Member Info for Moleinahole

Dan - I have never held a share like this - let alone for as many years as I have, You are of course right that too often the city knows more what is going on (not necessarily news) but through trading requests or preparations for placings via Brokers and MM. That is AIM. In the great scheme of things at the moment this rates quite low on my FRR scale of "shocks". I do think it has likely caused a huge amount of instability in the underlying trading book however and there is a bit more to what is going on for us yet to see.

Steve - Frontera are saying they did not execute the August conversion. It is not 100% clear who inititiated it or why they can be disagreeing on the number of shares - that can only be based on the price. However, as I posted earlier there have always been provision in the YA SEDA transactions around shorting giving the company counter rights on the final price. There may well be such provisions in the preference share agreements.

The fact they then tried to do the sept tranche so quickly as shares (when its the company right to convert in cash or shares) will not have helped matters. I don't think they could have done that without deeming the august dispute as having ended the company right in that regard).

Yes they are not issuing them the shares until its resolved and then YA have taken their bat home and said they want to be paid the whole lot in cash.

Dan - i think the answer is in your own reply. Frontera tend to say very little when legal advisors are engaged. Its probably as much an American thing. While they are negotiating with a party be it the arbitration or YA they say nothing in public. I'm not sure the notice should have been RNS on 28th aug or 3rd sept a case to delay while negotiating can be made but wold hav eben better to put a holding statement out but by 12th or 13th sept it should have. But I expect they were hoping to sort it out behind the scenes like they have done a few times to get YA to moderate their claims and come to an amicable agreement. This time for whatever reasons that has not happenned and YA seem to have shut up shop and not responded to the company.

If there really is now a problem with shares sold into the market and they didn't arrive then the MM and YA have a problem. Maybe they sold even more to try and close the gap and the shares were still not shaken out (remember the MM still have to find shares for the rise on 3rd Sept) then could they have a problem at the price pre-sold must have been based on them thinking they were getting around .0022p for the shares they sold in the rise on or after 3rd sept at prices from 0.0022p to 0.0045p. Will go along way to explain why we had the persistent sells at under bid around 0.0033p. If they have pre-sold they have not lost money yet as long as the MM actually had shares to cover the pre-sold short position.

As I say was hoping we were leaving these merky waters behind but obviously not quite yet. But another what I expect to be short interesting chapter has started.

Well not the RNS we were wanting for sure. I have done the back calculations and they pretty much tie up. There are a few possibilities here and alot will be pure speculation.

The terms of the YA arrangements have always had conditions around shorting. One possibility given the way we got pushed down to the low price they have used for the conversion was that the price did not drop there by accident.

The notice was submitted on 28th Aug - maybe the company were waiting till end of month to pay. The second notice on 3rd sept having already not been happy about the 1st gave them no time to pay so just doesn't seem right at all and was opportunist.

This then seems to have escalated probably because they shorted (pre-sold) and did not have shares to close the trade hence the odd MM activity over the past week.

It does not mean that the 3rd sept Major RNS was a false flag - though it could of course never be ruled out. You could make the case that YA were trying to get shares.

It does not mean the flow rates are bad. Though they could be - as I said they could have been planning on making the payment at end of august and then got the notice.

Uncertainty is very unhelpful and will just make sorting out and finally getting rid of YA more expensive.

One of the puzzles however is why Baker Hughes and Weatherford got the nod for the current campaign. I keep looking for companies that use them. Even EDI directional drilling are ex baker Hughes and the drillers are Azeri with links to Qatar and the fraccers were from. Romania. Schlumberger conspicuous by absence!

Maybe there is a split with the gas and oil.

Certainly is alot going on in and around block 12.

I think we agree! I think initial part of any JV would be 3d seismic to fill in the gaps for the gas. That would only need $5 to $10m. Then each drill for gas is $5m for a new well.

Taribani is cheaper still it's ready to go at $3.2m a well.

Any JV could even borrow from. EBRD. It doesn't need to cost alot. But if a major wanted to stump up some cash then they would have no problems.

Makes you wonder who the vendor is who was happy to defer their $5m for 2 years!

He is talking about the economics of each well. The models are in the Jan and may presentations.

Drilling these wells if the flow rates hold true makes economic sense due to the quick payback. Once you scale out then the overhead costs of the business and general field expenses will get averaged out. The trick with taribani is to scale up to justify the cost of the oil pipeline.

Pecten a JV arrangement would not require large cash outlays. I think people need to focus on how a JV might work rather than dream of a home run being hit. I think we will be more likely to be running the bases to score here.

Yes good possibility. They are acting as sole operator in their block not a service provider - one step further than the arrangement they have with Sound oil in North Africa. I think that they are very interested in what we know about block 12 given it is the kitchen for what they are drilling in block 10. To get the full basin models you clearly need to cross blocks and share your seismic and other data. We have history with them as well - they worked on the shallow fields for us as a contractor so they have some knowledge of block 12. As a fellow US based company in Georgia would not be a surprise if they worked together at various levels.

