Member Info for Moleinahole

1st September is the date to benchmark. I was there when it was made on the site visit - so give the guy a chance!

By then the current campaign will be done and we will know the revenue stream possible from the oil and gas. What remains problematic and needs time also is dealing with the SAOG and that is not as easy as some on here think it is and not something that should be done in public.

Prod - have a look at HNR then (one of my other investments) that is the type of technology they are experimenting with and to reduce costs have started to buy assets to produce the gas they need to inject rather than buying it!

I thought there were some information on the Azeris injecting their own natural gas on their oil wells as they become depleted to extend life.

But I think we have a different problem here in that the oil is relatively tight in the formation and comes out slowly so before worrying about enhanced recovery we need to get the primary recovery going! Hopefully they have solved that with the current technique.

I don't think we will be waiting 50 or 60 days for final T39 flows - I would expect some sort of interim result as we have has at T45 and Dino pending the final flows after 60 or 90 days.

Well other than the RNS and the economic models for both Taribani and Udabno - no but until we hear otherwise the economic models are probably the best indication we have of the likely outcome of the current programs so I'm not that concerned. The oil model was updated May 9th and the Jan presentation had rates that the company was comfortable enough to build into the published models on a gas well. I think those are the baseline cases now on which to judge the results when published.

The well is on the flat bit! In all seriousness though the topography there is why you have to go a different direction with the pipeline in our case back to the Mtsare facility at 41.522419, 45.5248907 - you can see the flare in that on google earth at the facility. While it would have been a shorter run west to Gardibani or south west to the export pipeline! The topography of the location is also part of the Udabno geology. You have got some significant geological faulting activity in that area and it is described as the foot wall after all.

When you see how close it is to the monastery and other wildlife areas like the Iori managed reserve based around the river nearby its easy to see why the company have to be careful even at a remote location like Udabno.

Yes - its opposite the monastery if you look at the company photos on twitter you can see monastery in background to orientate exactly. If you look closely in Block 12 you will gradually learn what the soviet well pads look like. They tended to build a raised concrete base to rest the rig on. If you look at taribani to the left of the field centre you can see some good examples which are a good sign if you scan around block 12 for old soviet sites. The old satellite of UD2 site didn't show much but TOT confirmed the location when he visited.

If you follow the road back from Taribani you will be able to see the rail head at the first town north 16km down the dirt road and where it rejoins the main west to east road to Tblisi.

Timster thanks for this daily thread - add Niko to that - we have the 2 instalment of cash and likely drill in Nov....

Taribani: 41.331332, 45.9943245
Udabno: 41.4576789, 45.392345

Dino is to the left of the centre cluster of buildings about 100m, T45, T39 and Niko to the right about 500 to 750m.

But you are probably wasting your time. Once the rigs are removed and the well is under test there will be little or nothing to see even if you paid for near time satellite it would not tell you what is going on underground. You are better waiting for the results. Also be careful if you look at images from UD2 location as there has been pipe laying in that area around the hydro schemes which clearly shows in a lot of relatively recent images so you will see images showing pipe laying all around that area that is nothing to do with Frontera.

Chris an interesting read.

Depending on your appetite for Georgian AIM oilers they are interesting with such a low MCAP but if they can get the old worn out fields to flow will be interesting. The important bit however is the Schlumberger bit where over the next 4 to 5 months they are targeting 1000m gas play. Well that puts our 3000m section inside UD2 into a bit of perspective. Irrespective of what happens at UD2 if the adjacent work in Schlumberger block proves commerciality then Block 12 becomes all the more attractive.

There is absolutely no point in issuing an RNS that does not say anything substantive. I don't know what you think is happening with 4 wells under extended test other than what has already been said. Timster daily post sums it up.

There is other news on the board non executive and funding/ plans for Q3 into Q4 and the rest of the 2019 campaign. But for the moment all the available equipment and capital is deployed on the 4 well campaign.

All the RNS have done this year is help traders so I'm actually also coming round to the view that less will be better in the long run. If they issue early results they are criticised if they wait for stable results they are criticised. When results are issued people sell on news.

