Member Info for Moleinahole

Pjohn. Going private changes a few things which people will need to ponder.

The board still need to run the company within the articles and execute their fiduciary duties. But being off exchange the requirements to report publicly to AIM rules on disclosure won't be there. Outside the annual accounts (increasing the importance of the PWC audit) its why working on communications to ensure we continue to get updates on progress is key else the only time to do it would be at annual general meetings. Maintaining visibility in the UK at AGM and continuing periodic shareholder meetings in London would be a good start This is more important now than before as we no longer have a nomad to watch. For me appointing an independent (from FRR past and Mr Hope) non exec should be a high priority for shareholders now to stiffen governance.

To me the incessant shorting attacks and blatant manipulation with whoever has been behind these 5m sells now stops. Finding a nomad with so much uncertainty would just have caused huge swings in price benefiting only traders and shorters.

The company is now however hard to value as you do not have a tradable share price as a proxy. So fundamental valuations become more important based on assets and shares in issue or revenue. At the moment with high debt, low revenue and no reserves that would be poor. But a campaign that delivers revenue and gets the assets onto the balance sheet would reverse that.

The risk at the back of people minds at the moment apart from the illiquidity problem will be that this is not the start of a process to part the shareholders from the inherent (if illiquid) value of their investment.

The upside should they navigate through the funding and Cayman case is now in the hands of the investors who are locked in. That is the trade off of risk to reward. Both have now increased.

I think being private is neutral to the Cayman case and neutral to the arbitration PSA and possibly slightly positive if it means some news is kept from public glare.

What is key going forwards however is a genuine commitment to grow shareholder value through the underlying assets in 2019. To that end the position on using the New York fund to remove outrider and invest and the ability to service the interest going forwards is of paramount importance. Without that they will simply run out of road on a going concern basis irrespective of the Cayman case outcome and then heavily discounted dilution while private becomes a risk.

At the end of the day the outcome here as it has always been - rests on finding and investing enough from here to generate more money than you spend and get the substantial asset booked in reserves. That is what I want to hear about not nomads and court cases be it in Cayman or Arbitration.

This event presents opportunities and threats to shareholders and how everyone approaches the challenge of this new environment will influence outcomes of which there are many possible

It is surprising sometimes what being civil to people can achieve. I mailed this morning when the delist tumult was getting going to ask. Simple. In spite of being busy he called back after the RNS.

I have a message to the prophets of gloom from me. Go away. This is a private company now. Just leave us in peace to complete this journey.

On my phone. He called but I missed the call as I was driving but he left me a message.

I would urge people to calm down and act rationally. I know it's not easy but people need to look ahead and not back.

"We will get there. Not a pleasant bump in the road but everything else is going ok. We are doing fine on all other fronts".

Zaza 17:45 Tonight

Please sleep on things and see how they develop folks.

Awax/Pophead I think you are correct.

As in many things in life I suspect this will not be simple for short CFD or Spread bets. There will be many rules in play for each provider. The company would become unlisted but the company is not insolvent or bankrupt or ceased trading. If it were I would understand the zero value pay out comments. Some companies actually voluntarily delist. Why would a betting firms would pay out at zero in those sort of cases? I would think many would close out positions at the last listed price having waited a bit.

I very much doubt if the company was solvent and simply because it has not yet engaged a nomad and was delisted it would be valued at zero. Even if it was then to be honest I couldn't care less as the loss would be on the betting company hence why I suspect its not the case as they are not stupid. Any loaned shares would still have to be returned to the lender.

The cost to FRR is reputational and the AIM fees should they choose to relist in future (£250k). I'd rather they spent that on a CPR to be honest first.

I have a company that delisted itself after a failed fund raise and has not relisted yet. It still trades and I have no idea how its held these days by my provider but I still get occasional notifications on it and it remains held at nil value in my account. So this area really is not at black and white as some are painting it. Equally this delist debate has also reminded me of another company that voluntaily wound itself up with assets and delisted. I have been waiting 2 years for the final distribution from that voluntary liquidation!

Yes I have done a bit of research and in the US this seems to happen to unlock deals where a security can be an impediment to completing a transaction. The investor needs to be sure that the existing security will be retired as they invest. Both parties need to protect their positions to ensure neither party attempts to disadvantage the other. I see the new loan notes as paramount matter in hand at the moment. The injunction staying enables that due diligence to complete and then given the lower interest and advantages of funding 2019 program if he blocks that then he will lose the fiduciary case. The delayed secured means he can't claim it disadvantages Outrider.

I'm hoping that is how this will play out. Without that funding the only option would be to pay the interest on the default and then we would still need to fund 2019 program or end up raising to oay interest to Outrider which no one would support. Funds need to go into the work programs. Unlike Block energy we have 200 staff and 2 offices and 3 field centres to pay for as overhead! Possible but too slow and would disadvantage us in the arbitration.

