Member Info for MontiBurns

Thanks for the post Jim; that is enough reassurance I need to remain patient and to let this play out to its conclusion.

Ok thanks Looed, duly noted from your yesterday’s message, copied here for ease of reference: “Will the company do the right thing by us? They seem to be trying their best. As rubbish as they are at comms, they have people in place who are very experienced in events such as those currently in play. But those events must play out to a plan we cannot see and risk remains until they succeed or fail. Frustrating? Sure. What can you do about it? Very little right now.”

Tenners, the erosion of trust started to disintegrate many moons ago. If I had to list the events that led us to this (lack of trust) point, I would say it started from 2012 when the Georgian Dream was elected, followed by the appointment of Hope (due to loan owned to OMF) to the FRR Board, followed by ZM becoming the CEO. In my last post, I squarely put the responsibility on SN shoulders, given he was the founder, then the CEO and then the Chairman of FRR. I see from your post you also blame SN for ‘…….silently thrown it to the wall’. I don’t know if that is true. I think they/SN came to the realization that there was no way for FRR to wrestle free all the legal cases, liquidation processes (namely of FIC) and a meaningful debt repayment. Then there are all unsavory characters that have undermined us over the years like YA (illegal forward selling) Hope (undue interference at the Board level) and ZM. I think I would also throw them overboard as payback. But you may ask yourself, what did the shareholders do apart support the company and management team. We will see what happen to us. But I think it is wishful thinking on your part if you think there was any value left in FRC and trying to peruse any recovery via Deloitte. The best you can achiev by reaching out to Deloittes is reach some kind of mental closure but in terms of any recovery, zero. Hence, let us stay connected to SN via Looed, even though it will feel like we are ‘in the hanging chamber with the noose around our neck and waiting for the trapdoor to open at any time’.

Tenners, I don’t mind hearing the opposing views and yours is well thought through and worthy of consideration. Have FRR shareholders been treated badly with no official comms for 5-yrs? Definitely yes. In the current situation (post FRC liquidation), are FRR shareholders exposed both legally and financially? Yes. However, you are now demanding answers, which to my mind, is a little late in the day. Had you taken this approach back in early 2019, it would have been timely and justified. Now (a bit like a python gripping its prey), the life has been squeezed out of us over the last 5yrs. The amount of time and money it would take to untangle this mess and try to get to the bottom of this would be a monumental exercise. What do I mean here? So, just to recap: rogue CEO who tried to fraud us and snatch the company from under our noses with a spurious $5m loan; a Board Director who was forcing us to default on his own debt so he could take over the company (fiduciary cases ensued); a malignant Georgian Govt working against us (including some high profile public spat), leading to an expensive tribunal. All this time, a company struggling to make ends meet as well unlocking the potential of B12.

This is just to put some perspective. And lastly (not least), you invested in a junior AIM O&G company.

Having said all this, we were lied to by the Company and ZM over many moons, plus there was operational and financial mismanagement, which SN has to assume 100% responsibility because he handpicked some of these guys, particularly ZM.

I also understand the need for answers in order to achieve some level of ‘closure’.

Looed - thanks for your response but given how close you are to the company, what I’d really like is your perspective on the current situation, the prospect of FRR returning to business and whether you think shareholders will be part of this resurrection? It may be an unfair question and one you may struggle to give an accurate answer but I am only looking at your current state of ‘feelings’. Thanks in advance..

Thanks Looed in advance. Also, having read your previous two posts, I now understand and appreciate your position. I think you have demonstrated over past few years that you are a straight shooter and while unintentional, you have somehow landed between a rock and a hard place (ie us and the comoany). It is a difficult place trying to balance both ends but we all thank you. For most for us who have been unable to connect to the company, it have been a time of feeling lost and sick. I also believe that you genuinely feel this and hence your desire to facilitate commas. us. Again thank you and I look forward to your response tomorrow because you are probably our best gauge of ‘whether we re going to be ok despite our shareholding in FRC reduced to nothing’.

