Member Info for Moleinahole

As Lubumbashi eloquently posted. Various parties here could be telling the truth here.

FRR have paid July. If that was the only one they believed they needed to pay. Statement true.

The matter in hand is why YA sold shares they did not have allocated on 28th August and after. Irrespective of an argument about price or who had the right to elect cash or equity you can't presell something that has not been issued by the company. YA must have done so at their own risk.

It's a good one this. But it will put a spotlight on preselling.

Even you could sell shares you don't have through a broker and then not be able to deliver the certificate.

This is a crazy situation. One that all the main parties would have best not journeyed down. Given the share price had stabilised Tuesday it was odd to RNS what they did yesterday. Saying nothing would make more sense. However, they felt the need to respond on the specific point around preselling of shares before they had been authorised and announced to the market. Quite how this has transpired be it conspiracy or cockup and who remains unclear.

The underlying problem and from where this whole saga draws its energy is from the decision to change communications strategy after in my opinion the leak of the possible arbitration. Ever since that event the company has been suspicious of organised shorting. The communication lockdown has resulted in instability and conspiracy theories abounding which has been magnified by the ud2 results.

The result has been a renewed skepticism about the oil campaign including whether the 2 major exist or not. The has enabled a renewed assault on the company.

The reality is that if the oil campaign has been a success they will be able to pay YA off in cash. If the oil campaign has been a success then the JV will follow.

Everything now turns on those withheld results. It's turned into a coin flip.

So have we seen evidence over the summer to indicate interest in oil fields in Georgia? Have we seen oil loaded into rail wagons? Why was the site visit put on hold? Why would you call out at this time over $265k? Why delay and change the oil program if you are short of revenue and risk going deeper? Why has the hedge fund delayed Niko funding is it really due to this latest dispute?

It's all very odd. The coin is in the air and ya and the shorters have made their call. If it was me I would only play that game as a desperate last resort or if I was playing with a double headed coin.

Let's see what today brings. Could really do with news on at least a date for the meeting as my diary is filling at this short notice now for one of the northern travellers.

CF73. There are still a few scenarios here.

Lets assume first the intention was to let them convert in August. The issue then would be the price. There have always been provisions in the SEDA to prevent pre-selling dragging the price outside an agree range. If they did not enforce those ranges then YA could drive the price down to get no only more shares but generate bigger profits on the shares they get. I think the drops seen over the days leading to a conversion in august combined with the noise in the market that there could be a placing shows sufficient probable cause that a conversion at a price of 0.022p on 28th August was achieved through shorting. In such circumstances even in a legitimate conversion request the company may have wanted the price rebaselined and requested that be the case. Did YA then refuse and to make matters worse carry on preselling for the 3rd sept request enabling them to not only try and claim even more shares at the low price but sell them into the rise on 3rd Sept at super profits? To then effectively attempt to destablise the company with their purported claim of a default?

I think that is the most likely train of events here.

Then lets assume the company wanted to pay in cash but YA wanted shares and while they disagreed YA went ahead and pre-sold shares anyway. If the shares sold were the ones they hoped to get from a conversion then once again I could see a further disagreement on the price due to the movement in price in the market as a result of their pre-sales whether or not they had the right to do it or not.

There will be a fine line here between a commercial dispute and possible exchange offences. I suspect its at this stage still a commercial dispute. But either way FRR won't issue any shares until its resolved. So any short squeeze will be small unless the MM and brokers can't balance out the book following the volatility. Hopefully it has forced close of shorts run by the parasites however as a secondary effect.

But nothing would surprise me with Frontera.

We have the advantage in that the debt is converted to preference shares.

It will be relatively easy if they have breached the terms to resolve even if it's just putting them back in the box.

The shorting is a different matter. As I say as a us based company even though London listed my preference would be SEC not FCA! Don't forget Steve N is now on the US chamber of commerce so Frontera are not like other AIM companies that YA might have tried it on with. We might be small but we are well connected.

I think them not responding to the 12th September note has pushed the company to a point where they had no choice but to go down this road.

Tsbs who knows. With shares traded that do not exist in the market in the same period as the 3rd sept 1bn share days the MM and brokers will need to sort it out and I'm sure they have by keeping the price down to sort the book out.

I think people were near the mark saying the majors would not want like the default note so I think Frontera are now rightly punching back to robustly defend shareholders and the company. He may of course be doing so with some important information tucked away in his pocket.

Tsbs forget about whether we paid in August or not. I think that will prove a sideshow if YA naked shorted.

Perhaps the 3rd sept RNS was forced by the unusual share price movements.

Frontera is a real life mix of Dallas and now Wall Street!

Go after then Zaza if we have evidence. We have all been watching it for years!

I think Frontera have finally had enough of the organised shorting that we have had to endure over the past few years.

As I posted the other day the SEDA and I suspect the preference shares would have had provisions around shorting. I hope this lands on the desk of the US regulatirs. It's long overdue for the practices of the like of YA and the other SEDA type lenders got shaken up. If they managed to finally catch a few of the carrion that accompany it that would make my day.

