Member Info for Phil_2018

Gipps I think you are right in the article being cobbled together. The writer looks like they have assembled what is believed to be known about FRR but the points noted are all in a jumble. This doesn't necessarily make them wrong, we know some are true, but it could be more down to the writer not having a good grasp of the situation. It looks like the writer doesn't know how the in's & outs of how the situation developed nor has bothered to find out they probably couldn't be bothered nor felt it worth the time but thought they could get away with just putting down the 'factual points' as they appeared to be. I don't think the stuff about an agreement with GG and the 70M is necessarily wrong it's just how it's been reported. It's likely potentially just the bare bones with the detail that will potentially give a better idea of what is happening.

Mp I'm not so sure that gas & oil in Georgia is really much of an issue for Russia. Nordstream 2 goes across the Baltic sea to Germany to supply Europe. It already has Nordstream 1 on the same route operational since 2011, a route through Belarus and routes through Ukraine who may lose out to Nordstream 2 though that pipeline goes more to Southern Europe. Sanctions may slow down or possibly halt Nord Stream 2 but Russia will still have plenty of ways to get it's gas in. Georgia is not neighbouring Europe so it's going to be more difficult for them to export. It's likely more to be a local supply when it gets tapped. I don't think they likely would have got it tapped yet, that would cost a lot of money at best a few more wells may have been drilled. Thing is I doubt much had happened on the ground as FRR probably wouldn't have wanted to spend the money developing the area till it was sound on what it owned and had rights to both in regards to Hope & the GG. If anything FRR moving slowly is probably enough for Russia not to be too bothered by the whole situation there. That and I don't think they have much of an angle to sway anything there.

I don't see any reasons for these articles to dream up the info, nor anyone who would benefit from fake news, it's a delisted share. In fact if it were fake news it would no doubt be more damning or maybe just a specific point but there is no real upshot for anyone doing so, I can't see it would change anything. I think it may be just as foolish to keep believing the same news coming out as fake when it is likely to be the reality. The new stuff we have from the articles is probably not the whole story but probably a fair way towards it.

In general there is no reason for this news to be made up there's loads of other topics to write stories on about stuff more in the public eye than FRR. It looks like we are going to have to wait till about March to get the official position, possibly, but all this info is helping us get a better idea of how things are going roughly till then. Better to hear this stuff I'm feeling than nothing at all I think.

I can see the reason for the info blackout with all that has been going on. It looks like FRR has been in a pretty delicate state. It's on a wing and a prayer that we've gone 11 months or so getting revenue in from oil while not paying the workers subcontract company, apparently. They could have stopped working after 3 or 4 months without pay and we would have really been cut short then. My main concern at the moment is what FRR are doing to keep the oil & hence revenue flowing. It sounds like the subcontract company and their employees have thrown in the towel. Its also sounding like Arbitration probably won't be concluded possibly till March after the costs and summary submissions in the 14th Feb. So to my mind Zaza & SN most likely need to do something in the interim to keep the money flowing in and the company afloat whether it's money they loan the company or another pay day loan as unwanted as that may be till the apparent 70M comes in.

Who?

Sounds like it's near enough agreed on those points then Sonny. If that was back in November then chances are it's all been ironed out by now. I reckon that was probably the case at the December hearing and FRR were cheesed off that the Arbitrators wanted to be old fuddy duddies and do all the formalities which would entail more waiting & hold ups. What you say is still more to support that a deal has been done. With the amount of money that Zaza & SN have got tied up here I doubt I can see them wanting to risk what is likely most of their family wealth to an arbitrator. From the Hope case and in general they are probably no doubt aware of how even a good case can go badly against you on the whim of an arbitrator or judge so it's not worth staking all on red and risking it all.

For me it ties in with the legal entity of the company changing in November and the Arbitration hearing in mud November also. That was the one where stuff was supposed to happen and I think around that time a deal had been reached. I think the arbitration process continued after then much to FRR's frustration due to necessary formalities of the Arbitration, namely the arbitrators making sure they get there full fees and a final summary which could likely be a playback over what has already been agreed. Myself I really do think that the Arbitration has now essentially been done and we are just waiting for formal proceedure to be wrapped up in February.