Thanks Looed - appreciate your response. Please don’t take my questions/probing as negative as I am just trying to piece together the various pieces for myself. As far as liquidation/insolvency situations are concerned, once the Liquidator has been appointed by the Court (Deloittes in this case), all decision-making will done by them. They will also be very careful in terms of incurring additional expense if there is no money to cover their running costs (they are not a charity). The liquidator will update the court with its finding and the court will approve next course of action. In the first stage, Deloittes will try to establish/prove up the amounts owned to the creditors and list any assets. In the YA cases, the counterparty is specifically FRC meaning Deloittes will be responsible for that and therefore will make all the decisions. In terms of the PGs, perhaps call up can only occur once Deloittes informs the creditors that there is no assets to repay them, which means YA and Moutan’s will try to exercise their own security. But as you say, this will take time.

My own take from winding up FRC is probably a positive development to jettison all legal cases and debts but this exposes the loyal and long standing shareholders to the mercy of SN to do us right when FRR returns. Legally speaking, we have no recourse to the new outfit if a new company resurrects as we expect. Would love to hear your thoughts on our current predicament and whether you think SN will look after this small retail (but aging) investors?

Interesting development with YA, and thank you for sharing this us. Isn’t hindsight a wonderful thing? What do I mean by that? Clearly the tactic of kicking the can down the road (first via UK courts, and then dragging this through the US) was clearly to coincide with the wind up of FRC. So, what happens now with regard to YA debt/case? It is true that this will now be decided by Deloittes. And what will Deloittes do? Nothing imho. They don’t have the money to appeal, and besides this debt was never contested, so will accept the default judgment and record YA as one of the creditors that is owed money. There is no assets and no money in FRC so why appeal? As the American’s say ‘good luck ya’ all. However is there any recourse to the Directors for negligence or via issuance of Personal G’tees? I think there is with YA and Mourant, so it will be interesting to see what happens next with these PGs. We also recall that SN made a bi-lateral deal with Mourant to repay his share of the money owed. Again let us see what happens here.

Final pint on FRUS. If this entity was not extracted from the FRC group, then there is a possibility that the Georgian PSA, which expired, could have been renewed under a new separate FRR name. For me, it is somewhat strange that we have not heard any more on the renewal of the Georgian PSA or the tendering out of B12.

Goit, agree with your post but more importantly, people should realize that it will take months and reliance on FRC staff for the liquidator to collate information and establish a creditor list and amounts owed before they can even come to any conclusions, especially on what went wrong and who (if any one) is to blame. There is also a cost element and if there is no money/assets in the kitty, it will be a quick and simple closure; the best the liquidators can do right now is tell you where they are in terms of liquidation process (if you are lucky). Furthermore, liquidators first priority is always toon creditors (situations like this, shareholders are treated like 2nd class citizens).Hence why I feel following up with them will bear little fruit. Instead, we should focus on SN via Looed/Jim for a litte clarity. Remember, last two messages from the company specifically mentioned ‘shareholders’ but I want to play ‘devils advocate’, then relying on these guys words (historically) has been less than reliable. .

Anyway, we deserve an update from our team in terms of where we are and where we are heading even if this is through the current informal channel.

Call it blind faith, but I am standing firmly behind SN and Looed. I think there have been significant events over the past 5-yrs that could have allowed SN to walk away from FRR resulting in the shareholders being left in the dumpster. Instead (although not ideal) we have been getting some reassuring messages, particularly recently, post FRC wind up. Yes, this passive approach may be a life long regret but ‘running off’ to Deloitte is hardly going to achieve any thing positive. The easiest (and probably the heart warm) action would be to get a message from the company on next milestones and/or timings of when we can expect our replacement shares in the new FRR setup.

Thank you Looed. But in terms of the latest company message, was this initiated by you or did you receive this unexpectedly? If unexpectedly, it means that the Company is monitoring this BB and therefore trying to respond to us in the best way they can (given the continued constraints on legal cases). I will re-iterate that I do trust SN and Team. Further, if you really evaluate our situation pre+post FRC winding up, it remains largely the same given FRC was facing a number of legal cases from creditors. And honestly, I don’t think there was any value left in FRC, especially if the Georgian and Moldovan PSAs were re-assigned to another entity. I also think the uncontested winding up order was envisaged by the FRR-team, in part to cleanse the company from its recent Chequered history.