The injunction staying in place for long enough to complete the New York funding due diligence is the most important matter. The purported default must not allow the security to be enforced. I would not have expected any news on that as the hearing was unlikely to be addressing that as it's a separate but obviously related matter to the fiduciary case and was subject to appeal unless the judge has reimposed it following the hearing.

We may yet go delisted for a while due to the nomad hunt but with the funding in place and a funded 2019 program that will get resolved in time. Fending off the default and the replacement funding are what really matters. Landing the new nomad in time would obviously be positive.

Rainbow I saw your post yesterday. The reason the default and the injunction is so critical is that while delisted is inconvenient it's not terminal. Lifting of the injunction and non payment of the default could well be whether its intention was as a premeditated means to smoke out Outrider or just circumstance. To be clear i still think in the event the default was being enforced the company would at the very last moment try to settle the balance as a mnimum either in cash or shares as I can't see the board not resorting to other means given Hope had already indicated he would not block equity as a means to raise. I would be very surprised if that was not the intention all along but a dangerous game. But the plan is clearly to bring in a very large injection of cash to both finish the 2016 restructure and unleash the 2019 rolling program which finally unlocks taribani and starts delivering explitation and not just more exploration. For that Hope rightly or wrongly gets a veto due to the terms of the 2016 settlement. The delayed secured nature of the replacement funding to me fits that. The funding would rank lower precedence for the brief period the back to back transactions were executed. I can't see how he could block it as a director.

That is what all the presentations showing projections show but the missing ingredient has been cash for work programs in volume. That has been the case for a long time. Even in 2019 we will end up paying too much interest for my liking but that can be dealt with in time once they get some assets onto the balance sheet as things will look alot better. The terms and the ability to retire that rescue package are important. As it's secured it can pose as great a threat as Outrider in the wrong hands. I think our greatest protection at the moment is the boards continued alignment. We are currently very much in the same boat and rowing in the same direction.

Around us reman the loan sharks hoping for an easy meal. But we may yet be able to row quicker than they thought we could. Those who want to jump overboard on any lift of suspension. Best of luck if you do because right across AIM the sharks are doing better than the rowers these days and the number of sea worthy vessels is greatly reduced

Whamboy. I'm neither optimistic nor pessimistic.

In the end it will all turn as ever on the asset. If the 2018 campaign has indeed unlocked the oil in zone 14,15 and 19 then the way out via a funded program in 2019 with Baker Hughes in taribani is credible. If UD2 was more successful than some realise then that may be what the majors are really interested in.

The short term equation is simple. At 250 bopd the revenue would barely cover the interest let alone the general admin expenses in 2019. At 1000 bopd they can. As you increase beyond 1000 towards 2000 bopd trucking limits then there is a lot more free cash to play with. So 8 wells doing 250 bopd is all you would need for that. Is that possible? Well without knowing the current flows we can't be 100% sure but we can only work with the data we have been provided with so far and it does not seem unreasonable to me. The proof of the pudding will be the new York fund. If their due diligence indicates the flow rates are credible then they will loan. If not they won't and the company will simply run out of road to fund the current deficit and interest let alone future work programs.

The court case is uncertain but to my mind its all about enabling removal of Outrider from the mix. Hence the delayed senior basis. It would have been reckless in the extreme to have initiated this exchange without a backstop plan. So if the 2018 campaign has delivered good flows then the fund should loan, Outrider be removed and the future is then in the hands of the 2019 program with Baker Hughes. The court case poses a serous threat - not least because with no nomad equity is not an easy option to pay the interest in default. If the asset is there though I just don't see Steve and Zaza throwing the asset away over $2m interest (don't forget the court case is about fiduciary duties, the injunction is about the security over the interest. The two are different but related).

So it will turn in my opinion on the success of the work in the field in 2018 but I would accept that given past history many will not believe the wells could flow. If they don't flow then the real problem will have been the geology in the block not the funding (in which case not even Outrider will want the assets)! Once we have Outrider sorted out then they need to resolve the arbitration. That will be easier once the funding is in place.

But I would not under estimate the threat posed by the forces ranged against shareholders and trying to profit at our expense.

Well another big week arrives. I have not read what has been posted the last few days but even a quick look at this morning postings and I would say don't be goaded and use the filter facility. For those invested here this is a time for serious and sober thought not bickering and scraping. I would recommend limiting time on here and find something else to occupy your mind.

So we have arrived at this point in time. Many of us after a long journey with this company (in my case going back nearly a decade). We have seen many challenges and low points during that time. I have seen some of the best and worse of people here in that time.

The real issue at hand is finishing off the debt restructure started in 2016. The current terms are unsustainable and was aimed at allowing YA to recover funds and Outrider to do likewise (on an accelerated basis from July 2017)while making it extremely difficult for the company to raise the funds it needed to fund operations (which it had to do to secure the PSA and increase revenue to pay interest or repay capital).due to YA hammering the share price with its preference share sales.

