Member Info for regdik

what was wrong with my .78p price more than 100% up from here. I really do I/m wrong and that my 3p dream comes true.

Based on ZaZa own forecast that we will be a billion/s $ company in 3 to 4 years I think this will be a slower burn than people think.
Announcement of a deal we will do a 10 fold spike to around 3.8p dropping to just over 3 by Christmas as profits are taken. As feet hit the ground in Georgia and holes are dug the sp will rise to 4p in 2019. However, FRR will immediately invest in Moldova and late 2019 the first well (gas) will be completed and start EWT process. If they look good then the sp may double towards the end of 2019. This will also happen if the second major concludes a deal for one of the blocks.
2020 outrider are paid off and FRR become a partner/invest in a gas liquification plant. SP wll rise on this news. During 2020 early production sales start to pay royalties and the SP rises to 15p mark.
2021/2 Exxon puts in a bid for Georgia B12. SP goes mad,
So my guess is .78 as I have just woken up from the dream above (or is it!)

All major O&G companies have a future vision based on 3, 5 and 10 year plan and publish updates regularly so that the market can see that they are adding value and are well managed. This is underwritten by their investment in projects and generally 3 yrs plan is fully funded and 5yr funded to planning level and 10yr to concept. They base the budget on an estimated POO expectation and this is published in the planning assumption. The major investors/market like this as it clearly defines what to expect and at what cost hence major O&G are deemed low risk investments (unless the unexpected happens like the Gulf spill).
To change the plan the investors/market would want to see a fully funded and resource plan. This could be removing a project (generally frowned upon as to get to full funding a lot of sunk costs will have been committed) or increase the fund pool by selling none strategic asset or using profit without impacting dividend. So POO windfalls and avoiding additional tax liabilities are a more acceptable method as the planning is not degraded but enhanced.
So we would be looking for a major who may have been selling asset and have a windfall profit due to the increase in POO.
In the case of FRR - the buy in to a JV would be less than a total buy out (as most agree this is a world class asset) and not derail the majors published plan by adding a significant change. Plus the FRR sunk costs (440M) will be recoverable over a period of time as I would expect the JV agreement would transfer this to the JV entity. So FRR could get this in one lump from the major or a number of staged payments as the fields are developed.
Majors are risk averse due to the dependency of the investors (pension plans) reliance on regular dividend payments.
To throw multi billions a resource in a politically sensitive region, no history of OG and not yet in NATO would not sit well with a lot of their shareholders. Hence I think a more conservative approach will be agreed but any deal with a major can only be great news.

Simple - none of the majors could afford to buy out that level of asset - you are talking multi billions for 1 or 2%.

Less risk for them buying into a JV at a lower $ price and agreeing royalties than paying astronomical price then spend millions developing the field (in a difficult topography). It would take 10's of years before breakeven point is reached. A JV would see profit in year 3.

It depends on the resources they throw at it but I would expect that a planning would have already been started and expansion of the regional offices reviewed. Its not just drilling a load of wells but the logistics of setting up a field base, mobilising engineering resources, building roads, storage tanks and well interconnects and distribution pipes. A lot of projects that interconnect. BP have the Baku office already in place in Sunbury and a strong regional presence so can react quickly but diverting resources to the Georgian project. However, to divert this resource to a competitor would not go down well in Azerjaban so I expect a separate offshoot to be located in Georgia.
With winter coming I would expect nothing substantial to happen in the field until spring 2019. Many 100s of millions will be spent before any volume oil/gas is sold in anger. It could be the current wells will be capped and re-drilled in line with the standards of that company and the old problem Russian wells left alone. I would expect Georgia to start seeing the benefits 3 to 5 years time. FRR would be compensated by the cash payment then royalties that they may not see for 3 years (majors will want to recoup their cost too). The prize will be large and will propel FRR into a billion $ company.

I have reposted below something posted a couple of weeks ago. Its seems more relevant as FRR seem to be close to a JV arrangement with one or more Majors.
Remember that FRR sunk costs will be recoverable as long as FRR stay in the loop (300/400M). The majors will want the deal done and dusted and any cash payed out before year end as they would like to use the windfall profit raised due to ever increasing POO. Otherwise the taxman will take a good chunk - what would you do in their position - smile and pay out a large cheque to the taxman or buy into an O&G rich piece of acreage that is on land, close to a major gas distribution pipeline and market desperate for gas.

