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Starts off about Outrider's business goings on in Kazakhstan and goes on about that for a bit. Seems Outrider are causing a pain in the arse for other companies. Later on it talks about Frontera, some interesting back story, a lot of what we already know. It states several things about Frontera but I don't get the impression any of it is from fact but more conjecture. Don't think overall it tells us anything new and not sure the writer is up to date on the exact specifics with FRR.
I doubt a debt for equity swap would suit FRR to pay off Outrider unless it had no choice or was based on a new valuation of the company with all the now proved up oil & gas reserves taken into account. Other than that as it's a loan if FRR an get finance elsewhere it would be better just to pay the Outrider loan off. Guess we'll have to just see what comes forth. Zaza back last year said about returning Outriders investment to them, that could mean anything but likely means paying off their loan. My thoughts are as a major shareholder Zaza still has a say in what is going on here. Perhaps we'll find out later this month or early next month.
I'm doubting now whether there will be a new entity as such or if the existing entity will be the new entity in terms of people coming and going. Doesn't seem much point to be there being a new group of companies formed when there are already ones existing. Main thing I guess is to get the right expertise on board and get the finances sorted out. Possibly it might be put into a new form that we will have to vote on, remains to be seen I guess.
I don't think there will be any other choice other than to vote for it, if it results in needing a vote. The communication received by some suggested that something will be happening where we will at least get to hear for once it sounds. I don't think it will result in a lot worse position for shareholders, Zaza & SN as shareholders will have their shares diluted down also so they will be as mindful of doing the right deal. I still personally think any dilution down will be offset by investment into the company (possible stock consolidation also) so the new company will be a different beast to the old one as far as finances are concerned.
The way I see it before the shares were worth very little as the company had no money and was it debt. If the restructuring brings in new finance as is expected in a restructure then it would be a company presumably without debt and some decent money. In that case the company would be worth more than before. The situation with the oil & gas only raised the share price a bit at the end as it was probably obvious that FRR lacked the finance to make much headway with a big money input.
I think at its most basic FRR will just get onboard a commercial investor on commercial terms to replace Outrider debt. Then they could strike a Baker Hughes type of deal to cut a company in for the profit of developing the oil field. My guess is that is one way any dilution of shares could be avoided but cutting another company in for a share of the profits would likely diminish the potential value of the company of course. Other thought is that again finance may be replaced as a tidying up exercise for a SM to take over but I think in order to get decent value from a buyout it's likely better to have a full on operation in progress rather than a company restricted by having little finance.
Indeed, I think the company would have to be in a lot better shape for the GG to give it a longer licence and hence the restructuring. In all fairness there wouldn't be a lot of point giving a longer license to a company that was so indebted that it had no real chance of doing much with it. My guess is that a longer license will be granted set against the amount of investment a company can show it will put in. Really have to wait and see now as to what this restructuring consists off on the financial front.
Good news on this Dustin guy returning and FRR restructuring so it seems :)
I not so sure of a massive dilution this time as JS discussed. For one I don't think Zaza would be happy to walk away with 10 percent of previous share price worth. I also think it is more tricky to calculate now. Now we have proven up reserves that are massive. My view is the previous share price before delisting took account off that but also took account of the precarious nature of the company, loan debt, lacking in capital to invest in the oil & gas field, arbitration, etc. So the fact that the share price didn't exactly go through the roof suggests to me that the market had already factored in that a lot more money would be needed to be brought on board for FRR to tap into the oil & gas proper. That or someone would have to come in and develop the oil & gas in a big way and they would take a share, such as the Baker Hughes agreement but full on. The other scenario could have been that a SM would buy in or buy out FRR and shareholders would get a payday based in the value of the field minus the clapped out state that FRR were in. Apparently it's been said that Zaza was more in favour of pushing ahead with field development itself as the best way for investors to gain value out off the field.
I would have thought then as such the value of the company at delisting already had taken into account the need to gain further finance, relinquish a cut in the profit from the wells, etc in order to properly tap into the wells. That the company was lacking in funds too much to develop the field to the size needed without it taking forever and investors losing out instead by the field not being utilised in anywhere near as quick a way to tap into the full potential of the field and the massive reserves there within.
