Member Info for Moleinahole

Lash on the gas I think the larger flow rates is entirely possible. But probably only if you stimulated larger sections. Remember we are working in a few metres of a very deep well which has 2000 to 3000m of potential zones from many geologic periods with a mix of conventional and unconventional gas. I'm still intrigued whether we stimulated the original stage 2 with more power or whether we went up the bore and are working a 3rd stage as implied in both the RNS and presentation. If so we will have explored and stimulated a wider part of the well. The important message on the gas they have been communicating is the scale and commonality in tested compsotion rather then flow. If they did get a high flow from stimulating more zones in ud2 they would have nowhere to send it! So I'm inclined to think ud2 is primarily a fishing expedition to gather data which I'm sure it's achieving. From here it would be 3 months or more to monetise it. I think the block energy work to the north of Ud2 will be interesting to see what they find and conclude. Traditionally that has been associated gas in those fields.

Youll have to speculate like the rest of us to answer that. In the past they would have not even reported what we have got information wise so we are progressing but always room for some more improvement. They have an opportunity coming up soon with T39 to expand on T45 and Dino if they so choose.

Lash that's my thought there is a pattern of traders, chancers, chartists and opportunists/shorters amplifying trends. In thin volume that is the case. Equally I'm pretty sure there is some sort of corporate transaction being worked on and we are most definitely inside potential vwap calculation periods. It's too easy at the moment to raise the spectre of dillution to settle YA balance and paint a gloomy picture. I would also concur that there remains a doubt whether the flow rates will be sustained on the oil. I would argue at the moment past performance does not mean that the current campaign which is on a totally different scale of stimulation to anything we have seen before can be compared and predicted what the final files will be. However, I don't think 2 investors have invested expecting 50 bopd! UD2 seems to be the result people are most focussed on and the sparse news on that is obviously unsettling some given the protracted work on stage 1 and 2 in q4 2017 and Jan 2018. I think having been harangued in Jan about UD2 they will play a quiet longer game with it and are as likely to surprise with an out of the blue RNS as not be testing as I have seen suggested. I still think the spoiler from the arbitration caused the share price not to react to any of the current news which I still believe to be all positive combined with some unrealistic expectations of flow rate on the oil wells. Again so far the results are fully in line with the production and economic models. Equally over the past few days you have had some macro economic factors starting to come back into play in the markets. The arbitration has done two things. First it has cast a degree of uncertainty into the pot. Second it gave the shorters and malevolents a stick to try and beat the company and its shareholders. Finally, I think it has altered some of the communications flow. However, the continued granting of licenses and Georgian developments at a politico/economic level would tend to indicate to me the Georgians are trying a Donald Trump style negotiation tactic.

The volume of these trades is low so they would not hardly even need to have done that. They could have traded a few on the way up and still sold them all and bought back as they are under the reporting threshold. Is not their usual method as they usually rely on the ability to presell at no risk in a gasp period and on this arrangement are guaranteed to get their money back in a rising or falling price. Also remember they paid a higher price for most of these except the early tranches. They also could not predict the operations or wider macro factors. It looks like YA but you can't be certain as i said last night something to do with vendor shares is more likely or indirectly to do with the mechanism of settling the ya rump. in the week before then YA become much more likely to be active. I would add I believe a motley crew of traders, chartists, chancers or shorters are most likely active here and have been for a while amplifying movement in both directions for the share price.

Zib I've never heard him say that but I know from several conversations and presentations that he will be happy not to have them around in the future. One of the reasons is he is well aware of their unpopularity with investors,but also to protect his own shareholding from dillution I think he sees them as part of our past not future. Revenue generation changes the dynamics alot and no institution wants a player like ya with access to cheap shares. YA were the main sticking point in several of the negotiations around the restructure as I understand it and it is no accident that since then they have used primary bid rather than the SEDA which is still an option. I bet their monthly conversion has been a persistent pain for the company.

Pyro my current thoughts are there are two things going on: Large vendor debt conversion before news. Funding package with equity element to settle YA. Reading 2017 restructure RNS again its striking that it was a one year plan culminating in June 2018 and the large vendor debt and the strategic industry partner bit is the two obvious incomplete parts. In terms of operations they only planned for 2 oil wells but we have achieved 3 plus UD2 which was only added back into the plan later. Beers next time well that's something to look forward too.....

Pyro the point of my first post was to demonstrate that YA are close too or have already broken even on the loan. The next bit whether it is paid in shares or cash is the profit. They might just be happy with their 20 to 25% and actually not have any doctor evil long term plans here. Whether its YA or another funding source coming in with some equity element is hard to call at the moment but it was interesting that the Niko non dillutive funding though staged was for much later in the year. Given they intend to do some work in Q3 not involving a well (seismic, pipelines and possibly CPR) those can't be funded like that so have to come from revenue, equity or a loan.

