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Looed: ‘…….That deal was completed about 6 weeks before the Ambassador meeting. So that might, at least in part, explain the Georgia connection.’

Hi Looed, what do you think could explain SN’s connection for being at that meeting, noting FRR dire (on the face of it) position with the GG and potentially an already expired PSA?

Practically, what i have seen is that majority debt holders (although minority in numbers), normally get their way and it up to them to convince the ‘little fish creditors’ to side with them otherwise nobody gets any thing given, especially noting the financial predicament of the company. But if this does not happen, then the Court nearly all the time approves the big holders proposal but this is a long winded process and perhaps Deloitte could play an important intermediate role here.

Similarly, its a bit like the small fish shareholders here giving it the big ‘un by taking the high moral ground and demanding us to contact the Liquidator because they have less to lose, compared to the poor old punter who has probably over invested. Sure, morally it sounds great but I rather be in SN’s camp than trying to be a martyr.

Tabs: “While we sit not knowing for years on end whats happening about our company they have meetings with all and sundry”.

This is a good thing, right? I mean a company that is financially insolvent, fighting on multiple legal fronts for years on end, yet somehow continues to be in the middle of some big meetings involving major companies and political figures. How and why? Plus, let’s be honest, we don’t know how dangerous these dark forces are but can we really underestimate OMF/Hope or for that matter ZM and his Georgian political associates given what has happened in the recent past (ie blatant lies, shameless back stepping, knowingly breaching market laws and embezzlement)? Then there is the ongoing liquidation process with FIC which could also throw up any thing. In fact you could even argue that there are some naive shareholders whose actions may have not helped either (I mention no names).

Having said all that, I am empathetic to the sentiments expressed by Tabs, especially as the ‘uncertainty axe continues to hangs’ over all our heads until SN speaks to us.

I agree A221. Consider the number of new wells FRR drilled subsequently to 2011 in MK, including working over and flaring the UD2 well, drilling 3 new wells at Traibani and undertaking new CPRs gas reports. I think also the advancement in shale production techniques may have compelled them to revisit B12. However the underlying premises is that Exxon continues to be linked with Georgia and SN through various of business meetings, which is the most intriguing part, but it could just as well be a ‘coincidence’.

Can you recall when was the last time Exxon looked at FRR’s B12’s data?

ToT - noted your observations on Block Energy because I don’t follow that stock. But agree that Schulumburger are, in the main, an O&G support company and a world class at that. At the same time, I do not underestimate the toxic politics in that country. But perhaps this has changed a lot from the Ukraine war and Georgias ambitions of becoming a full EU member.

On the video link, I couldn’t get the subtitles on but I agree that perhaps it is being ring-fenced for FRR to sort itself first. And the only reason why GG would consider doing that if there is already an agreement in place between the two US companies which has been shared with GG. Plus, I don’t think 1% of the block is going to get Exxon out of the bed but a JV for the whole block would be very exciting for all the stakeholders.

Also, in the Exxon article I posted earlier dated Oct 2018, they signaled that gas was their priority, and how much gas was estimated on Block 12 (via Mk Complex, Taribani and UD2 area)? 18TCF. FRR also produced some independent CPRs from Ryder Scott and Netherlands, Sewell & Associates to support their estimates. Lets us also not forget the substantial drilling and logging data FRR has accumulated over the years particularly in the Taribani field drilling down to the Eldari Miocene formations. And in Exxons world, time is money, so will not want to start operations from scratch ie from seismic to drilling. Plus, Europe doesn’t have the luxury of time as gas security needs to be secured asap.

Thanks gotreal…..’ If 100 entities are owed money, 51 have to agree with the propsal’.

However, plz explain what happens if 51 of those creditors only hold say 30% of the debt and it gets voted down?

Hi ToT - thanks for the research on Exxon. I agree with you that it seems Exxon walked away from Georgia and the Chinese stepped in. However the question is why is Exxon continuing to be linked with Georgia and as recently as the November 2023, business meeting held at the Embassy, co-arranged (and with special thanks) by SN.

Then the other major question is why B12 has not been tendered out by now? Sure, you could argue Georgia is still a difficult place to do business for foreign companies (recall Schulumbeger leaving and handing over its acreage to Block Energy) and perhaps there is still a question mark over the geology. Therefore, in my opinion, there is something to read ‘between the lines’ with Exxon, SN and Georgia. Also worth mentioning that the Ukraine war has probably shifted the political landscape in the country and are now more genuinely EU facing.

I have dug up the below article from Oct 2018, when Exxon was going to undertake hydrocarbons field study in Georgia. It seems focus was on gas even then but probably more urgent now for Europe following the destruction of Nord Stream pipeline. While we don’t know the conclusion of their findings, perhaps worth reaching out to them to get a copy if available; I always find Investor Relations more than helpful when you start off by saying that ‘I am a Shareholder and I need …….’.