So my thought is whatever happens the share value this time will be offset against the value of the massive oil & gas finds and the ability to tap into that with new investment. That is something that was not present back before. I personally think that the best way if possible would be to gain a new investor in the form of an established lender to pay off Hope, YA, etc and then developed the oil & gas field. It was the case that Green Finance was apparently bring lined up for such a situation but Hope/Outrider etc made it too difficult at that time. Odds are I reckon that they may do the same approach again but have a clearer way ahead to do it this time. Hence while I could be wrong I don't think there will be a big dilution of the value of the shares this time.
I noticed talk of this Dustin guy a couple of years or so ago. He apparently really knows his stuff and if he knows that there is real big value there and is confident enough to be brought on as Director then that is supposedly good stuff. Him being there will be a very good signal to investors of the potential in FRR and will give them the confidence to invest. As it now looks that we are at the
That's a possibility PJOHN, a more positive one that I hope you're correct about. It could be a case that the more finer details are being worked out so the court cases are being put back as a safeguard. The mediation period now officially goes on into February so that would make sense.
I've always seen the court action as a lot of postering by, a last resort perhaps, but ultimately about Zaza & co. Holding off Hope & Outrider while matters get dealt with so he doesn't move in and take the lot.
With both sides agreeing to it I thought earlier on here that it means neither side are all that confident off a win. I think though while that may be true your thought is probably more paramount that it's been put back while the last ends of restructuring are tied up, hopefully. Zaza has always given me the impression he is an able businessman but it's been frustrating to hear of little else but delays and more waiting on this share pretty much all the time, that is when we get news. Hopefully something will come forth on restructuring in the next few days/weeks and we can finally move on hopefully on a positive note for shareholders.
The way I see it if both are asking for it to be put off then neither are that sure of winning in court. My guess is that Hope is/has been very disagreeable in the hope of gaining more than his fair share/what he is due. All the while nothing is happening on the ground and good licence years are rolling by without much being pumped.
I see from the new court timings mediation runs into February, officially. I personally think that if an agreement is not close FRR would be better off trying to find a large investor or a SM to bring on board and just pay Hope off plus develop the field with them. There must be interest out there considering the field is apparently worth billions, 15 billion was it? Seems silly to carry on in a circus act and while away the time thereby passing over on success.
The message from the company before Christmas was that restructuring change was occurring. I'm hoping that there is some good concrete stuff happening and not a lot of waiting around on Hope & Outrider. Really I think in the next few weeks, by end of February court mediation date they should be try and get it all sorted out as clearly no one is benefitting from the current mess it is all in.
Indeed, good to end on a Christmas Eve with a potentially more positive note to what looked otherwise. Hopefully a Happy Christmas and New Year to us all! :)
Why would they bs over the email address???
That's very positive indeed Aurora if it's from Frontera and they say they are undergoing a period off 'constructive change' and will be communicating with you about the company's progress. If that is around today's date or at least this month after the 3rd Dec then I doubt they would be saying that if it's all going south. Not unless they are not being sincere but I doubt that they would do that.
One question in all of this is why didn't Hope move in sooner after the Arb was won? Kind of makes me think that there is more going on here than a purely game over situation for me.
Sorry Starage, missed that, thank you Ziggy in that case :)
Yes a good summary Mole, thanks to Starage also for digging up the info. At least now we have a better idea of what is going on. Are we sure this is Hope/Outrider trying to pick off the assets without Frontera losing the licence and not it happening as part of a restructure? I think Zaza said that the Caymen companies would be liquidated as part of the restructuring process though some wondered if that was just down to translation or possibly not quite correct term used. I think at the time there was speculation if parts of the group would be set up/registered elsewhere for this restructuring, i.e US, UK, Georgia, etc. So it's looking like it's either we get liquidated and sold off or the assets are moved elsewhere under restructuring and all is ok. Zaza has apparently been away restructuring since September? October? So probably a good 2 months at it at least so that's a fair while to move the stuff. Zaza has come across as a capable guy to me in the past so my guess is that he may be a step or two ahead of Hope in all of this. Hopefully we'll see the state of play soon one way or the other on all of this.