Exactly same in 2016 and 2017 when we had a combination of vendor shares (which were disposed of piecemeal without any RNS till finally gone) and YA SEDA draw downs going on at same time. For me the house broker has to know a fair bit about what is going on! The bounce when that pressure came off was strong. We never get the the bottom of those cancelled trades. What I am watching however is why they might keep gravitating towards this .42p level and appear to be designed to pressure but not collapse the share price.

And finally I have to say that compared to Wonga the APR is actually quite good................

Debt $ 6.2m+ Markup $ 1.0m+ Total debt $ 7.2m Redeeemed $ 4.4m- ($7.2m - $2.8m) 10% discount $ 0.44m- ($4.4m *10%) Total $ 4.84m- So of original loan $1.36m remains for them to brake even and that assumes they have not made a killing on the pre-selling above the 10% which they have! So lets look at the $2.8m. If Frontera can pay that off as a single lump sum with no additional interest. That would mean YA would have got a minimum of $7.64m for a $6.2m debt over 18 months about 23% interest. Running the debt on will just give them the 10% margin so another $280k. They are a pain more because of the pressure they place on the shareprice. Paying them off now does not make a huge amount of business sense to me but for share price preservation reasons I can see why you might be tempted. Now if the shareprice goes above the year end close ( 0.49p) then YA would increase their margin from 10% and instead convert at a fixed price of 0.49 whatever the future shareprice unless the redemption were rebaselined from June. That could mean that YA would be incentivised to get the price below 0.49p to re-baseline the conversion of the remaining $2.8 at that lower level enabling them to generate enhanced profit as the share price rose 100% at 1p a share or to get their 10% in a single conversion hence a price around .42p! So both YA or a potential investor would be interested in a lower price now and a higher price later. Part of the puzzle is the accumulated holding that mirrored some of the YA conversions but not all of them as reported by Reuters in addition to these unusual cancelled trades/transfers. Maybe the preference shares themselves are a tradeable instrument?

Or want to convert a large amount of debt at a low price due to a vwap. Or buy in a large stake at a low price in open market or at a low price due to a vwap. Or closing out some sort of hedged position. The volumes are under the 3% threshold so very hard to work out. Certainly going on with the assistance of an institution be they the house broker or another market participant - but odd that they can only be viewed on some platforms and not others.

I fully agree with Devex. When looking at the pieces of the zigsaw its a view that fits what we are seeing. Removal of YA from the playing board will simplify things leaving us Outrider pushed out to 2020 and the SAOG to resolve which could easily see a jv on an asset like Basin Edge with revised terms leaving everyone happy. I'm as sure as possible that Taribani, Mirzani and Mtsare as producing assets are safe for a minimum of 5 years and very likely as long as they remain commercial. As can be seen from some of this mornings posts putting a bit of modest pressure on the share price to frustrate and induce doubt works to an extent in getting a few shares into the market in low volume. Be interesting to see if we get some cancelled trades or other shenanigans later but I'm becoming pretty convinced in my own mind that some sort of transaction is being worked at around this level.

Indeed 3 carefully targeted 1m sells worth 0.02% of the company take the price down >4% back to this 0.42p level. The problem is lack of volume to counter the persistent actually small volume sellers.

Cheesie - there are always reasons for FRR to meet BP as we sell them out oil and have done for years. If you were about to produce more oil as a result of a planned campaign I would be surprised if a CEO didn't have meetings with their main customer. Enjoy Chessington world of adventure I'll keep an eye on the board today for you! Timster you are very mistaken if you think Zaza does not want to see all his stakeholders (shareholders and his employees) do well here. However, people need to let him get on with the job and if you don't trust him then I think that's what he means when he invites people to sell up as the company is bigger than any individual holder no matter how big a stake a PI might think they have in the company. Its a tricky period at the moment with the background trades seemingly determined to hold us around this level for some reason. So far there has been no bad news to justify the pullback to this level which effectively means the operational progress has not been priced in. There is no doubt that the company has been subject to a pretty cynical and determined attack to attempt to undermine and blunt the impact of the current operations. That has had an impact. But money talks in the oil and gas business and as Prod says investors don't lock themselves in for 6 months or promise to fund the next well bearing all the risk unless they like what they have seen and the economics of the campaign. If there is going to be a renaissance of the Georgian oil and gas industry with new players entering the country I know which block I'd like to be holding at the moment with a 100% interest. On the well test at UD2. The stage 1 work in Oct/Nov and 2 attempts at stage 2 in Nov/ Dec and Dec/Jan proved the quality of the gas and that is was extractable but highlighted the issues with the old soviet deep wells and tighter geology than they expected. It is a learning curve and they are evolving the process. The third attempt with more power and proppant has run for more than double the time of the previous attempts (in each of those they knew the interim result within 3 weeks). So I would be inclined to think that the result is better than last time and starting to show more of the potential but only time will tell. The important part is that the measurements and data they are getting from the well is what a partner with deeper pockets will be interested in when deciding to invest in a program involving new deep wells. I would be surprised if the deep gas does not prove to be commercial but unlike the oil FRR have very little long term data on the gas.

