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Posted by the 'real' Symore_Bottoms on ii.
"As usual, great contribution ToT. Yes, the US Regulator is very tough on these kind of dealings and these kind of hedge funds (lest we forget the Madoff and his Ponzi hedge fund). Therefore, I do hope FRR takes it all the way. Remember, Hope was trying to ‘procure’ an event of default on the back of the YA situation. This is where FRR may have obtained email communication from YA where Outrider was trying to get insider/confidential information. Also, recall at that time, we debated whether an event of default on Preferential Shares can be ‘cross defaulted’. Nevertheless, that situation has been regularised with YA and putting Outrider in an even worse position now. But here’s the malignant intent, why would you deliberately try to bring down a company that owes you millions? Surely recovery of debt can only come from a going concern company. As far as I am aware, administration normally means F’all for the creditors especially when the company has minimal cash flows and assets. But we know Hope and Outrider were successful with Madagascar Oil around 5 years back so he’s trying his luck again. But this time, he’s got caught with his hand in the till. And while the Market isnt ascribing a fair value to us presently, we know there is great value in FRR, both in terms of oil and gas assets but also via the cost recovery pool.
Having said all that, I would like a speedy resolution and if that means we only settle on the CLNs at around $30M, it would mean the balance sheet would be virtually clean allowing for more conventional debt. But I get the feeling that FRR are going to make Outrider+Hope pay this time and finally put this loser out of his misery.
Let’s see what next few weeks bring…"
Posted by ToT on ii
"With the trading action we’ve seen here over the last few months I can’t help thinking that a transfer of ownership is taking place, given that the selling is to an extent at least being balanced by a regular buyer of 5m blocks and sometimes more. Just the one 5m buy today but on days of greater selling pressure the buyer always seems to step uo to the plate to avoid a large drop in the sp. So I’m just thinking aloud here and sharing some thoughts as to what might be going on.
It’s been a very long time since we were notified of any share issuance to service providers, but with Baker Hughes likely to be fulfilling a much larger piece of that role in future maybe we are seeing the rump of their shareholdings being sold. Another and perhaps more likely candidate is Outrider if buying stock without declaring it had been part of Stephen Hope’s “unlawful interference with the business of the Company” in other words a part of his strategy to seize control of the company alongside working with YA to trigger a cross default on the loan notes, and maybe as a hedge against that strategy not succeding. Now he’s been caught out it could be that the stock is being sold to help fund litigation and any award against him and the funds he manages.
But the question then arises as to who is the bulk buyer as I have seen no evidence of PI’s laying claim to some of these large buys, some amounting to 12m shares in one trade. Can’t be Zaza or SN as they would have to declare any trades immediately, but nothing to stop Baker Hughes or the as yet unnamed major building a stake in the company for what’s to come, and no need to declare until they pass the 3% threshold. All a mystery really but I would welcome any other constructive theories as to what’s really going on here and as to why the seller just has to pounce on any rise to kill it stone dead.
Baffled"
regdik......True point taken!
Am pretty tied up this morning – but a few first thoughts:
Make no mistake about it this is a major step forward, and any LTH should feel very pleased. I have said before that we are no on a journey and IMHO the end game is a JV to develop probably all of Block 12. This move entirely supports that view.
The MOU is extremely broad ranging in nature – allowing all sorts of options going forward. Hence an MOU is exactly how you would start the process.
This seems to fit Zaza’s operating partnership model – at least at this stage of the game.
I would expect the next related RNS to be the 2019 field development package of work on Tarabani. An MOU of this sort would be a logical first step to secure funding – eg EBRD or similar – with Baker Hughes perhaps doing some form of upfront service provision. I also suspect Baker Hughes maybe one of the vendors re the debt from 2016/17
Also suspect some comment on a reserves update in the fairly near future. Perhaps again linked to EBRD type financing
If I am right this is fantastic news. Zaza cleared wanted to retain licence ownership at the last Q&A (at least until the fields are fully proved up), and all of the above suggests that that is the route we are taking
Baker Hughes claim to be the only major “full stream” service provider out there. Again leads you to say this will end up as a JV with Baker Hughes a key player, but others joining in at a later date.
The arrangement surely puts paid to any GOGC/SOAG issues.
Following todays (Mondays) RNS you can bet the shorters will be pulling all the strings they can to undermine todays announcement. OK is this one of the two industry majors that Zaza has referred to if so still one more to go. BHGE are huge and I would hazard a guess that todays announcement lays the ground work for and was initiated largely by the second ‘industry major’ prior to the next super RNS. Just my thinking!
RNS Number : 3966F
Frontera Resources Corporation
29 October 2018
29 October 2018
Frontera Resources Corporation
Frontera Signs MOU with Industry Major
Frontera Resources Corporation (AIM: FRR), the European-focused oil and gas exploration and production company, is pleased to announce that, on 26 October 2018, its subsidiary Frontera Eastern Georgia Limited signed a Memorandum of Understanding (“MOU”) with Baker Hughes Services LLC, a GE company (“BHGE”), regarding future mutual cooperation with regards to the Company’s Block 12 asset in Georgia. This MOU is a result of previously announced discussions with industry majors.