Yeah, I can't see him investing in that money if he thought FRR was not a runner. The timing of it is important too as you show Plaster, not years but 6 months before delisting and then roughly 1, year previous 1 million invested. My guess is if FRR tanks it he is going to be financially ruined, at least a lot less wealth to what he was. He must of thought Frontera was going to come good at that point even with the underlying situation of Hope/Outrider, YA and the Arbitration starting to simmer away. Plus after years of obstruction from the GG, Zaza still invested in. So I assume despite all the goings on he must be confident of a good outcome to it all and is determined to get there.
Indeed Plaster, I can't see him just walking away with the shareholding he has not unless things have not turned out well on the ground. We have no news that it is any different from previous on that one.
I personally don't think Zaza would have bothered getting the accounts in the Caymans sorted when the Frontera companies were due to be struck off there if FRR didn't have any go left in it.
What we need now is further information on what may be going down here. Ideally for Zaza to make a comment on it to the news media since he doesn't seem to like talking to us lol.
Kind of just had a thought, what if Hope has to do this as routine so that he can follow a claim up elsewhere, if it's down to Restructuring. Zaza said the companies in the Caymans would be liquidated as the company is restructured. We kind of thought at the time it meant that they would be allowed to elapse but of course that might have been too convenient timing. That it didn't align with when Zaza needed them to be liquidated. Just a possible thought.
Thanks Looed, to Earsburn also. That makes sense as would seem silly to employ expensive lawyers in California yet no even have representation here. Assuming of course that it's not as Starage says and they are hoping to claim off Hope while the company/oil & gas operation is a goose.
If there has been other examples of it then yes hopefully it is the case here that for some reason it doesn't matter. Still it's kind of concerning if not knowing what is the bottom line of it all. Usually this board seems more busy when something comes up like this so I wonder if done already know more about this.
Just have to sit another one out on this and see where it ends up I guess, disaster or another bump in the road.
Your thoughts are most welcome though as it all helps to try and understand it better :)
Thanks Looked, that sounds depressingly close if he just has to sign it? Any reason why he might not sign it straight off the bat? Is it like the other court cases where they get set back etc?
Can only hope that FRC has more going in it and can keep going longer than FIC.
Not sure why Frontera is not resisting this move/has no representation. They've done so with everything else.
Can't think why Zaza can't come up with something from somewhere. If this oil & gas field is all that I'm sure a SM would be interested, be it at a knock down price, something being better than nothing.
Or maybe it's not as big a deal as it first looks. Not a lot making sense at the moment at least.
I agree that it's very doubtful that FRR have the money, if they couldn't pay the workers etc and Zaza was talking of restructuring and issues from the GG stifling their activities then they are looking like they have little. They may have something like a couple of million in the bank at a guess that they hold back to ensure the company stays liquid. All in all I doubt whatever they have in the bank would justify Hope bothering. His investments in Outrider look to be taking a hammering of millions with complete losses in some no doubt likely, a couple of million from FRR won't likely last long at best just forestall the likely enviable for Hope for a couple of months or so I would guess.
To my mind there is likely a bigger game at play here if turning over FRR is only going to reveal pennies to what he needs. Zaza & co brought legal action against Hope for liable over his comments about Frontera a couple of months back. Possibly it could be a move to get them to back down on that. That or force his hand for a payout of the $40 or some offer whether Zaza gets it from another investor or whatever. I can still only think that the data can 'potentially' be worth anything and that is if that gets sold off as a result of this action.
Yes ideas from others would be handy here also.
My only other thought is that it may a case of Hope trying to force Zaza's hand to pay up not only because of his own situation with Outrider but because it could be a way of getting a payout before all the court cases come around next year. He may reckon if he can get what he is after then all the court rubbish goes away. Many of us on here always believed these cases just to be a delaying tactic to avoid paying Hope till we get another investor sorted. So if he can jump all of that with this move then maybe that is why.
Anyone know much about the winding up court action here? i.e how long it takes? Whether it is likely to be granted? Etc.