Now, our frustrations are borne out by two things: 1) 5 years of no direct coms from the company but now made worse with the news that FRC is being liquidated, and 2) how long are we expected to wait for the news on the new company/shares?

I would also humbly request that people here should keep their emotions in check and trust in the process. All this nonsense of contacting the liquidator for info would be futile imho).

Finally thanks again to Looed and SN for continuing to look out or us as some of us have Invested 15yrs plus with FRR/SN and it’s been a really life changing experience. He will do right by us.

Delighted to see mother message from the company (via Looed), so gratitude and appreciation is duly paid to SN and team. However, I don’t particularly understand what they mean by ‘…indeed continuing to advance the current situation’. Well, what is the current situation and in waht respect? Corporate reorganization? Resolving o/s legal cases? debt obligations? PSA renewal? Etc, etc, etc.

But they do have a plan, and while painfully slow, thy are dealing with them methodically.

Having said all that, they must also be abundantly aware, that the mental stress of the unknowing (of the current situation) is slowly suffocating us, especially now that the company we collectively owned has been wound up.

My question to Looed is that the last message received, was this instigated by you or came out of the blue as you connected this to the (coincidence) publication of the liquidation in the Cayman Gazette?

Finally to end this post on a positive note, great to read the company reiterate that it is dealing with the situation (mess?) in a constructive way ‘in the interest of all shareholders’.

armoured-bear - well there is generally some hesitancy when dealing or investing in a cayman registered company. i recall vividly back in the day when sn worked his socks off trying to convince shareholders to approve the corporate reorganization to cayman as the articles of association required a hefty 75% yes vote; we backed and trusted him. also, there are many companies registered there for tax purposes but generally, it is perceived to be less onerous on corporate governance, compared to other established markets like uk and us. sn gave strong justifications for moving to cayman but i also recall him saying if the proposal was not approved, frr may not struggle to survive.

anyway, i found the following excerpt from may 2017 rns, which i founding enlightening (https://*********************/newsfeed/article/notice-of-agm-corporate-update-682589)

clearly a lot of investment gone in to frr plus huge oil and gas discoveries made along the way, so where did it all go wrong?

elimination of debt

in support of the aforementioned work, the company's primary objective is to improve its balance sheet in order to enhance shareholder value and make its balance sheet attractive for raising new capital to fund operations. to this end, the company will restructure and eliminate debt and associated interest expense from its balance sheet. namely, the company will do the following:

(i) loans provided by management totaling approximately us$26 million will be eliminated by way of conversion into equity;

(ii) loans provided by ya ii pn, ltd. under previously announced seda-backed loan agreement totaling approximately us$6.2 million will be eliminated by way of conversion into equity; and,

(iii) large portion of existing vendor debt totaling approximately us$8 million will be eliminated by way of conversion into equity.

as a result of the above debt elimination, the company's balance sheet will improve significantly as the overall debt will reduce by approximately us$40 million. as a consequence, the company will be able to raise capital much more effectively than it is able to do so now.

Looed, Thanks for the additional information concerning Cayman Island companies and liquidation process. So, it would nice to know if FRUS was detached from the FRC Group (pre-Wind Up Order) and if so, who are the shareholders of FRUS. I assume if this separation happened, it would have occurred at the same time when the Georgian PSA was assigned to FRUS. Nevertheless, as it stands, we (the shareholders in FRC) are basically stranded in no man’s land with no value or apparent recourse. While we are obliged to trust in SN, hopefully, things will be straightened out in due course for us. But that is one of hell of a ‘leap of faith’ given the lack of direct comms from FRR/SN over the past 5 yrs.

With regard to my last post regarding accumulated tax losses, I do wonder which entity these losses were registered under (FRR PLC?) and whether the new SN managed to retain this entity too.

Finally, agreed that there are many other FRR entities with similar/same name but registered in other jurisdictions/countries and if any of these entities are controlled by SN.