Hence I find it hugely intriguing the continuing ‘triune link’ (SN-Exxon-Georgia).

Here is the article: https://agenda.ge/en/news/2018/2204

Agenda.ge, 24 Oct 2018 - 13:04, Tbilisi,Georgia

American multinational oil and gas corporation ExxonMobil has shown an interest in Georgia’s potential in terms of oil and gas, is going to evaluate the potential of hydrocarbons in the country’s west.

ExxonMobil signed an agreement on conducting fieldwork on hydrocarbon resources in Georgia with the State Agency for Oil and Gas of Georgia’s Ministry of Economy.

After completing the examination of the geological and geophysical data transmitted by the agency to the company, ExxonMobil will prepare a report.

The fact that such a large company is showing an interest in Georgia’s potential in terms of oil and gas is a promising fact of outstanding significance”, Economy Minister of Georgia Giorgi Kobulia stated.

Representative of ExxonMobil Jonathan Wilson said that they are happy with cooperation with Georgia and will be able to use the experience to study Georgian hydrocarbon potential.

We have worked for a decade in the Black Sea and the surrounding areas. And it is a pleasure to extend our knowledge and experience to evaluate the potential of Georgia. We look forward to working closely with the state agency involved in the gas sector”, Wilson commented.

ExxonMobil will provide trainings for the employers of the State Agency for Oil and Gas to perfect their skills in using the database and stratigraphic analysis.

Gotreal - thanks for providing the reference: “It requires a majority (>50%) of the creditors who represent more than 75% of the debt”.

So applying my simple theoretical example yesterday, let’s say there is a total of $30m owed to creditors, $20m provided by SN and $10m relating to YA, GG, Mourant and YJ. Technically any settlement would require at least 51% approval from creditors representing 75% of total amount owed which equates to the following imho: $22.5m (75% of $30m) and 51% of this amount equates to c$12m, meaning SN would pass his own proposal through if he is owed $20m for funding the legal cases. The point here is to demonstrate the principal and not the financial numbers, which nobody knows except Deloitte. So, imho SN has probably got this squared off (in terms of destiny in his own hands) and hence we see comments from the company that there is a desire to return FRC back to pre-wind up status, which took many of us by surprise (admittedly).

Yesterday I suggested that perhaps SN would offer 20c to the Dollar but now I think about it, it could be even lower as A#s221 alluded to. When OMF bought the CLNs, it was at 20c to the $ but at that time, FRR still had a valid PSA and was a publically listed company. Now we have an expired PSA , no share listing and a statement from Deloitte saying the company is insolvent. You can make your own guess as to what SN could offer in this scenario.

The only issue I see here is relating to GG. They will never morally accept this amount regardless of the creditor vote meaning a permanent sour relationship with FRR and therefore kissing goodbye to the renewal of the PSA forever.

Hi A-221 - The obvious question is how has FRC been able to finance all its legal battles over the years when the company has not produced much cash flow from its oil sales? So, if you recall back in the day, both SN and ZM personally extended RPNs (Related Party Loan Notes) which were charged at 10% annually and rolled over on an annual basis for many, many years. In 2017, these RPNs were converted in to equity at 1p a share, when the prevailing open market price was around 0.4p, thereby lifting SN’s stake from 6% to 13% and ZM from round 3% to 7%. I also recall SN’s original shareholding in FRR was c.18% at IPO stage but after the big $92m bond debt conversion in 2015, he was significantly diluted. It is also worth remembering that FRR Directors were never paid salaries as verified by the Audited Account, which were also converted in to shares at the same time of RPNs.

So, what’s my point? One way or another, SN has always had a strong hold over FRR and I believe by him financing the legal bills, he will sit high at the creditors discussion table. And if I had to guess how much accumulated legal costs could be when taking in to account (in no particular order) the Cayman’s fiduciary case, followed by California case, followed by YA cases in the UK and US, followed by the cases against ZM and Green Capital in Georgia, followed by the costs incurred from the Arbitration Tribunal, then i would say $20m plus. But how much money is owed to other Creditors from what we know? I don’t know as we have not seen audited accounts for many years, but let’s compare SN’s debt size to YA’s at $4m, Mourants at $1.3m, and Arbitration at $5-6m. Who else could there be? I think all the vendor finance was extinguished by issuing new equity back in 2017, so I don’t know. But going by my numbers, SN’s debt would represent more than 50% of total creditors dues, meaning that any proposal made by SN (probably via new financing), he could vote it through as his debt represents more than 50%. And I believe for a settlement proposal to be accepted, perhaps it requires a simple 51% acceptance from the creditors by amounts owed and not by number of creditors.