Under the terms of the MOU, the Company and BHGE will collaborate with the aim to improve efficiency of operations, enhance service capacity and capabilities, and commence in-field drilling and intervention campaign to increase production and recovery of resources in the Taribani, Mtsarekhevi and Mirzaani fields of Block 12 in Georgia. For this purpose, BHGE may provide equipment and products, technical services, project management and other related services on as needed basis (“Work”). This may include, but not be limited to: provision of BHGE expertise, knowledge, process and procedures for agreed areas of collaboration; project management and field engineering services; BHGE digital solutions.
The MOU divides the scope of work into three phases. During Phase I, candidate wells at Taribani will be chosen to work on field program with the aim to increase oil production. During Phase II, the parties will cooperate to work on Taribani field development project that may include, but not be limited to, the Work. During Phase III, the parties will cooperate to work on future projects that includes BHGE solutions and expertise with regards to the natural gas monetisation.
Pursuant to the MOU, the parties will work together towards entering into definitive agreement(s) which may include, but not be limited to, commercial models regarding increasing the field production, BHGE’s provision of services and products, and the Company contributing to the venture via sharing of its oil and gas production. The MOU will remain in force and effective until 26 September 2019 and may be terminated by either side giving 30 days’ notice. The entry into such definitive agreement(s) is subject to the finalization of ongoing due diligence by BHGE.
Zaza Mamulaishvili, President and CEO, commented:
“I am excited to report that the MOU with BHGE has been signed. This MOU sets very important terms and areas of cooperation between the Company and BHGE, who is the one of the best and the largest players in the industry. This cooperation will deliver the best of BHGE’s expertise, knowledge, know-how and services that will be applied towards increase of production and development of our oil and gas fields in the Taribani, Mtsarekhevi and Mirzaani areas of Block 12. We are continuing to work with BHGE with the view to entering in
This from ToT on ii:
"Yes I thought that the improved well economics was the main take away from the second interview but why do two similar interviews in two days? My take was to strengthen Zaza’s hand in negotiations with the majors insofar as a rising share price would help concentrate minds and encourage them to get a move on or increase any indicative offers that might have been tabled.
ZM must therefore be as disappointed as I am with today’s SP reaction. It might also be the case that given all the shenanigans with YA and Outrider that Zaza feels we are vulnerable to a hostile bid coming in, so if it does I do hope that people will support him in batting it off, and maybe that little slip up where he mentioned a THIRD major was the one he is worried about."
From Devex on Ii.................”The key phrase in relation to the Q&A is :“The Company confirms that there is no further update from the position previously notified, other than in respect of the action in Cayman Grand Court,…” So there must have been complaints to someone - perhaps the FCA Market Abuse team – regarding disclosure at the meeting. They have then been asked to put this RNS out. The complaints probably came from the usual suspects - but here is the great thing - a) the RNS effectively says there was no new information, and b) it gives them the opportunity to reiterate the bit about the Majors in very clear words.
Re Outrider I have no idea, but the timing is interesting and of course Hope is to all intents a hostile board director, his appointment obviously being a part of the deal to create the 2020 notes. I suspect that the issue has been kicked off by the prospect of a deal with a Major – and probably has something to do with the fact that the notes are with Frontera International and a deal will effectively be with FEGL. The fact that the short statement reaffirms that the notes were issued by Frontera International sort of supports this view.
The other thing is that there were in fact two blocks of notes issued – one by Outrider Master Fund LLP, and by Outrider Management LLC. The Caymans action only seems in relation to the former – not the collective Outrider. Can’t think why unless there are slightly different terms.
I guess one question might be - if a JV or similar were to emerge with a significant cash injection to FEGL regarding Tarabani where does the ownership of the asset sit, and how might a share of the proceeds sit regarding other creditors outside of FEGL. One thing for sure – the prospect of a significant deal is probably resurrecting a few historic issues.
I should add that if I am right about the reason for the Q&A response you can bet your bottom dollar that the Nomad will have been back to Zaza before signing this off. He will have wanted to see more on the majors than just a signed NDA.
Things are hotting up!!!”
This from Seymore B on iI......."So, the company didn’t really break from tradition and issued the interims results with little commentary on ‘operations’, except… it slightly did break from tradition, and decided to issue it a day before the regulatory deadline. Was there any interesting bits in there? Not really, very sterile. So, we are clearly due another ‘standalone’ update, and definitely before Thursday’s get together. Investors need clarity on the Niko drill and we need to know that status of the EWT. Zaza’s ending comments were interesting, particlularly this bit “…advancing the efforts to clean the balance sheet to strengthen its financial health”. Well, to me this mean dealing with YA for once and all. And at US$2.6MM, you would have thought FRR should have many options. Other than that, great to see that they collected the full amount from the Turkish Contractor. Plus as at 30/06/18, they recorded a cash balance of US$633k, which would have taken care of at least couple of months of YA installments. Inventory at US$4.6M relates to oil waiting to be sold and perhaps these are the train loads we saw a few months back on Twitter. Very quick post as I have to run to another meeting.
But definitely expecting a detailed Operational Update before next Thursday."