creating a ceiling on the share price.

However, in time if value is there, value will out but it may take time. If LOG are comfortable to hold and don't fire sell which seems to be the case its a great entry point for a 2+ year investment for other institutions who want to shadow CalE investment and PI's. LOG stand to do very well here which could be a massive PR story in itself.

Well a really good RNS and a muted reaction so far - working so missed the RNS but took a few more just before close!

Everything else as expected and tidying up the lose ends with Harvey to come. The interesting bit is the future potential from the tie up with CER in licensing round.

"IOG believes that CER is a very strong and naturally well-aligned partner for IOG both in co-developing the SNS assets and in jointly acquiring and developing further upside opportunities in the Thames Pipeline Catchment Area. CER's high calibre management team, previous experience in this area and strong technical capabilities further cement the alignment.
Berkshire Hathaway Energy Company owns CER through its UK subsidiary Northern Powergrid Holdings Company, whose primary businesses are its electricity distribution companies in the North-East of England. "

A few observations from watching the posting of the last few weeks.
1. Revenue and Oil production: Logic suggests we are still producing at least enough revenue to pay existing trade creditors and staff as they are falling due either that of trade creditors are willing to accept deferred payments. I would guess they are able to juggle funds as they arrive at the moment. The 2018 campaign will have increased revenue. The debate is around how much. I very much doubt we are producing the numbers from the Ukraine article. The giveaway to that is that profit was $1m irrespective of what he said on production volume. Again the second remark Zaza made on sustainable long term production gives you a clue - you can produce on very high volume on open choke but that isn't a sustainable strategy. Could FRR have opened it up a bit for short periods to get cash? Possibly but they would not run it like that for any length of time in Taribani. The profile of taribani wells to date is steady production over time not gushers. Equally if they were producing in volume they would have had to have dealt with the associated gas.

However, it seems to me highly unlikely they have funds for further Georgia exploration without an external funding source or a partner. Hence the Ukraine bid is interesting in that regard. They may well have had prospective funding source for that - but away from the Georgia turmoil of OMF and arbitration.

2. Arbitration
For me the key at the moment is the arbitration. Do some sums on the claim. Allegedly GG want 99% of the block back. But its a big block. That would leave the producing Taribani, Mtsare and Mirzani in the 1%. Apart from Basin edge - most of that I would suspect is prospective for the Gas. The wildcard on gas at the moment is Schlumberger operations in adjacent Block. We don't know what they are up to either its also very quiet. FRR pushing out and delaying OMF does have the effect of pushing the end game for that the other side of the arbitration. The biggest risk in that at the moment is the damage the attempt to transfer the license out of FRCC has done - as it possible we are still in a limbo state with the company in liquidation with title to the license potentially unwound by the Cayman case and approval of said transfer to evade the liquidation threat moot with GG. Both pose existential threats to the business and could result in GG being the winner. I've seen these ideas about 5% royalty reverting to GG - they don't make sense to me. I think an all or nothing game is being played here.
3. Ukraine : anyone who watches the news about US, Gas companies and Ukraine at the moment would keep a low profile. I'm amazed we have so far not got a mention.
4. Texas case: The common thread of the 3 "defaults" is OMF cases. 500m shares if they have to - they will issue from the 1bn unissued. If paid by SN/ZM its a debt on the company to the board.
Not a good place as shareholders - but not finished eith

Posted on my thoughts the other day but once again:
1. Could be Brexit - £ exchange depreciation risks and general risks around no deal.
2. Could be them derisking out of equity in general and into other instruments due to stock market weakness. There will be opportunity here with LOG shares coming onto Market over next few months.
3. Could be a rebalance away from carbon investments in principle or sector/region in general.
4. They would originally have invested at much higher level and having held through the placing they would on average I think be level or slightly ahead so maybe just balancing the portfolio and booking to invest elsewhere.

They might know something and derisking - but that seems very unlikely to me given the other institutions holding and building and CalE interest. Its odd but I would be more worried if they were exiting and the price was going south with them!

If the administrators agreed the restructure (there being two parties to that agreement) and agreed an orderly disposal mechanism then I would expect them to stand by it to be honest.
The issue at the moment is that CalE have not completed the farm in (last RNs says its third party paperwork causing the completion delay) and hence the bond funds are currently not available. How binding is any agreement with adminstrators - I have no idea.
If RRE came back with a revised offer then we have already been at 25p recently so it would have to be at least that and likely more. So yes both LO and Griffiths would benefit bin either a completion of farm in or offer scenario.
The ability to resist an offer will not be with PI investors now but the balance of equity held by II's. So there is not a lot anyone can do about it if there intentions are opportunistic.