The 2016 campaign did not prove enough to bring in replacement finance. Don't forget that also coincided with the drop in oil prices. So it has been the results of the 2018 campaign (paid for by share holders digging very deep) and change in oil prices that means alternative funds could be brought to the table.

I would like to think the current legal action was started with the replacement funding package already substantially in place. I also think the timing of the last share holder meeting was to reassure before this tumult we are currently enveloped in broke.

The nomad resigning was clearly not part of that plan and the fact they resigned with immediate effect when they did has been inconvenient to say the least.

The way forward remains the replacement funds on a DELAYED secured basis to displace Outrider. The 2019 campaign would then be funded but the company would then absolutely need to deliver a drilling campaign that produces very significant revenue as the $4m to $5m interest on the replacement loan will need to be serviced this year from revenue on top of the general admin costs and YA pay off in cash if delisted.

Should they not get a nomad on board in time this week then its not game over. It of course would be both very inconvenient and a real worry to the PI shareholder base left holding an illiquid share for the moment. But the equity does not just disappear - illiquid and higher risk till it relists. Given the persistent shorting attacks on the company there is an argument that taking the company off market has some advantages particularly if they do not need equity to fund the company via things like primary bid. We will get some news on nomad position or not this week! We heard nothing during 2016 legal battles either.

A few more twists and turns here yet I think and many possible outcomes

Pyro and yes that is the note in the unaudited 2018 and audited 2017 accounts that is at best incomplete or incompatible with the loan terms as we now understand them. I agree with Star rage I would rather have known about that important piece of detail before I doubled my holding since 2016.

With it the intentions were pretty clear that Outrider were trying to effectively get the notes they paid a fraction of face value back during 2017/18 by an accelerated extraction of cash from the business with the back stop opportunity of getting equity or control if FRR couldn't keep up. They expected FRR to raise a lot more money (from shareholders) to keep up but at the same time having to repay Outrider, YA and vendors while locking in Steve and Zaza into a forced conversion and with a charge on the assets and personal share guarantees in place!

The 2017 restructure was and is unsustainable and hence the only way out is to refinance. We passed that point in mid 2018 as that interest fell due This is at the heart of the fiduciary duty dispute (replacement of the onerous debt obligations) and could well also be at the heart of the arbitration (as funding for the work programs is at the heart of the PSA) and very likely why YA attempted to get the preference shares out as quick as possible as well.

I don't doubt we are at the moment aligned with the board. I also wonder who the funder was who locked in in Feb for 6 months and what they knew. The prospective profit share deal also makes more sense as equity or revenue funding models do not fall in the scope of Outriders veto but I think we just got to the point where it cold not continue and the issue had to be brought to a head.

Right that's me done. Fingers crossed for a more positive end to Jan 2019.

Pyro - I hold all my FRR shares but have lost the ability to use them as collateral so had to settle or alternative fund all the non FRR positions. It has cost me many thousands of pounds as I have had to do it whilst the wider market has been weak.

A quick post. Decided to stop posting and reading generally as the situation is obviously very serious and have little to add. Have a more complicated family life at the moment as well.

Delist! The suspension enabled my broker to remove my FRR shares as collateral on my account meaning I have had to react to the suspension even before any possible delist!

Puddy you recollection is correct. My concern was current liabilities in the accounts. The current liabilities historically were made up of interest accrued not paid, salary accrued not paid and vendor debt. The half year accounts do not split the figure like full year. Equally I knew from the accounts there was no interest on the notes in H1. So I suspected at half year interest (loan note to be paid in cash), plus vendor debts and possibly executive deferred salary. At the time we did not know why the loan note interest had reverted to a cash basis at a higher rate. The loan notes terms were amended twice since Jan 2017. Its possible the version in Steve affidavit is not the latest. Not knowing about the revised note terms was a significant missing piece of information and was why we could not understand why Outrider were seeking security enforcement and why people incorrectly linked it to the YA as a cross default.

Whoever prepared the accounts, signed them and audited them (PWC) be it RNS and 2017/ 2018 full years has not shown the correct information. Either Nomad and/or auditors should have checked them. The exec should not have signed off the accounts. Someone lower down would have prepared them possibly on a cut and paste basis so an error may have started with the original RNS being abridged or amended later. But a puzzle remains why Interest in kind was paid in 2017 H2 accounts. But the H1 2018 was accrued to pay in cash. Hence there remains a discrepancy between the note terms and the company accounts. The actual default appears to be the H1 2018 interest which at that time could not be paid as we had cash of @$600k. I suspect PWC didn't spot the notes change - but they would have spotted it in Q1 2019 for the full year 2018 audit where the current liabilities should be a huge red flag unless resolved in H2 2018.