Interesting RNS.

Whilst that is unlikely to be our oil with any luck they are filling up our tankers at the rail head and shipping direct to market with 100% of it revenue for us.

Given the location you would think that is profit oil from the fields in block 10 and 11,

I would expect our oil to have been shipped direct to batumi and sold as we are not generating profit oil till we have recovered our $400m!

Mapp not very long given the nature of the dispute and the repayment schedule. It's in nether party interests and to me seems relatively easily resolved. Zaza off the back of positive flows could easily do a snap kick out YA raise. I'm sure many would happily join. Equally I do wonder if the Niko hedge fund rather than investing in a well might invest in FRR instead and the majors invest in the well as part of a JV.

Gli the cash position. At end of June will show us if they retained any of the Turkish court payment or the shroud they raised in Feb as contingency or whether they spent it drilling.

I'm really interested in any commentary around the vendor debt in the accounts to see if we are still just carrying it.

On a slight aside and a carry on from our debate at the weekend. I noticed while rereading the SEDA RNS from 2012 that Schlumberger were a little more involved then than I remember. They were involved not just in work on the wells but were involved in the reservoir modelling at the shallow fields and taribani. No doubt where they gained valuable insight. So at a geological and technical level we have worked with Schlumberger in mapping out parts of block 12.

Yes it will help but more in the notes to accounts for this event which has potentially created a short term liability. The revenue side is probably too early due to the terms on shipments but we will get a cash position just prior to this event.

Timster give them a chance. You are talking about US firms with legal teams involved. Any additional RNS will need to be worked around legal constraints and I would hope whatever they are doing in the background to resolve.

JR - that is too funny Pyro is talking about his TV sticks not FRR!

One for the book....

Pyro lets see - it really could all have started if it was a day late due to holidays or something like that and that both parties are telling the truth but its got a bit out of hand! If they then pre-sold the shares thinking they would get them and then the 3rd sept RNS lands with share price taking off then it has probably created a bit of a situation.

Again as I posted this morning this RNS may or may not reflect on the flow rates or 3rd Sept RNS - I think not and that is the real issue of trust than underpins todays drama.

Its like an episode of Dallas. JR will be revealed in October as our new board member and backer.....

Pyro you need to add the human dimension. I think that will prove to be a big part here. The why it was not paid in cash in August is simply not known.

You do have three options:
1. They did not have the available cash.
2. We had the cash but failed to pay the bill on time - could be as simple as the size of payment required extra signatures on the bank transfer in holiday season!
3. We chose to pay in equity but could not agree the conversion price.

Could that really have been included in an RNS while it was subject to a commercial discussion with YA? How do you do that while the price and conversion is moot it would in itself likely effect the share price! I think they have done so once the point became unreconciled - but the RNS should have been 13th Sept not today - maybe they gave them till end of week to respond hence today.

Whatever the cause clearly the relationship with YA has broken down for them now not to be responding to our 12th Sept request. This is exactly the same pattern we deployed with Outrider. Claim/counter claim then mediation leading to deal.

TSBS hence my guarded first post this morning. Tthey really could just be in dispute over the price as they said.

The credit terms and time to market mean there is an inbuilt delay. The first revenue would have been from T45 only - they would not have shipped until the train was full (when was the train inspection twitter?). Dino and T39 would be later. Hence why I have often cautioned about the early YA repayments being in shares not cash as I think the extra cash raised in feb and the Turkish settlement were being used for the monthly operational deficit in H1 and to fund extra costs at T39 deepening.

I wouldn't read anything into the RNS until we have more information and the H1 results due next week will at least give the context of the likely state of the accounts. The headroom available means that for this amount is manageable if annoying.

PG - who knows see my previous post though to TSBs. But it is unusual. Often in life big disputes can kick off from small trivial events (like simple administrative oversights) and then once ego's are in play....

If I had been messed around by the likes of YA for years and finally had the chance to kick them in the nether regions once I was off my knees and on my feet I might be tempted to square up to them if they wanted a fight especially if I had something in my pocket..

TSBS - the only reason not to do that would be if the shares had been promised to someone else - like the vendors or you were fundamentally not happy about the conversion price (which to me could only be if the company thought the price had been manipulated lower to cause an unfair exchange).

To me it has all the signs of a dispute about price of the August conversion that has now got out of hand with YA trying to force FRR to do something they are not comfortable about - hence the late notification in August of the conversion.

We have headroom to deal with them if required - but it would be better to raise that money off someone else and then pay them off in cash to stop them getting anything else out of us.

Lub - Headroom is 17.25bn shares 15.77bn issued - so at current price we could raise a bit over £4m from whats left obviously could be less unless news supports shareprice. Post some good news you would need alot less shares. So this is manageable. That headroom was set-aside originally for vendor debt not YA of course.