I think there some members here that are still getting wound up over what is now old news, to essentially the GG taking back 99 percent of the block, etc. I think we are passed all of that and a deal has been done with matters moving on. That's at least what all these reports and legal/arbitration docs seem to be saying as far as I can see.

That's exactly what I was getting at OneDayRodney. The same could have happened to FRR if Zaza did not get a deal with GG, apparently going in with them. A lot of legal stuff comes down to what was agreed in writing, i.e the contract. If it states the GG essentially get it all in a certain situation then it looks very precarious, an arbitrator like a court judge could likely say that was what was legally agreed so is binding so FRR loses the lot and we are all screwed. That is not to say though that it would leave the GG with a situation that is all plain sailing. As has been mentioned in addition FRR has presumably the US government on its side and Georgia wanting the US & NATO on side because of the threat from Russia. Adding to that the GG would still need someone to develop the field.

To me it seems that FRR put their foot in it again with the transfer of the asset without the permission of the GG. This was probably unavoidable and probably the only course of action available to stop Hope from claiming the lot. However it brought up another area where FRR might be vulnerable to losing the lot in arbitration. Better to not gamble and get into a deal with the GG. We don't seem to yet know the ins & outs of that deal but whatever the case it's likely the best scenario for us. Doing the deal will essentially take away anything for the arbitrator to decide over which if our case is not good then that is likely a good thing.

It could well be that it work out well enough for both sides. The GG might have avoided any stuff like the 400 Million well sunk costs & FRR's 3.5bn claim but instead gives them 70 Million. For Frontera 70 Million could be crucial. It can get rid of Hope & his OMF Loan, cover other costs and most crucially develop the oil field from which it can get a lot more than the 70 Million.

I think it was back in Nov to a Ukrainian Newspaper that Zaza said that it was just the long term PSA to be agreed wasn't it? Again it's not necessarily a bad move going in with the GG as this could allow for better terms on that and avoid more legal entanglement that we could lose out on. Now with the GG in with us 50/50 in a company it's in their favour to give us a decent deal on that one.

In the court Docs in Dec it tells us that FRR were unhappy about the continuing Arbitration process. We might assume that this was because all was essentially agreed with the GG by then. I wouldn't mind betting that they were annoyed as getting it done and dusted then would mean the GG could forward the 70 Million from which Zaza could pay the workers as probably intended. By having to wait for the formalities to be concluded (and hence delaying the 70M) after Christmas Zaza probably knew that he was heading for trouble with the workers. With a bit of luck Zaza has something else sorted to bring us through to the 14th Feb without too much disruption. It looks like from reports that the GG are no longer interested in anything that may cause FRR issues

Maybe that's what the latest news article is trying to say. Maybe the change of level entity with the GG was what was put forward to resolve the situation. Hence maybe why the article refers back to the transfer of the asset without the GG permission and other stuff that questioned whether FRR had a legal right anymore to block 12. So maybe they had to agree to get into bed with the GG to get all that stuff dropped. So they may have had to accept a lesser resolution than what they might of wanted. Theoretically risking it all on leaving it the judgement of the arbitrator might be a very risky thing to do. The arbitrator might see it the GG way, state FRR loses the lot to a legal technicality and because it what was the legal agreement the whole lot goes back to the GG. Why risk that? Better to go for a lesser resolution than risk losing the lot and ending up with nothing. From the GG perspective they would have to do a deal with someone else to get the oil out anyway plus they are not assured a good resolution if left to final arbitration judgement either. Final arbitration judgement could be a bad one for either party and is only found out presumably right at the end in a final binding verdict. So could suit both parties to come to their own resolution jointly and not risk it all in a final arbitration verdict.

Could be Mp. I don't doubt the reports coming forward though. For me there is too much that cross verifies with the official court docs & other way official stuff like the change in legal entity of FRR to a joint company with the GG. That and the news articles are supposedly from different sources but mention pretty similar stuff. Add to that also what Zaza has apparently said to a Ukrainian newspaper and it sounds as though it's likely on target to me.

