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...or the people looking at it under NDA and they like what they see first of course......

Plus a portion of the cost of the 175 well production program to go on top as well. So the PSA split is not an issue for FRR (though is possibly one for SAOG!). Should FRR ever be forced off the license the $400m is lost.

If FRR can show the market the revenue accreting from flowing wells in taribani then it is game on here.

The sums on the cost recovery pool for the oil alone are worth multiples of the current MCAP even before you value the actual reserves. For the oil the flows combined with funding for the field development means some proven reserves would be heading for the balance sheet. Even if its the conservative 117m barrels of taribani zones 9, 14, 15 and 19 then we are worth more than where we are now even with a lot of debt still on the balance sheet.

Then you value the gas a conservative 12tcf with 70% recoverable and the other fields - Basin edge alone could have another 1bn barrels oil. The lower zones in Eldari are not known how prospective they could be but Niko flowed >900 bopd zone 19, 22 and 25 years ago. The interest in Eldari b is the anticipated production profile it has a very different curve to eldari a. I think the T39 test is the key here. They want to see the flow from the eldari b fits the profile they expect compared to same periods for T45 and Dino zone 14 and 15. They seem to have deliberately avoided adding the zone 9 profile as they already have that data from multiple wells. Maybe Niko is not such a priority if they are already getting the data when they decided to go to zone 19 at T39.

Its hard to reconcile a decision to forego revenue and run up cost other than the NDA is for real and they have a plan to manage the short term liabilities.

The baggage we have accumulated from the past (YA, Outrider) and past under achievements casts a long shadow here. But its been another good week with the share moving against a falling oil price and risk off market over the past month with the shorters going very quiet. 9 months since last fund raise now.

Nice to see no obvious 10m share man today. Another day, another week closer.

Devex my interest yesterday in Neptun on here was prompted by Mike31 had not seen your post over on III.

1. You have also pointed to the issues even Exonn were having with government. The visits to Georgia coincided with that uncertainty and note the friendly tone of the discourse in Georgia.

2. With Exonn looking at the western blocks having finished exploration in offshore Romania it will have naturally freed up local resources to look at other prospects. I still think Exonn will be looking at the offshore blocks. But while looking they simply would not overlook the onshore prospects following the trend from Shah Deniz through Azer and Georgia and then across the Black Sea to Neptun especially with FRR connections. So they must always be a strong possibility for one of the NDA majors.

3. The large Moldova concession at Dobruga basin and the extension of it Frontera are looking at in Ukraine are not that far away from this area of exploration activity by Exonn. I had never really appreciated that they were that busy in the area. So while Exonn have the deep pockets for offshore exploration Frontera has concentrated on trying to get some Moldova licenses when the commodity prices were low which long term could be very valuable and a canny move. Zaza was excited about Moldova in 2017 and was exited at the already flaring old wells they have looked at in 2018!

4. The amounts invested for the offshore is staggering. For next to nothing a major could sink a deep exploration well into Block 12 and see if you could tap into the same rich reservoirs they are finding around us. Maybe that is exactly what Schlumberger have done in Block X. The economics if the resource is proven in Georgia is very attractive with infrastructure pretty much in place.

5. Then you have the intriguing development of the pipeline buy-in and its timing.

Everything points to Exonn having a very serious look at Georgia. So whether they turn out to be the major NDA or its someone else with Schlumberger also busy and FRR bringing in Baker Hughes there is no shortage of Houston based US companies active.

We have entered a quiet period. But it won't last long - so hopefully some of the thorny issues are getting resolved quietly in the background before the newsflow starts up again.

Timster I think it will be the first drilled simply because the top of the well is in good condition to deepen via a side track. Its also in pretty close proximity to T39 so will help with the modelling/testing. They also went deep in the past and got good flows from zone 19, and 22 to 25. So its known to flow at 1000+ bopd from 19 to 25 until it silted up due to the poor drilling. T39 should have proved the technique to revisit.

So the big question you pose is who will be doing it?

Option 1 - You would think you would get the same team that did t39 - Ex Baker Hughes EDI drilling as consultants and the same rig up from Azer with Baker Hughes on the cementing. Funding then could be either still with money from the Hedge fund on profit share or BH do the profit share or even a surprise funding package from someone like EBRD.

Option 2 Baker Hughes provide more of a full service and fund either still with money from the Hedge fund on profit share or BH do the profit share

Of the two option 2 would make more sense if BH were going to mobilise for a fuller program of work into 2019.

I don't get the feeling the 2nd NDA is for the oil but it can't be ruled out. As the BH arrangement seems flexible enough to accommodate a large player coming in and BH reverting to perform as a service provider.