Not once the LOG shares get issued on completion of the farm in they are not....then they will get diluted % back down with the rest of us. So they become a threat only if the LOG shares become available but they are subject to orderly disposal agreement.
If the CalE farm in fails then I can see a further low ball offer attempt in a fire sale but in the absence of that building a holding to ride on CalE coat tails seems the most likely reason. If CalE fell through Griffiths and LO would look pretty daft with their holding as without the injection from the Bond and CalE the loans become a millstone for all equity holders.

alligator - if you take the view if a fund manager looking in this uncertain time for a place to get a return over next 2 years. They look at a sector of small caps fraught with risk. You then look at IOG.
You see a company with an interesting project at turn key stage with 50% about to farm out to a hugely respected and savy investor like CalE and on the verge of being funded by the completion of the bond and the CalE cash injection.
Why would you not hoover up shares now? And if you can't get shares easily in the market go for a CFD to get a position.
Feels less like a takeover to me and more like positioning before the investment round. But I agree Cal e are key here at the moment both as a magnet to attract investment and because the Bond funds per the notes to accounts are held pending that completing. The notes indicate its third party paperwork holding up CalE but they are equally forthright in stating that without Cal E the bond can't be drawn and the company would not be a going concern. So we can see CalE have been central to the Bond issue and are critical to the company. Without CalE then yes the company would have little choice but to go for a fire sale type offer. That seems unlikely as this appears to be a well orchestrated series of events here.

Trellis whilst it would be nice they did comment I doubt they will. Most companies when they do on such matters issue bland almost meaningless RNS. Shareholders buying or selling even large holdings is separate from the day to day running of the company until such time as they pass a key threshold. I don't doubt they may have asked them informally but doubt they would publish such a conversation.

Well Brubaggen added alot in 2018 at alot higher prices they crossed 5 to 10% when it was around 30p. So I guess if they held into the collapse and participated in the raise earlier in the year they will have averaged down meaning they would not be far off break even. They have reduced back to a holding close to where they were. Maybe its just their risk appetite is back at around 10% and not where they ended up. There can be many reasons funds shift - could be Brexit risk or even a conscious move to reduce O & G holdings. An explanation would be nice from IOG.

Spreadex is a long CFD is it not and I presume the identity of the holder of the position is not Spreadex themselves - are there any positions on the short interest tracker? So someone is expecting and has bet on the price rising. A bet on a rise on good results Harvey? Or a rise on CalE completion? Possible future offer? With LO increasing that points to someone seeing a share price higher than here you would think.
Can't see why LOG would use CFD's certainly not Long CFD.
So it does look like LOG were the earlier sellers but Bruggraben the recent seller which has in effect been a transfer to LO in the main as its been a pretty managed transaction
.
Trellis you are not wrong in that with LO at 20% and LOG about to get 30% a suitor only needs to really talk to them to get a controlling interest here. PI lost control here months ago but there are clearly now bigger players positioning themselves. Maybe just to be close to BH and CalE investment? But I would agree they are a threat - but any offer if it went ahead now would have to be higher than the one we had before but maybe not where it could or should be if the field was progressed more. Hopefully, get some news tomorrow - would be good to see CalE complete and then we might see a clearer picture emerging as more hands are declared. But yes it does look like things are going on here.

Because they have 30% of the issued shares to go plus warrants plus convertibles for any balance. They are getting plenty of cash back at the moment with the loan repayments. On average they will likely get a higher price than anything they sell now. Their remit is to liquidate and recover funds and getting some cash in which already included interest makes sense to me in that context while still holding assets that appreciate. Seems like sensible risk management to average out. Also if they have sold down any shares before conversion they can convert more of the loan to equity.

Could of course be another institution selling but LOG makes perfect sense as they are not here for any reason other than to liquidate their interests now.

To me it suggests there is an equilibrium in the market at this level. The institutions took plenty at 10p. PI's who were committed to the cause did the same so will also have filled up at lower levels. The daily trade volumes indicate little PI interest so no incentive for market makers at the moment to make a market - strange but they seem content to leave it at this level. The majority of the trade does seem to have been going on under the counter where LOG have a ready supply. So until demand picks up the share price is likely to stay muted.
The MM marked it up on the farm in announcement to 25p - but it then fell back with a mix of PI and LOG sales. Maybe the MM still have a few of those to shift?
Either way once the farm in funds are injected the case for a higher share price is stronger than a lower one on just about any valuation it just may take a bit of time to correct itself - but correct it will in time if the price lags the underlying value!

Big steps in reducing the risks over the past few months in the project (finance, exploration and Bacton/Pipeline).

Next will be confirmation of farm in and FID then we have Harvey results to look forward too while they get on with the execution phase awarding contracts etc for the development and spend the cash in the kitty.

In terms of the cash the bond seems to have terms to draw down extra if need be so we look adequately funded. Having a farmin partner should also ensure a good set of eyes are on the project execution and costs.

Looking forward to the story unfolding over next couple of years.