I've seen it all over at HNR this year where they tried what some posters are suggesting here. Same result. The frustration is the Share price not what the company are doing operationally with tight funds while still paying down debt.
If we had more funds we could do more. We don't so you have no choice but to wait.

Keep up Devex we were on the EDI website debating the contents a few weeks ago on here!

They started up just as our campaign started and we seem to be their only customer but they are all former members of service providers we have dealt with.

I think that zone 19 could flow better than the higher zones. Must admit was hoping for a bit better on the initial flows from T45 but they are not pumped so would be a bit higher once pumped per the WHI models.

I suspect it's as much about reseves as revenue. Zone 19 combined with the new well economics, the extra zone 13 and better permeability/porosity should mean the reserves you can book and use to leverage loans or extract a better price in a farm in or sale.

It really does all come down to what each zone will flow now. Zone 9 is well understood. Zone 14, 15 and 19 all had issues in the past. The current campaign is proving the technique for commercial production in 14, 15 and 19, it's cost and the results you can expect from each zone. Zone 9 was already understood and the basis for the commercialisation in the original cpr. You can make a bearish case from the move to zone 19 being due to poor results from 14 or 15. But I think that is less likely given the Niko funding arrangement as if there was any doubt they would not participate on those terms. Going deeper and therefore delaying T39 monetisation suggests to me that T45 and Dino must be doing reasonable bopd.

Yeh tablet being helpful. Keeps changing things.

Whether you believe SOCAR are a potential partner or not (I still see them as a competitor) they do have a role to play in distribution. The shortest route for oil production to go via pipeline if you don't use the rail head is to pipe just over the border to join the pipeline running through Azerbaijan.

The gas is easier to transport and would justify a bigger investment but assuming you start near udabno the nearest point could be in Georgia at Gardabani near the power station.

The accession of Georgia to the energy community and the break up of some of the gas monopoly which you guessed it involves SOCAR as a main protagonist in addition to Gazprom in the mix makes for interesting politics.

So SOCAR are an important stakeholder inside Georgia and if Frontera really have got a significant local supply it impacts potentially both SOCAR and Gazprom contracts in the long term and indeed gas transit to armenia let alone longer term gas supply to Europe.

So whether SOCAR are a potential partner or not they are someone the Georgian state and hence Frontera will end up having to deal with not least because of the location of infrastructure, it's ownership and existing gas contracts particularly if as is currently planned we connect to the local grid and not the international pipeline for gas.

And yes given the history Steve in particular will want his money back and more the whole episode ultimately left Steve holding the baby here as those from the Bill White era exited! But if they did do anything with them I think it would be with a big American brother to act as counter weight to any monkey business. I don't think Steve and Zaza think their loan note haircut will lose them money in the long term but equally I think they have learnt to be careful with governments in the region.

Thanks Toatie aware of that but does not cover the extra 300m of drilling they did after 1st June on T39 that Free was particularly interested in. The 6 inch hole would suggest 5 inch pipe like T45 though at Dino and probably T39. T39 was 8 inch to take the 7inch down to 2800 which was possibly an early indication they were going deeper otherwise they would have done same at T45 and Dino and run the final part as 5inch. At the time we found the EDI info we obviously missed that little piece of detail!

You need to look a bit higher up into the givernment! The current president and his family controlled SOCAR!

FRR had taken out a large loan with EBRD for the field development. To pay the loan FRR needed to be selling oil from the fields. The government failed to pay them for the oil. Leaving FRR unable to service the large loan. FRR I believe tried to get round this by selling direectly abroad. The state then used their customs service block that and seize the oil. in the end unable to service the loan Frontera had to give in and the state took the assets back. This happened because the EBRD had taken a charge on the assets and sold them back to government to settle the loan.

When it went to arbitration in Stockholm Frontera only got back the cost of the seized oil shipment $1.2m.

That is why there is a serious problem with SOCAR and FRR and why FRR are very sensitive about borrowing I suspect and have relied on equity pretty much since then. So when people wonder why the company might be sensitive around an arbitration note the above. I don't believe SOCAR would be involved personally but they are so done you probably have to deal with for distribution.