Knowing terms now the 1 year lock in for Steve and Zaza and the expiry of the YA preference shares and their limit up to June 2018 make a lot more sense. The plan intended revenue by end H1 2018. UD2 would have done that but came up short.

Dulwich - yes they had a call to Houston so left early in Oct. The timing of the meet, holding it while we were seeking to find flow rates and the NDA names while the real issue was Outrider is now history.

I'm now of the view the restructure was designed to be punitive to Outriders advantage and exit of YA. I remain hopeful that the New York fund can to be used to prise Outrider out of the way. Funds in place with new Nomad is what is needed. Beyond that weak accounting and weak non exec needs addressing.

A wake up call to the board to get the funding sorted out. Never good getting left field news like yesterday and off the back of the Nov decision to delay funding to Q1 a further hit to the shareprice.

As for the FCA well they may have been the good samaritan to the ISA holders but they have caused shareholders here to take a hit and I would hope the loan is left where it is for the time being in the interests of everyone.

The underlying business case remains unchanged but the LOG piggy bank needs to be replaced and for that IOG will now need to work harder. The decision to delay funding now looks a poor decision. Could do with some good news now on the terminal or Harvey.

I'm absolutely 100% that Frontera don't auction and they ship when they have enough to warrant a rail delivery.

Someone has to lead on any large deal - so over time a consortia tends to build up to share cost and risk but that takes time. But given the pipeline is in place and only 30km away if there is a gas play here then it can be exploited at way less than Shah Deniz offshore costs and its nearer its main market. The other really interesting question is what has been going on in Schlumbergers block in 2018. The larger play is the gas - nothing may come of it. But you would think we have the best people looking at it with the infrastructure in place to pipe it if they see it as having potential.

Madpunter I have looked at the issues at Batumi and concluded quickly that at best it would have caused a short delay. At the time the email was sent however it would have been a hot topic as they would not have known it would get resolved. You can cross check the 23,000 barrels FRR had ready to ship against your auctions. At that time it would be the normal collected oil plus T45. The oil is shipped to Batumi in time for when a tanker is doing the rounds of the black sea. Its 100% not auctioned.

As for Exonn I would never rule them out and there is nothing to stop them coming back. But I've always felt they are interested in the vacant offshore blocks. The supposed interest in western blocks does not fit Block 12.

Our revealed potential partner is the best to analyse the gas. Their knowledge of the same formations at Shah Deniz and in Azer and their investment in distribution infrastructure make them an ideal partner as they bring so much knowledge. The twitter about big data and technology in oil exploration from a few months ago also fits in nicely.

Perhaps the sudden mobilisation of the workover rigs is no coincidence either. Nice for visitors to see a bit of action at next years wells........

Its not about $2m. Its about funding the 2019 campaign for which we needed $25m. With the restrictions caused by the oid notes and the interest I think they got to a point where a parting of the ways was needed. The old arrangement would have slow;y strangled us or dilluted us massively so it needed a bigger solution than raising a few million here or there.

I see the fiduciary duties as a means to an end and the main objective is simply to replace or blunt Outrider and raise the funds we need for 2019. Whether that's how it started out I some what doubt. But its where we have ended up. Equally losing Cairn I doubt was part of the plan but has been collatoral damage from the publication of the Court case papers.

Would think so. The strike at Batumi in April was only a few days - so would only have had a limited impact but obviously when your tight on cash it was probably not good in April when we had bills falling due. On that subject I saw Madpunter is still thinking we might auction oil. We don't. We 100% sell direct via Batumi. The government auctions will have stopped while the oil price is lower. They most likely will be waiting hoping the price rises in future and leave it in storage - but are nothing to do with Frontera.

Doubt it. Nomad should be an executive decision and at best need board approval where Hope has no veto built in the articles. To block a nomad appointment would be an even more agregious breach of duty than blocking funding!

Whilst it would be good if they can get a new nomad in place quickly, resolving the funding dispute is more important long term. I won't be happy if my ISA shares get pulled out of the Isa wrapper on a delist so I'm hopeful they will get a new nomad in place but I'm actually OK with us staying suspended while these important issues are brought to a conclusion and as others have noted anyone short at the moment who thought this was a slam dunk short has a few things to think about. Its not just the shareholders who need to be worried. The nomad resignation has frozen short and long positions while the situation unfolds.

The funding to me is key here. They need to convert the term sheet into a formal offer. I have done a bit of research on the delayed secured credit now and it fits a back to back transaction to me where it is used to remove an existing security backed facility. Behind the funding the results of the 2018 campaign are key hence the field trip as part of the due dilligence.

Pompey that's why I pointed out the link. Now would be a good time for some 'friends' to just help us out on a key Atlantic Council objective around Black Sea energy strategy.

I know we are going through a testing time but we are not without options.