Repost
SP prediction is not my forte
But I assume that with FRR history they would like to keep a slice of the action so I think that they will be looking for a JV rather than a total sell off. They have put a lot of effort (and testing) in Georgia so I recon the target outcome will be a JV with one or more major. If you look at the FRR web pages Moldova takes a larger slice of their focus so that leads me to believe that Georgia will be left to the primary JV partner and FRR looking at drilling new prospecting wells ahead of the JV who will focus on field development.
Moldova will be the new focus.
So what type of deal would I expect.
If a JV then I would not expect anything less than 3 times the sunk costs (circa 900M/1200M). If FRR are still in the picture then the first 300/400M (arbitration) will still be recoverable hence adds to the JV thinking. FRR will get a % of turnover/profit I would estimate @5% o 10%

How would that relate to an SP I haven’t a clue as FRR may want to pay a one off divi but I would expect that a SP to be between 3 and 5P rising as the fields are developed any profits realised but that may take a couple of years.

ZaZa will have a very profitable billion/s $ company.

It would be normal for FRR and a major to work together on the testing and data share. Therefore both parties would share. The base document would have been the FRR CPR supplemented with the EWT results. The major would not need NSA to verify as this would add delay, cost and time. The majors are more than skilled to verify and model the field. I was surprised last night at the mention offered a new one as this would only be done on a new field or seeking finance from a third party. I agree with SB that a major would seek to register a deal before YE to offset costs on this years profit.

Forget super majors, forget 3 months just look at CPR statement as this is the real reveal from the meeting as this costs money, time and resources and if they are still talking then we are onto something special (not to mention greater recovery potential). Nothing more needs to be said.

News or no News
If we get an RNS tomorrow they are several topics that could be covered from Arbitration to ZaZa appointing a new director to the BoD from one of the majors (all I could think of to get AtoZ). They are lots of RNS opportunities for ZaZa to have a go at.
But he could also brush the dust off the good old PP presentation and added a few layers of opportunity and a few more billion of potential reserves. If he did this then I’m sure a few will ask the question (strongly) when will the potential become Assets on the balance sheet.
If no news prior then options to discuss become limited
He could discuss that the 1000bpd for year end is on track (or exceeded) as this is in the public domain.
He could explain the YA/GG issues without going into legal area, but I bet most of the question would stray into that – we would get can’t answer that due to legal reasons. So not a lot of value as only one side of the argument will be given.
He could confirm if the next well is to be drilled (or not) as its supposed to be funded.
He could explain the accounts to us all
He could say sorry for last Christmas empty stocking then buy us all a pint
Without an RNS then I agree that ZaZa options would be limited as the Nomad will be monitoring every word.
So I hope for an RNS prior to the meeting are it may not be worth the time/trip/expense apart from meeting the fellow LTH “morons”.

Kickmuck is kickmuck and I have never read that he claims to be connected or ITK. However, reading ALL of his post it shows a level of knowledge of the geology, methods and groundworks that is way above any other poster on this or any other BB. He can be from the frozen north (Scotland) or the deep south of Texas and wear a Stetson and a wife called Sue Ellen for all I care. His comments seem to suggest he has a connect of sort to what is happening in the region. I seem to recall C5 very early posts also showed a deep knowledge of that region – has he reincarnated (and with a personality).
What matters is that he has shared his thoughts and knowledge with us. That gets a big tick up from me.

Oh dear
I've I joined a playschool BB - emoji of a sad man sent into the corner with a dunce hat on.

Haven’t a clue who kickmuck is but the poster has clearly used all of the information regarding FRR in a concise and easy to follow flow. Certainly a knowledgeable oiler who has either done a lot of research or has been part of the action in any case I rather read a well constructed post than some of the musings from the ill informed or self interest parties contribute.
A few interesting points to note that was highlighted
Shares being redistributed in a planned way
YA issues are close to a compromise
Inference that not only two majors are looking closely at the company
It will take very deep pockets to fulfil the potential (I remember KK saying similar)
GG want it move quickly

Not often we get a poster addressing several issues in one post in such a assertive/knowledgeable way.

Is he Dustin? I’ve read pros and cons some based on one word. Worked for a Californian in BP and he used lots of terms/words not stereo typical American (yes mate was one of them).

Just a good intelligent read

There is too many refineries in the world and many have been mothballed during the oil price slump. Therefore refining product has never been cheaper. Its only worth building a refinery if you have access to cheap light oil (not heavy crude as a lot of its product has little value like tar). The high profit earners are aviation fuel and lubricants and most of these are from light oil. To pay Billions on a refinery then ship in oil make little economic sense to a country that has less then 5 million people. However, to refine top end products and ship out to your neighbours is a winner, They just need access to heap high quality oil.