Yes we have discussed that one before Bugsy - it links in with the big document on the GOG website.
But too many people were fretting over the communications quiet at the time so thanks for reposting it!

Why do you think they would possibly like the block back! I've said a few times that news that could cause a shift for FRR may not come from FRR. I think Schlumberger must be deeply involved in the work to re-evaluate the prospects in Georgia and I do think that the work that FRR have done has substantially contributed to the renaisance of interest. How people laughed at the 18bn barrel of oil and 202 tcf gas numbers Steve quoted. But you see them in that document!

For those interested in Geology and why Exxon might be interested see the below paper:

http://www.searchanddiscovery.com/pdfz/documents/2014/10610dembicki/ndx_dembicki.pdf.html

There is plenty of evidence why Majors might be back to Georgia.

I have never really looked at the offshore blocks but the grouping of majors who looked there in the past included BP and Chevron with Anadarko.

If Steve is correct and the Basin is charged with hydro carbons all the way across Georgia then anyone looking at Blocks 1 to 3 would naturally visit block 12 where you can see the same formation on land!

Yes that's exactly what I am saying when I read that document. But it predates the JV RNS it is listing things they have been doing not things that are yet to be.

What the document supports is that Exxon are actively looking at Georgia which we already knew. That does not mean they would not also be interested in Block 12. If they were going to invest in the country its entirely possible they would look at both the onshore and offshore prospects and other free license blocks.

Had a bit of time on my hands this morning to have a proper read after my monthly whiskey session last night.

First the bit about Frontera. Having translated word fro word and applying a bit of common sense the key is the word lorry that google finds. Doing it word for word I get the word drilling.

So I think my best translation would be: "Approval of two drilling licenses on the block approved".

Its in the same section that has the Schlumberger Approval to drill on Block XIB. (That's interesting in so much as it pinpoints the part of the ex Jindal block they are drilling. They are in the cluster of fragments of the block just north of where we were drilling in UD2).

Turning to the Exxon section.
My read is that it is about negotiating around the vacant blocks.

From what I can tell from looking at some basic maps of the blocks.

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

Offshore blocks: 1 to 3 used to be Anadarko. Now show as vacant.
Onshore blocks: 4a and 4b and 7a 13a 14 and small part of block 11.

The obvious block for Exon would be the offshore one. Offshore requires expertise and funds that is beyond the pockets of small scale land based explorers. If the onshore blocks were any good they would have been snapped up so to me they don't fit.

As part of doing my checks on the block owners I had another look at CanArgo. I had never really appreciated that they seem to be effectively part of the State GOGC. While looking I came across an old link from 2012. And to my surprise up popped a name from the past - our old friends at MND.

http://www.gogc.ge/en/page/kanargo-limiteds-axali-partniori-hyavs

So there is a link between GOGC and MND. For those of you unaware MND were one of the companies who took a very keen interest in FRR during the takeover sagas involving Outrider between 2013 and 2016!

Well Mtkvari Basin is the Kura basin.......

Coggy as far as I'm aware the old Anadarko offshore Black sea shelf license is unfilled. I have warned a few times when people get excited about Exon to watch the possibility that they pick up that license.

Dulwich - as its only the presidential election its less relevant to the day to day government but perhaps more important in the context of the trouble the ruling party had in Armenia recently. Georgia dream will want their candidate to do well - I believe this is the last time the position is to be directly elected. It would obviously be useful if you are a candidate to have good news before the election rather than after it.

So I don't think it changes much for Frontera - but it is a context people should be aware of. The US visit from the PM and team will however be interesting. Opportunity to mend some fences or have our case raised directly!

Well said Peakview.

If you like a measured and thought out game then this a nice solid and predictable growth stock. Apart from the travails with the heavy oil (which I'm sure the board have learnt and applied plenty of lessons from) they are now going about their strategy in a methodical way. masterstroke in securing the pipeline. Adding assets to the portfolio, securing funding and soon executing the plan towards first gas. They are putting together a nice little business here.

Wish I had a few more ticked away at this price to be honest as at this level we are all aligned - the board, shareholders and institutional funders.

The funniest bit is when you look at the post history and see which illustrious company RB40 has joined. A true honour for him!

Another one for the book. I'm seriously thinking of starting writing this stuff down to record this stuff for posterity. Bit like the hobbit.....

RB40 as I posted earlier the MM ultimately need liquidity to balance the books after the run up after the last RNS. 1bn+ shares would not have come from long term holders and unlikely to have come from the board (we are in a closed period). As Devex has demonstrated with his post there have been a few candidates who could have shares bought at under current price to release into the market. If there had not been a source of some liquidity the jump from the last RNS would have been much greater. Maybe the MM don't have access to as many shares as people think and as has been posted and discussed on here before these type of trades form part of their overall market making activities. Remember the MM can run short positions of their own.

Once we are out of the current T20 period after the last RNS we can see where we settle. That will be just in time for the H1 2018 results. Meanwhile the politics in the run up to the Georgian presidential election continue.