I reckon the odds are that the deal has all been done and it's just tying up loose ends now. Hence why some of this stuff may now be filtering through now to the press as after a while it all becomes common knowledge at least out that way to the locals, workers, associated companies, stuff heard & said. If a deal has been done there would probably be little point keeping it secret anyway. Might just be a few weeks until it is all official anyway.

Could it actually be 70 Million that the GG are paying? FRR could pay off the 20 Million OMF loan, pay the workers subcontract company the £1 Million, pay other stuff and pay to sink more wells. It might all depend on the deal at hand, whether the 400 Million sunk costs cone into it, whether the 50 percent buy in does something for the GG other than the 49/51 PSA.

To my mind FRR & the GG might have thought that the GG would have to deal with someone to get the Oil out anyway so it might as well be FRR rather than everyone getting wrapped up in more dispute. An oil major or whoever instead of FRR would likely want an even bigger share of the pie and being big multinationals they could have the clout to demand it or walk away leaving the GG without a partner. So end of the day perhaps Frontera realised that they just needed to come up with a good enough deal that it would make it pointless for the GG to go for anything else.

Following thought could be that arbitration is supposed to be almost a mediation type of process. It sounds like a lot of stuff has been discussed and agreement made before any arbitration verdict and hence nothing left to resolve apart from tie up the bureaucratic side. If Zaza said a little while back in the Ukrainian press that it is just the longer term PSA to agree that could likely well be done by now. Hence the arbitration formally tying things up in February 14th with the costs & final statements. Essentially so there is a final end to the arbitration probably as a formality to avoid any dispute reopening.

From the news we have from the workers that the GG is now in with Frontera and doesn't see it as anything that concerns them plus it looking like FRR legal entity has changed to a 50 percent buy in or whatever by the GG it looks like a resolution with the GG may be already done and dusted with formal arbitration tie up and funds to await.

The article seems to be suggesting/brings up that FRR doesn't necessarily have legitimate claim to block 12 either per agreement with the GG or because of illegal transfer. I can't see why any company would do the work essentially for nothing though if that is what is being claimed.

We also seemed to have possibly moved beyond that point with the GG coming in with Frontera with 50 percent of the company. Do we know that for sure? I know there was an update on the legal entity a few weeks back that seemed to tie in with this. Plus talk by Zaza in the Ukrainian press that the only thing left was the length of the PSA.

So could this amount to a buyin by the GG instead of a major with a significant amount of money soon to be exchanged, £70bn or whatever?

Could it be that this is now largely being decided outside the arbitration process by the GG and FRR? and that agreement is now largely complete?

So where are we at with all of this? Has a deal been reached with the GG? Is it just a case of tie up of loose ends? The court docs on here seem to suggest it is just a case of the arbitration deciding on costs/costs being submitted on the 14th Feb 2020. Any ideas?

I doubt GG trying to take back the clock would be that easy and would end up being disputed in another court case and scare off further investment. They are already in the arbitration process so might as well get it sorted what they want there. End of the day they would be sharing profit with some production company or another so might as well go with present arrangement. They probably know in any case the site is likely to soon be taken over/bought out by a major. So it could well be soon fully of drilling & wells.

To me the basics are that it is clear that FRR have been getting money in from oil so they would have had revenue coming in. Then it is only down to FRR what to do with that revenue. Presumably they paid YA as we have no news of a court case and one would have come through by now. They essentially had to do something with the money, I doubt they just left it sat in their accounts. All parties know there is oil there, gas too apparently and all seem interested keeping a foot in.

How planned out it might have all been I don't know. I doubt all of it is parted of it being part of a plan such is life. As far as the Nomad and delisting goes it appears that it has been helpful to the situation FRR were in as employees apparently according to the article already weren't being paid then, then the hope situation, etc. Could be the Nomad might have said they would need to issue an RNS at some point and FRR might have refused that leading to the delisting or just an acceptance of a desire to delist. Odds could be that some stuff might have gone down that FRR couldn't be as upfront about for the greater good of the situation of the company.