Why be concerned about CLN lock-in end? The purpose of the lock-in was to seal the deal with YA. The two are directly related. Likewise to get the two fund raise away in 2017 the board participated to give the investors confidence. I think you need to look at the boards holding in the context of a 20 year journey. It's pretty much a life's work. Zaza now has his son working his way up in the business. They are not going anywhere without a good return on their investment. Steve repeatedly said they were aligned with the shareholders and in time I think that will be the case. As for the 2020 CLN they will I think be dealt with from a position of higher overall company revenues. The taribani commercialisation should be in its acceleration phase by then even without any progress on the gas. The guys in Georgia will be cementing T39 at the moment ready for the next frac. That should mean that we should have some preliminary results mid June by which time Ud2 should also have had enough time for some sort of result together announced. So the expiry of the lock-in at end of June and the kick in if second phase of YA debt elimination is not going to be announced in a news vacuum. Right leave you lot on the board today off out to take advantage of this fantastic weather in Northwest.

Coggy has answered. The shallow gas is there but it's shallow and is not composed like the deeper gas and has water which is reducing the effectiveness of the processing facility. I think they knew this probably 2015 which is why they turned attention back to the deeper gas which was probably always the longer term target anyway. It's not really worth deploying capital in the shallow fields and I think that was particularly the case oncecoil price started to recover. In addition they were being discouraged on anything gas related by the government. It's proved useful in learning about the issues with the gas monopoly and obtaining the transportation license but it's not the future that is in deeper larger gas wells at $5m a go. The shallow gas is less attractive when you have deeper gas targets.

The logical initial SP related target has to be the WHI risked valuation around the .70 to .80 value. We should be nearer that after successful drills rather than .45p. With a bit of luck on the gas that valuation will go up as both the oil wells risk profile is reduced and more value is attributed to the gas. Beyond that a sensible mcap valuation based on our likely production profile with some basic multiples indicates we should also be looking at higher levels in the SP. The gas is really not priced in at all at the moment so I believe. So the Ud2 result is key but I think some further nondillutive funding should also not be ruled out post T39 and Ud2 results. the

At the moment it would be valued at not very much. That part of the gas play is 1tcf gas. The wider block is 202tcf but the company have settled on the smaller 14tcf cpr value for the moment. The bit that makes this difficult to value is that it is subject to only a preliminary CPR which is not detailed enough to book reserves. Any buyout would value the reserves based on the certainty attributed to it. So the more proved up the reserves the higher their value. At the moment they would be valued at maybe 2 to 5% of the value and possibly even less. The combination of Ud2 results feeding into a revised CPR with possibly some more seismics would attract a significantly higher value as the risk reduces. So at the moment personally I don't want a JV or low ball offer just for the sake of it. If the resources are there they become significantly more valuable with potentially a relatively small investment of time and funds.if the company is solvent then a slightly longer game will get a significantly different result. The valuation difference would be very large between proven and prospective reserves. The right deal where there is a JV to accelerate the exploitation while retaining a high % of the asset is a dfferent proposition as we would see more of the value as the fields developed. At the moment our mcap refects prospective resources. A priority I hope once we have stabilised the revenue side of the business and controlled the debt is a return to the CPR to enable better valuations of the assets either for resource based lending or a higher valuation in a corporate transaction. The company believe they will be a billion dollar company in the next few years. In other words an mcap several times higher than here. To get there they need to access capital to accelerate the taribani commercialisation. To take on the gas at volume once proven needs someone with very deep pockets and expertise in gas. I watched that rail journey program the other day where Portillo went from Georgia to Azerbaijan. If the geology is similar then logically there is no reason why the upper Kura basin should not be prolific. After all it's just over the border. Malcy seemed to be implying Block energy were to be watched in the blocks just to the north of block 12

With oil at $80 a barrel a lot of private equity and specialist funds become available to invest. The prophets of gloom have become accustomed to us having to get the begging bowl out and visit the Wonga lenders so they could short the company. They have specialised in identifying companies that end up in their clutches. Frontera are close to escaping both the clutches of the Wonga lenders having paid them off in full and as we leave them behind and the business transforms we will leave the prophets of gloom behind.

Pectren - EBRD would be a straight loan with interest or a bond and would be named. Unrelated means not related to Board (Steve or Zaza) and not Outrider (Hope) (important) and not YA (a preference share holder). Beyond that its not known. This kind of deal looks like a US investor who specialise in oil deals like this. The quick initial paypack and low risk make it relatively easy to fund like that. Once you have visited companies like that once and they have made money they can become a good source of funds to scale out a development.