Let us hope we can get some clarity soon….(thanks for continuing to be the connector between us for now).

i believe ****nal221’s share price of 2.5p was based on the historical investment frr made in georgia from 1997-onwards. my own thoughts? i think if the psa is renewed (which is the main driving factor), and the cost recovery pool is retained (at c.$320m), then this has a carrying value to any future farmout partner, particularly if that partner is a multinational-major from the us. there is also all the drilling data accumulated covering different oil fields. but again, no way to work out a potential s/p until we know what fields the psa will capture (ie in terms of value from p2 and p3 cpr reserves).

personally i think there is a farm out deal waiting to be closed but that is dependent on the renewal of the psa. what’s the evidence for this? i guess the continuous legal fights with multiple stakeholders over many years (especially in the absence of renewed psa), tells you that they are fighting for a reason, so what could that be unless they have something in their back pocket (re-emergence of dustin aro with frr may be the independent consultant that is the go between the two parties?).

finally, in terms of future value of a deal to company and shareholders: as ****nal221 alluded, frr had accumulated over $500m in p&l losses which are future tax deductibles, meaning no tax (or very small amount) to be paid to the us govt until these losses are clawed back. important to note here the difference between the cost recovery pool and the p&l accumulated losses reserve. for the cost recovery pool, and as i understood it, nothing was payable to the georgian govt from sale of oil until this cost recovery pool was fully recovered. however i don’t know if this is actually the truth. why? well, the basis for dragging frr to the arbitration tribunal was because in all the years frr was selling georgian oil (i reckon over a period of 20-yrs, perhaps this amounted to over $100m), frr never gave a penny to the gg. and we know what happened at the tribunal. - we lost! perhaps someone with a longer memory will recall why the tribunal judges ruled against us despite this provision in the psa.

so, completely pointless discussing a potential value of each frr-share until we know where we stand legally (with all the ongoing cases) and the status of the psa. there is also the moldovan psa, but is this even valid? but the fact zm, hope, ya etc are all looking to take a piece of frr, there must be a good reason.

happy to hear other people’s ideas and thoughts on this.

Fair observation Tabs, but in SN’s defence, you could argue that the numerous and significant dark forces at work against the company, they had to take this ‘detached’ approach with us. Take (for example) the open hearing in the Texas Court Injunction case against ZM, our own shareholders’ bad behavior resulted in the hearing being taken off public line. Having said all that, there should be some direct official communication between the company and its owners; they cannot simply leave us hanging around indefinitely.

I hope I do no regret voting for the company to be registered in Cayman Island when SN was soliciting shareholder support for 75% yes vote back in 2016 (?). They even hired was external firm which was cold calling shareholders. Anyway, all water under bridge, but my point is that we have been very loyal to this company.

In summary, the shareholder were in a bad position when we delisted and become a private company, but now we are in a worse position with the company put in to liquidation.

My key question to the company (via Looed and JimSlade) is what key event are we now waiting on until we get some proper communication and why when (tentatively)?

For those that missed the company’s last message, worth re-pasting here, if for nothing else, reaffirmation and reconsideration: "Please rest assured that the company continues to work in the best interests of all its shareholders. Whilst we are unable to comment on current events, we will provide an update to our Frontera family soon."

It is also true that greed can corrupt all, take ZM and Hope as recent relevant examples. And as it stands, we (the shareholders) are completely naked following the winding up of FRC, but that includes SN himself who was the largest shareholder. (@ 11%). The only way that he could have protected his own investment is if he moved the Moldovan and Georgian PSAs to a subsidiary where he is the major/sole shareholder.

I personally don’t think he is that ‘cold hearted’ noting his age and his own reputation (whether that is in the political circles [links to the Republican Party, Atlantic Council] or his father’ name and legacy). I am also sure that he is already pretty well-off and if his grand plan comes off, (in terms of a mega commercial deal) there will be plenty to go round for all.

So a bit of patience required but we will only get a piece of mind, when they tell us about the new company and new shareholder structure. Until then, we will continue to fret. I hope they can tell us something sooner rather than later.

Reassuring and succinct words from the company and provides some solace during this critically nervous period as we await news of our shareholding. But in another way, the collapse of FRC should technically result in a catalyst of a cleanup and help expedite the rising of a phoenix from the fire (I don’t like using grand words but it may be it is apt in the current situation).