Last time I looked this was a BB for discussing topics related to FRR.
Georgian politics may be relevant but I cannot see that religion, colour of your skin UK party political dogma is a proper topic.
Lets just drop it before our common bond is broken (misery of being a LTH).

SP prediction is not my forte
But I assume that with FRR history they would like to keep a slice of the action so I think that they will be looking for a JV rather than a total sell off. They have put a lot of effort (and testing) in Georgia so I recon the target outcome will be a JV with one or more major. If you look at the FRR web pages Moldova takes a larger slice of their focus so that leads me to believe that Georgia will be left to the primary JV partner and FRR looking at drilling new prospecting wells ahead of the JV who will focus on field development.
Moldova will be the new focus.
So what type of deal would I expect.
If a JV then I would not expect anything less than 3 times the sunk costs (circa 900M/1200M). If FRR are still in the picture then the first 300/400M (arbitration) will still be recoverable hence adds to the JV thinking. FRR will get a % of turnover/profit I would estimate @5% o 10%

How would that relate to an SP I haven’t a clue as FRR may want to pay a one off divi but I would expect that a SP to be between 3 and 5P rising as the fields are developed any profits realised but that may take a couple of years.

ZaZa will have a very profitable billion/s $ company.

Not a lawyer but a very close member of my family is. How can following the contractual agreement be entrapment. Of course this view supposed that FRR were savvy in this and had experience in court.
Your not worried are you..

Knowing is different to proving and as long as FRR followed the contractual agreement then there is no entrapment

A lot of good reasoning on the YA situation. Can I add another dimension.
FRR have a history of litigation and aren’t afraid to go to court and win or in the case of Outrider a reasonable outcome. Therefore, I expect that based on previous experience FRR would not leave themselves open to a YA counterclaim. Additionally it seems FRR are well connected with the right sort of legal expertise and political heavyweights that other companies could dream off (even the big boys).
If this comes to court in the US then I would expect that any wrong doings (remember the banking fiasco and the requests for extradition of senior banking managers) would result in sever repercussion and possible imprisonment, fines and request from FRR for compensation for both the company and their shareholders.
I seem to remember US courts have a very dim view of UK banking regulation management and would love to prove this point to the world and damage the square mile reputation.

Compensation could run into the 10’s of millions (if not 100’s) as the actions of an organised group bent on making profit if by using illegal trading practices. This would not be limited to the primary party but to those that aided and abetted the action of market manipulation.

I would have to check but as this is now in dispute and in legal then the repayment/s could be frozen until resolved.

I doubt that FRR would have walked into this without knowing the protentional repercussions and would have planned and carefully recorded every action pre and post this event (As Mole indicates this could cover many months).

Not only the next few weeks look interesting but also the coming year (in court).

Have a good weekend and look forward to seeing some of you on the 4th – I will be the one sitting next to the fat lady.

Could be an interesting meeting as at the moment there is very little ZaZa can discuss
Majors – sorry NDA
Flow rates – sorry as above but we are continuing testing
Arbitration – sorry in the hands of legal
YA – sorry in the hands of legal
August payment – as above as wording has to be passed by legal
GG tax rebate – this is ongoing as the Government has nothing to offset please see arbitration.
Results – as expected we made a loss but debt is being reduced and we are increasing sales revenues and expect to end the year at 1000bpd.
Outlook – Major discussions are at a delicate stage but will be concluded in line with the end of EWT (could not resist) Next year will be in line with previous forecasts/expectation unless things change.

Unless we see some significant news via an RNS ZaZa please feel free to use the above and I will tell the fat lady she can have a night off.

FRR are front and centre for the shorter crew and will take any opportunity to create uncertainty and destabilise the SH base. That might work on the casual trader or mr 10% but we have many "morons" LTSH that have made their own dealing decisions on FRR and will not let those "quality" people who have made a living out of others suffering and losses. I suspect/hope we may see one or two brave ones attend the meeting to bate or ask questions that would subject to RNS status. I say hope as I haven't seen a good lynching in years. All for free speech and searching questions but those that short for a living are on another planet and I would like to send them there.

I will be at the meeting and I hope it is different to the previous power point slide show showing lots of layers and potential billions of barrels (we have seen it and all have the T shirts - tomorrow will be better than today but tomorrow never arrives. . Lets hope it more along the lines that the good times are here and the bar is now open.
Then we can all sing along with the fat lady.