So many options here but mobilising a dill just for Niko makes very little sense. Weather may soon dictate a Feb start in which case the program could end up in Q1 2019. In which case a bigger role for Baker Hughes makes more sense as phase 1 of the arrangement. But you would think they would like zone 25 re-entered and flowed sooner rather than later to scope the full field development.

Hence why Exonn might have suddenly shown an interest on the other side of the Black Sea. What is clear though is that US oil and gas companies are showing a great deal of interest in the Black sea area. That includes Schlumberger and now BH as well as Exonn. Frontera have of course been here all the time but interestingly are playing in Moldova and Ukraine. So Frontera do fit well at the vanguard of a US presence in this strategic important region. It is well to never forget the purpose FRR was set-up by Bill White and do a bit of research around the people who set FRR up and why!

These trades have for a while been disconnected from the actual prices offered in the market. They are always well under the bid and its clearly a daily amount so its not random.

Either one of the larger holdings is clearly transferring or doing an orderly disposal of shares for some reason (most likely) or someone is cycling shares around trying to get a vwap (less likely). What they are not doing is trashing the share price - its a slow process. Could be tax could be between funds or whatever. As I posted the other day I can think of several candidates who could be shifting a few hundred million shares and we have seen things l like this in the past which ended with very large final closing transactions.

As for the tweets - I've actually not read them yet. My own posting on Exonn today is to give an alternative view as to what Exonn might be up to in WEST Georgia. I do think they are looking at the offshore blocks.

Personally, I think they are a good candidate for the second NDA but equally I would not bet the house on that.

I agree with others the tweet is most likely following a trend of tweeting about the Georgia. A large part of the beef from SAOG has been Frontera questioning the ease of doing business image that the government like to put in their shop window. So I see this in that context first - promoting Georgia oil and gas. So Aubree I really can't see anything wrong with it.

But having spent a bit of time looking at the offshore Romania plays that is something I will now be watching as Exonn are due to sign FID on that this month but also the Romanians have just passed some changes to taxation that the explorers do not like. Given Frontera are in Moldova now and our fracking team came from Romania I think its worth looking at the area and in the process that might throw up some possible connections.

Mike just as an aside while searching for the map for you I actually learnt something so thank you! Well when looking at the offshore block.

http://business-review.eu/news/exxon-mobile-to-lease-staff-for-natural-gas-exploitation-in-the-black-sea-169438

It seems Exonn are very busy off Romania at Neptun Deep for gas which I had not really clocked. Now that is also interesting if you follow the trend from Georgia to Romania/Moldova as its been Frontera theory that this is all part of a larger play. So that would make their interest in the shelf on the Georgia side a good fit.

As I say does not mean they would not also follow the trend towards block 12.

Mike the images are courtesy of Frontera if you look carefully from Zaza presentations!

The simplest map for the moment is the map at:

https://georgiaoilandgas.ge/georgian-oil-gas-industry-history-and-highlights/

You will see the western blocks offshore and a few onshore vacant. People should not rule out that Exonn could be after those blocks but that would not rule out also taking an interest in block 12. Schlumberger in block x, Xi and IX sticks out when you look at our near neighbours. The block energy fields to the west of block 12 show just how the fields continue on trend from east to west. The study program the GOGC are interested in promoting is to a large part about investigating the bit in the middle but also a bit to the west.

Plenty going on in Georgia at the moment.

Mike just do a search on Google of Republic of Georgia license blocks. You will find several nice maps showing the blocks and who has the license. Depending on what they mean by Western it could include the blocks right up to the black sea as I still think the exonn target could be the offshore blocks ex anadarko and where BP were part of the original prospective consortium.

I could post the coordinates but that is easier.

With the share price at the current level the question should be is it priced at the moment for a major service provider, a major or a super major? What we are not expecting is another Varang - which could not be classed as any of the previous classifications but arguably that is what we are currently priced at.

Come to think of it. Those huge trades were executed at prices around this level on 2017 - so who knows maybe those shares found a temporary home and have been on the move recently for some reason!

Aubree - I know people are fixated with Exonn and I would not rule them out but they are not the only contender here.

If the encoding behind the 10m the other day was accurate indicating it could be a institution shifting a book through a MM then the lower price might make some sense if the under bid sells were an interim price and then there is some sort of settlement later on completion of the whole transfer or a very large final movement as the book transfers. We saw something similar in Jan 2017 when it looked like Uniserve and Craft were selling and it finally ended with a couple of very large trades.