So how much will SN offer to the creditors on the $? I would say 20cents as this is the level OMF acquired the CLNS at but it could be much lower as you suggested.

Finally, worth remembering here that the money owed to OMF, was issued by Frontera International Corporation (FIC) which is subject to its own separate liquidation process and therefore will not be included in the Deloitte proceedings.

Hi ToT - thanks for posting the Facebook article, and I note the date is 16th November 2023. Also noted that there were some heavyweight US companies attending this event. I assume around that time, FRC team would have been aware (or anticipating) that the winding up petition was on it way from Mourant to the Grand Court of Cayman, yet our man (SN) is at the forefront of arranging this high profile meeting. It specifically says in the Facebook article ‘……….Among the distinguished guests were representatives from America Georgia Business Council , ExxonMobil, Freeport Energy, B1 Bank, Frontera Resources, and Pappas Bros. Restaurants. Special thanks to Honorary Consul of Georgia Janet Moore and President of Frontera Resources Steve Nicandros for organizing this great meeting.’

If SN was personally involved in setting this meeting up, how do you think Exxon got invited (or pushed them to attend as Exxon is a very busy company for this small meeting and a small…….country)?

Nevertheless, SN was being presented as the President of Frontera Resources, but following the granting of the winding up order, I wonder if he is still the President but may be of another FR entity registered outside of Cayman? My own understanding of insolvency law is that any entity (regardless of foreign registration) is if it is majority owned by the Parent company (FRC in liquidation), then it should fall under Deloitte’s purview.

Anyway, what are your thoughts as to why SN+team decided to let the winding up order go through uncontested but is now working closely with Deloitte to return the company to the pre-wind up status? Having thought about it, I now have no doubt that SN has been personally lending the company money to fight all the legal cases and therefore racked up significant debt, becoming the largest creditor in FRC.

If this scenario is true, it will entitle him to be in the middle of all creditor discussions/negotiations as well as vote through any proposal agreed with Deloitte. That is indeed deep and advance thinking by SN and team. May be the jigsaw pieces are starting to come together but we will have to wait to see the full picture and where the loyal army of retail investors stand in terms of ownership/dilution.

Disclaimer: Monti is an ‘out of the box’ thinker and the above is my assessment only.

P.s. great to have the legend back with important research contributions, and may be also a good omen for us imho (@tot). Also the resurfacing of the ill-type on this BB may be another good sign.

No one is on your ‘effing back’ as you put it, but when you choose to plaster your email communications on a public BB with the Liquidator, then you must be ready to expect some feedback/response (whether it’s good or bad). Regardless, I did say in my last post that your intentions were genuine if foolhardy imo. I also said that hopefully, your actions will not cause any blockage in future company communications but only time will tell. Remember, Looed is only the messenger so probably is unaware of what future may bring from this. Having said that, I also remarked in my last post that I hope there will be no disruptions in comms so let’s wait and see.

On Willy sizes, I don’t believe Ive made any reference to your investment size (besides its relative to each person’s circumstances). But when you have one individual who has been banging the drum to get as many shareholders as possible to communicate with the Liquidator, then I wonder about their motives and it could be: 1) they are not genuine shareholders or 2) small disgruntled shareholders with small financial risk.

You want me to vent my angst towards the Directors but after 5 long years of copious legal cases, twists and turns, I have moved on to the next emotional stage of investing and that is hoping for the best.

I feel it is necessary to clarify my earlier post where I said that any comments/statements being made by ‘former Directors of FRC’ can be constructed as interfering and illegal as the company is in official administration. In fact, if people opened their eyes and minds, they will realize that Deloitte said the same thing and I quote ………’ the directors have no authority or power to act in relation to the Company, and therefore any statements, other than what is found at that link, are not made on behalf of the Company.’ By posting here purported comments from ‘former directors’, then we are not doing any favors on ourselves or the FRC team, particularly during an important negotiation and investigative period. Further, I have never refrained (or encouraged for that matter) any one from contacting the Liquidator, that is their prerogative but consider the knock-on effect. Now, following yesterdays revelation from ODR1, I feel maybe communication could be shut down but hopefully not. I also recall a similar episode when shareholders were aloud to listen in to the Texas Injunction hearings, but one particular shareholder ruined it for all of us by making rude interruption. What was his name? Gilly something. I have not doubt that the intentions of ODR1 were genuine but I really can’t decipher what he was trying to achieve by asking Deloitte to verify Looed’s company statement. All it probably did was alert Deloitte to ask the FRC team what the hell they are doing by making unofficial company statements via an anonymous bulletin board poster. Not sure how they could explain this away.