For me that the company has lasted the year and Zaza etc are still all pushing on show that there is something there worth fighting on for.

Why would the news be fake? I can't see anyone would gain particularly at this juncture. We've had other recent articles that have said much the same. They could have come out with this months ago for impact but now seems pointless. We're a delisted company, shorters have no affect, no share price either. FRR would of course been interested in am investor, the article didn't say they got one whether at £70million or some other figure just that is what they were talking off. FRR isn't known off by many people outside those involved. I think after several articles from several new outlets this news is likely straight up enough. It also stands to reason as we know lawyers fees have not been paid. I don't see this as bad news rather more that the worst could have passed (hopefully) with a good possibility of it all being sorted early in the new year.

Bluenotred, the payday may still come for us. As bad as this is towards the subcontract company employees it is probably seen as the only move FRR had left, to stiff a subcontract company and so from FRR's point of view the dispute is with them not with its employees. Probably why FRR wanted to keep everything secret and why I think the Nomad might have been pulled by mutual acceptance. FRR basically needed to keep word of its position getting out so the employees stayed put and the Oil was brought in to pay YA off instead. Hence they needed to sail close to the wind for most of 2019. I've heard life & business is pretty rough out that way so this type of carry on is probably unfortunately fairly common. Looks like FRR was looking to the final arbitration in November to settle the payment with the the employees subcontract company but that ended up as January, probably. Hopefully Zaza will put this all right in the New Year.

So the company of the employees (so a subcontract company) and hence the employees hadn't been paid for 3 months in 2018 & 8 months in 2019. Sounds to me that FRR decided to play it ruthless when they came to rescheduling of payment terms with YA back in 2018, that they wouldn't risk not being not in a position to make final payment to YA in the summer of 2019. So they stiffed the Subcontract company and hence it's employees rather than have any risk of forfeiting block 12 to YA. So as I thought a few weeks ago it looks like I was right to summise that YA became their priority to pay off and the rest could be sorted out later.

It's not how I would go about treating people and I'm guessing Zaza etc felt it what was had to be done to win the game however how poorly it was to those who were the ones contributing to the company continuing.

It also sounds like this article is supporting what came up on here recently that FRR has gone in with the GG and set up a joint company, 50/50 as part of the arbitration deal perhaps.

I'm guessing that either FRR will hope the resolution of the arbitration will sort out the matter for them soon or they can get in another subcontract company even if they have to pay upfront to carry on the work. Either way it sounds like FRR has been hard pressed if thousands of tons of oil have been rolling out but they still had to stiff the employees.

Well I'm glad off not getting any New Years Eve messages from Frontera considering what happened last year. I wonder if the Nomad told FRR it would have to resign as it would not be possible to not have updates to shareholders on the pending court dates. It's great that we haven't gone belly up during the year and oil revenue has been coming in. All seems down to what happens in January now and I'm hoping it will get sorted then and not get push back further. No reason I can't see for at least a result to Arbitration that allows us to then get on with it all no matter of the ins & outs. Worst case would be more waiting I think. On the plus side the guys here have done great in terms of fishing out some info on FRR over the course of the year :)

Aubree, what you say is true and why I say it's a company that feels like a basket case. At the same time though the value is what's in the ground, what has been discovered (and a small amount of which is currently being accessed. That seems to be valued at s lot of money and FRR currently have the deal on it. Depending on the outcome of the Arbitration over that deal it seems that even on a not too positive outcome that FRR could be worth a lot of money based on what's in the ground rather than the plight of the company's day to day situation. To me it's a pain that it's not already sorted and there is some more waiting to be done. I was hoping that November to December would be the dates that would resolve this but it's looking like it will be January now (I hope). My hope is that it will finally be resolved in a positive manner for us in January and we won't have a lot more putting off. Even if this share does not make me a Millionaire any good money in profit out of it could do well for me :)