Also the collapse of FRC will make it even more difficult for the Receivers to recover any thing given the inter-company, inter-govt and inter-institutional issues, complicated by a time lag (5-yrs since we delisted). Moving to Hope/OMF, so now no coincidence that OMF decided to voluntarily dissolve their Cayman registered funds at the same time as FRC winding up hearing; they must have been advised that SN was not going to let this

Yesterday Looed alluded to other legal cases being worked on by SN Team, but specifically a new trial concerning ZM (what’s that about? US orGeorgia?).

As far as other questions, would be nice to find out if FRUS was re-constituted out of the FRC group and what is the shareholding status here. I reckon it would have been strange that they did all the hard work by convincing the Georgian Govt to reassign the PSA only still to be outside their control.

Finally, with the collapse of FRC, what is status regarding other legal cases concerning YA and Mourant? Perhaps (with some hindsight), we can now see why the can was always being kicked down the road until the winding up date/decision.

Tabs - that is a strong indictment against SN which I will attempt to rebuff (as I have some time on my hands and only for discussion purposes). First and foremost, SN has had ample opportunity to walk away from FRR and dump his shareholders in a ‘perpetual state of desperation’ until our dying days. However, while he has not directly/officially communicated with us, he has persisted in trying to untangle a political, legal and financial mess. How much of our failings was down to Zaza and how much to SN, is up for a long debate. But if I had to portion the blame, I would break it down as following: 20% for SN (big mistakes on the operational side in the early days and over-trusting some of his inner guys) 50% for ZM and 30% to Hope/OMF. Let’s also not discount the significant political head-winds FRR faced from 2012 when the Georgian Dream Party came to power. So, after all this time and events, I am a proponent of ‘actions speak louder than words’. And here, I think you can give a lot of credit to SN for continuing to finance the legal costs and trying to retrieve this train wreck of an investment.

All the b/s around the arbitration was being spewed by ZM and what a crook he turned out to be.

Redemption in life is ‘just around the corner’ and SN will be given his opportunity, so let us wait until we pass this final judgement. He will go along way to complete redemption when he issues our Shares in the new entity. As a Christian, SN must know the difference between a heaven and hell.

Thank you Looed, that was quite a reassuring message (posted 6:05am). I am pleased to hear that you continue to communicate with the Company and I guess the flicker of hope right now is that at least we have you as the ‘comm-conduit.’.

Note for SN and team, please do not underestimate the stress that most of FRR shareholders are experiencing right now and for many of us, this was our backstop to retirement . So any snippets of info coming from FRR provides renewed life energy and mental relief.

With regard to FRC, thank you for obtaining the answer to my question Looed, which I see as a big positive. So they were aware of the upcoming hearing to liquidate FRC but decided to sit on their hands. Why is this positive? Well, firstly we can remove the accusations of gross negligence and secondly, it also means that any assets under FRC, was probably moved out and what remained was all the legal headaches and outstanding creditor payments. But, let’s speculate, what assets could have been under FRC as a dormant (obsolete) shell company? Probably unlisted shares in subsidiaries, the main ones (FIC & FRCC) are already under the control of the Receiver and being wound down.

The main question now remains whether SN, and his father’s and family legacy remains intact by doing the honorable thing and taking care of his loyal, longstanding shareholders by getting new shares in FRUS (or which ever new company they set up).

Thank you and God Bless.

Looed, thank you for a detailed message and for your persistence in trying to get something out of the company regarding shareholders’ rights. It seems (for whatever reason), they are not prepared to say anything while they work through the remaining legal issues. In addition, the need to stay behind the veil of secrecy is essentially (we are continuously told) to protect the company from ZM’s naughtiness. However, I have a couple questions: 1) Did the company try to ward off the liquidation request from Mourant or was this ‘readily’ accepted and allowed to sink? 2) PSAs were successfully transferred to FRUS?

On the Mourant’s and YA debts, these are secured by PGs so even allowing for FRC in liquidation, the creditors can still pursue their claims under the guarantees.