As far as people’s perspectives are concerned, someone with a few hundred investment will have a different approach to someone with tens of thousands of investment. Tenners is probably a small time investor and therefore he feels he can take a moral high ground by rocking the apple cart. Unfortunately for majority of us, we have little choice but to continue to support our company to the end I thought BugsyB’s post today succinctly captured many of our sentiments for SN and FRC.

ODR1 - with respect but sending out that email to Deloitte was silly and can be constructed as illegal and interfering from the FRR Team. I am not sure what you were trying to establish…..

Haha, very apt Coggy. But at the same a little depressing. So much time has passed and so much hope invested in FRR and SN. I also feel compelled to say, thank you for your service.

Seems like we are the beaten generation (from the music band ‘the the’) or ‘why does it always rain on me’ from Travis.

Thanks for the correction Coggy. This trip was back in 2016, at the invitation of Zaza? In his presence, did you ever feel at any time that Zaza was a silent, two-faced, back-stabbing CEO? I must admit, watching him give media interviews and as well ans the investor presentations, he seemed quite shareholder-centric.

I believe ToT was there too but perhaps he did a separate solo trip because his notes and site pictures were posted on the iii bb.

Great to see a special appearance from the iii-legend, Mr ToT himself. I recall you being one of the original band of brothers that made the trip to Georgia to visit some of FRR’s oil fields and reporting back with some cracking, independent info for the benefit of the ‘armchair investors’. You, together with Devex, Coggy and Fred, we appreciated your efforts. And I can’t recall for sure but I think you gents funded this trip yourselves. After all these efforts as well as making enormous efforts to connect and support the Managemnt Team, we find ourselves in this sad predicament. Also, during my quiet times, I start to wonder how Zaza managed to hoodwink so many bright and ‘street-wise’ people. I will also include Mole in this select group of highly intuitive and instinctive people. Having said that, this is not a dig at these people especially when you compare and consider that a highly authoritative figure like SN also failed to figure him out. I will again reiterate that ZM has a mental disease and is a pathological liar.

Going forward, I hope, periodically Mr Piscator can continue his ‘drop bye’ here to give his thoughts as I think we have a few interesting weeks/months coming ahead via Deloitte updates.

Looed - many thanks for replying, duly noted. I also wonder whether you have ever directly spoken to SN in your dealings with the company over the past few years, but if a delicate question to answer, plz ignore.

Tabs, Outrider’s debt was issued by Frontera International Corporation (FIC), guaranteed by Frontera Resources Caucasus Company (FRCC) and under FRCC, we had the main sub, Frontera Eastern Georgia Company (FEGL), where the Georgia PSA sat. All these companies were liquidated by JOLs (Mssrs Griffin) on the order of Outrider for defaulting on the CLNs. This liquidation process started in early 2020 (if my memory serves me correctly) and is still ‘in process’. Perhaps someone can remind us on where we are with this (via NYC?).

As far as SN’s daughter is concerned, I am sure daddy and particularly her grandpa already took good care of her.

Thanks Looed, yup makes sense. At least in the short term (although not ideal), the liquidation process does stop all the court cases brought on by the likes of YA, Mourant and YJ. Moreover, it also introduces an independent intermediate (Deloitte) who can try to facilitate a resolution among the creditor group, especially after they have declared that FRC has no liquid assets. But at the same time, it does makes you wonder, if FRR is an empty shell with more liabilities than assets, why would these creditors would incessantly continue to pursue legal cases and thereby rack up more of their own expenses?

How do you feel about the whole Deloitte news from yesterday: Positive, Negative or not enough to say either way. Thanks as usual for the timely updates, much, much appreciated by all those that are connected to this company.

Hi Looed - thanks for the clarification as many thought you received both comms from the company at the same time.

Yesterday, there was quite a varied numbers of opinions here. Me? I was leaning more on the positive side but I guess, you could just as well as argue on the negatives. But I was wondering what was your thoughts on this unfolding position. Do you think this is heading in the direction FRC team was forecast when they let the winding up order through uncontested? I personally think so.

The other thing that came to mind was concerning Deloittes comments that they had uncovered significant liabilities from various creditors. That got me thinking on how the last 5-yrs of litigation had been financed (Caymans, California, Texas, UK etc). Could the discovery of large liabilities refer to these legal bills and if so, who extended the money? I assume SN via Directors Loans or FRC’s legal firm. And I do wonder how much skin Steve has in FRR despite its bleak future (on the face of it). Also worth considering if SN has put in his personal cash, how much this will cost us in future shareholder dilution?

The other question that springs to mind is why try to bring back FRC to the pre-winding up position when it would be easier to let Deloitte clean up the financial mess and move on? Here, two reasons come to mind: 1) PSAs are still under FRUS and 2) the value of accumulated losses in FRC (c$500m+) which could be used to offset future tax liability, particularly handy if there is a buy-out.

As usual, just my thoughts but would welcome yours too, so thanks in advance.