Yes indeed I have also been on a learning mission on the subject of production tubing hence why I'm interested in how its done as like you its not immediately obvious. Baker Hughes also seem to have some kit that might enable the zones to be separated. The possibility when there is no time frame would be that you produce the high performing and highly charged zone 19 only until the pressure drops then the higher zones 9, 14 and 15 rather than producing all straight away.

I will make some enquiries and a Dustin video or something on the website on this would be greatly appreciated I'm sure as its not in the schematics for the wells we have seen.

Free - No I think its the same but it looks like the 7" possibly went deeper at T39 but it depends how you read the 2nd paragraph so it might not be that different. The T45 schematic was 7" 29 PPF casing to 2399m and 5" 18PPF down to 2650m. Dino the old well was 7" casing and they have no said what they planned or did on the side track.

Chris I would really like to see some research how you produce an oil well across pressure differentials posted from those of a technical mind. There is new information on T39 from the last RNS - but yes UD2 is a wait as is any extended test. As I posted yesterday Cuadrilla are testing the gas well at Preston new road in Lancashire next to me for 6 months.

I went on the Georgia news sites last night while watching the football and our old friend KK was banging on about banning old imported cars to improve the environment in the capital and doing MOT's on cars. The incident that brought down the government around the teenage murders is ongoing but the main item was the small matter of the support Georgia were getting in advance of the upcoming NATO summit. That might be a key date to watch - not an excuse for results but a key date in the wider political climate to be watched as Georgia continue to get a lot of support from both Europe and US.

Free - T39 is virtually next to Niko. They know the geology around that well from the logging of Niko. So I think it was something they had in mind as Niko is on top of the best part of the cluster of wells at the taribani field centre.

Whilst the soviets might have extracted oil mainly from zone 9 I don't think they got much out if any at that deeper level as their drilling and completion technique was so poor.

I still don't know how they would equalise the pressure between the zones. I have done a bit of research but not identified what they are likely to be doing technically or how long it takes. My simple view of things is that if you have a higher pressure zone below it would inhibit production in the zones above until the pressure equalised. in the past the position was you had to produce either side of the pressure differential not across it. And that was a conversation I had with the team on the ground in Georgia next to the Dino well with the guy who actually drilled it in Auguest 2017! Maybe Dustin is bringing some new ideas into the field hence the change of tack and they can somehow isolate and produce across the pressure differential.

If they can do zone 19 then maybe zone 25 is also on the radar for future drills. The question remains why. Well if the wells are economic at 200 bopd (unpumped) and pay back in 250 days and the extra drill only costs a bit more but increases it to even 300 bopd (unprumped) it adds $1.5m per well per 100 bopd. You can then scale up the result here in increments per well. Say T39 zone 14 and 15 dropped back to 100bopd then the extra zone adds helps. If the well really did 1000bopd at $70 a barrel and costs of $10 it would be worth $15m a year at 500 bopd $7.5m.

So yes its an interesting development and yes I can't see any reason why you could not repeat across the wider block at both taribani and mirzani . They have a hit list of 20 wells that could be revisited to use the top 2000m and sidetrack or deepen in taribani alone.

Of course it all depends on how sustainable the flows are hence the nervy wait. But even at 100 to 200 bopd per well scaled out this is how you develop this field.

Malcy does meet with the companies he blogs - know from my other investments and have met him at events. But my observation is that he is not as well informed as committed long investors in the small caps as they have the advantage of knowing the individual companies in and out in great detail. He has to cover numerous companies and talk often at superficial levels for podcasts etc. So he is useful at times but no substitution for building up your own sources of information and knowledge about a company and where possible meeting the senior team yourself.

IOG management I would like to meet face to face at AGM or an event as I am impressed by them and in the past they have responded to email enquiries.

Punky nice to see you back again hopefully in time for the show - still trading via spreads on IG I presume!

You would think any book on a spread bet like IG would be mostly long and at this level they might have taken some large bets on and have to start looking at covering the bets hence limiting further exposure. So I would take that as a good sign. As I said yesterday the little spike up might have also caused any short bets or CFD's to close and that might have contributed to the volatility yesterday. If there were fewer short bets that would also change the balance in their book. Besides any sort of charting logic IG employ to support the pricing and bet sizes must be showing the probability is a move on the upside than down - hence why you are back I would surmise.