Aubree - I can see Schlumberger over towards Basin edge as a separate deal in the future once the arbitration sabre rattling is resolved. Would never rule anyone out. But just can't see two service providers in that part of the block.

Frontera had an arrangement with the chineese several years ago. The chineese failed to pay to meet commitments and the farm in was terminated - one of the reasons FRR struggled post the assets in azer being appropriated by the Azeri's in the period up to the Russian invasion in 2008 and the financial crash!

I would find it hard to see beyond a US company leading in the first instance here given the lobbying and US Govt interest that has been shown. I would find it very surprising if the current incumbants of the white house seeing a US company ceding a strategic placed asset to china!

TSBS that is not entirely true. Look at the XTO comparison that Steve made that I posted yesterday. If the price is right they would deal - the ultimate objective is to explore and then handover but only at the right price. Exonn would not be interested in FRR as a company only block 12 and my own view is that the big boys are interested in the gas and at the moment its just a little too early although we don't know for sure what was learnt at UD2. Interesting no results yet I have seen from schlumberger work in adjacent block. They should have that well done and on test by now.

Time is ticking on - next announcement could now be the AGM at this rate with outside possibility of something to vote on. We surprisingly still have share headroom available at the moment and we a month further on and no sign of the "imminent" placings some have been saying was coming all year and that is inspite of weak half year numbers! Its interesting the Outrider action has gone quiet - need to start trying to check court listings for any possible movement but would not be surprised if that is resolved by mediation like last time outside of court.

No fegl do the work in the field on the block 12 license as a wholly owned subsidiary. It would mean the interest for me is limited to Georgia and does not extend to Moldova. Would not read too much into it.

Dave I would say the geology has been a major problem here for many years and yes it has not changed but finding the right technique has been a very expensive learning curve. Its proved problematic at taribani - influx of sediment due to poor well bore having used too much weight when overcoming the high pressures as you get deeper in the sandy sediments or at basin edge where the kit was just not strong enough to drill deep to hit the target. Time will tell whether we have really solved the problems when the flow rates become commercial volumes. Till then I would say the Geology needs to be respected - the gas in particular is early days in finding out what volume the formation can deliver and how tight it is.

Kalan - the feeling is entirely mutual. I dislike traders and in particular when it is combined with chartist fundamentalism (like PJ the other legendary III chartist - proclaimed its going to 0.0005p and nothing that actually happens in the company makes any difference - onmly to see it rise to 0.008!) but I dislike shorters more. You take a short term view that I am simply not interested in. But your ability to trade a company relies on a core of people who invest in the company and hold the equity without whom you would have no pitch to play on. You follow a share price - I am investing in the company and am more interested in what is actually happening and learning at the same time. If investing was just about making money then it would be of considerably less interest to me.

As discussed last night we seem to have someone doing some sort of portfolio trade with the market makers who seem to sell under the bid. Now I wonder if the odd addition of extra information in yesterdays trade (not there today I notice) has been helpful. If this is the first movement - the minimum guaranteed price it may go some way to explain the cancellations we have been seeing as the actual value traded arrives later hence the cancellation and replacement a day or two later.

Its certainly leaving the market makers some stock to process every day. With volume they have been dropping them in, other days they have feinted rises pushing the offer up to attract buyers worried its about to move but then other days have gone very defensive with the wider spread.

Would love to know who it is and why they are executing this transaction but I don't think it alters any of the underlying investment case here.

Spent a fair bit of time re-reading the basin edge stuff last night and the investment case there is very interesting. There is a lot of very conservative estimated oil in place there in what should be a high flowing formation based on analogous plays on the other side of the mountains. The historic drill cost has acted as a barrier to FRR but a bigger player would have no trouble picking up where Frontera and Canargo left off in the Basin edge in the next block now with schlumberger. One for the future but easy to see why it might be subject of an arbitration as its worth fighting over.

It was showing as a normal O trade - but the extra info is attached in the note then.

Doesn't help much but would tend to confirm its part of a larger disposal or purchase hence eliminating things like shorters or PI's. Would be interesting if all the discounted under bid 10m fit the same description. Would point to an institutional transaction to me.

N: Non Protected Portfolio - A non-protected portfolio transaction or a fully disclosed portfolio transaction. Normally a transaction of a number of stocks dealt with by one market maker at an agreed discount to the market price.

P: Protected Portfolio - A protected portfolio transaction or if reporting a trade resulting from a worked principal agreement for a portfolio transaction. Like a non-protected portfolio but the price dealt at can be amended if the market maker manages to make a 'good' profit.

Was it an N or a P trade?