Member Info for Retireby40

This was from 8th May so it was still in clean up 2 weeks ago. Assuming it was flowing debris-free a week later that’s only one week flowing so I guess we’ll have to wait a little longer. Hopefully next week. Extended testing program commenced on 21 April 2018. The Company perforated and mechanically stimulated 9.5m out of gross interval of 27m situated between 2519m and 2446m of Middle Miocene aged Zone. At the moment the well is in the clean out phase and, once stable natural gas flow is established, the Company will update the market in due course.

Of course.

Something fishy is going on but where are 10m shares each day coming from? It can’t be the headroom as FRR would have to announce that so I don’t but that FRR is in on whatever is going on.

And the cancelled trades are now buys again. Fair enough, at least they’ve taken note and they’re not all sells! Makes it all the more fishier!

Without a doubt a sell.

All good and yeah he does speak a lot of sense.

Whilst we have a pretty unresponsive SP there is a lot of speculation re JVs/partners etc etc. Well here is my two penneth. And I start from putting myself in their shoes. So if you or I had ploughed nearly twenty years of our lives, and around $25- $30 million of our own money into the venture (not to mention not drawing payment as a director for at least 2 and probably 3 years) – what would be our game plan? Lets start with the oil, and assume that the WHI analysis is pretty much in line with FRR thinking. So an organic ambition to develop 250 wells – largely self funded – creating a WHI value of around $500 million (which Zaza claims to be understated). So you probably do just what they are doing – ie pull funding together on an individual well basis for the front end and eventually become self funding at $2.9 million per shot. The ii funding on Friday barely makes a difference to the end valuation in the grand scheme of things, even if repeated several times over (and the ii will have only committed here on the basis of a) early results and b) the plan). However a full scale strategic partner here – investing to accelerate the entire Tarabani roll out programme – will only accelerate the value achievement, not the overall field value. And at a cost that will seriously deplete value for shareholders including ZM/SN etc – probably by as much as 50%. So my bet is that Tarabani oil carries on largely as announced (but of course if the right offer came in you might just sell the lot). The Gas is in my view a wholly different story – despite what Zaza says (well he would wouldn’t he). There is absolutely no way that organic growth works here. Wells are around $5 to $7 million a pop, and serious gas processing and gathering infrastructure has to be in place to get this going at scale. Plus there is a huge political back drop. So I repeat my view that UD2 is more about test and prove than production. Plus why then do another MK 3D seismic? They have done this before – but I assume that interested parties are requesting an updated version. I have no doubt that if FRR demonstrate the gas is there in commercial volumes an initial partner reveal for the MK field will follow quite quickly. Then of course there is the rest of Block 12. Well that could be a JV/partner opportunity be it oil or gas – and again that is probably one of the areas being tested by the GOGC/SOAG challenges. So the eventual return for ZM/SN – and us coat hangers – comes from Tarabani Oil on our own, a deal on MK Gas, and any other deal that can be extracted for the other jewels in the Block 12 crown. As always just my view

Monthly updates maybe OTT but more info is needed with testing or interim testing RNSs especially as we’ve had a well produce nearly 1,000bopd but this rapidly diminished to very little. Therefore the market takes 315bopd with a pinch of salt. If we said it produced 3,400 over the first 5 days (1,000, 800, 650, 500 and 450 day 4) And has produced 315bopd stabilised from day 5 to day 21 we get a much better idea and shuts the shorters up.

Puddy that statement was in an RNS - The Company is currently progressing discussions with potential industry partners regarding a possible transaction involving a farmout or joint operation arrangement within the area of its Block 12 holding in Georgia.

It came to nothing but the RNS is regulated so the NOMAD would have had to have seen evidence. Anyway, as long as we can keep the bopd up and have a business that finally does not need to sell shares (dilute) to stay afloat I’m happy as we’ll have a sustainable business model and if we do hold serious talks we’ll be in a stronger position to negotiate a better deal as won’t be a sitting duck.

There was an RNS before a SN conference call - The Company is currently progressing discussions with potential industry partners regarding a possible transaction involving a farmout or joint operation arrangement within the area of its Block 12 holding in Georgia. Since then we’ve been told (not via RNS) that there is a NDA in place which is standard if in talks so nothing new but to say we haven’t had an RNS isn’t accurate.

I think the issue is those short are saying the ‘stabilised’ bopd was over a very short timeframe and will have dropped off dramatically as has happened in the past. We know the the way the zones have been targeted etc is different from last time, lessons learnt so although we’ll have a drop off in bopd it won’t be dramatic. What they should have done is provide more detail so initial flows and then how many days stabilised at XXxbopd. It’s clearly good or the II would not have put the money up (although there will be caveats). Ud-2 is nearly 6 weeks since over 9 metres was stimulated, cleaned up by now (took a while last time) so hopefully stabilised flow soon enough.

SB on iii- Nice find ToT - now video posted on the Govt's Facebook page with official signing with the Georgian Govt. My take away is that having Majors operating in Georgia like Repsol or Schulumberger (who won a few blocks last years), helps to validate Georgia's O&G propects and at the same time helps to loosen up all the red tape in Georgia around gas especially. Also, Exxon came, saw and apparently tested the field, but no official word on them yet. Anyway, it appears that SN's proclamation over the years that the Kura basin is a 'mega-basin' that stretches in to the Caspian Sea is finally getting some recognition. And if this is true, so must his estimates on oil and gas reserves on B12. So that leaves BP, who are very big in Azerbaijan and may be Shell whose focus has shifted to gas plays? Anyway, I hope Exxon show their intentions very soon. Is it with FRR or solo? I guess all this attention Georgia is getting from the Majors is principally due to Georgia signing the EU Energy charter and its ambition to join NATO - so the politically environment has changed. How much was it due to FRR? Probably a lot but I don't think they will get the credit they deserve. Com'on FRR let the cat out of the bag - we've waited nearly 2 years for this. Finally, another RNS this week.... JMO https://www.facebook.com/StateAgencyofOilandGas/videos/2299108310312956/

So very little additional oil will be reported for FY17 by end of June. What the company should do is expand on the strategic report (business model, strategy, KPIs, risk/uncertainty etc) as they have a lot more to say with the current work programmes. They can then report on progress, or not, FY18.

I’ll repeat. The oil revenue we’ve been selling this year will NOT be recognised in the AR that’s due to be published by the end of June as that will cover Jan 1st 2017 to Dec 31st 2017. The interim report which is due out end of Sept will cover Jan 1st 2018 to June 30th 2018 and will have some of the oil being sold. Because it’s stored, then transported, loaded and 45 days payment I’m not sure how they’ll account for it from a reconciliation point of view but it will have to be consistent. For example, if they sell 5,000 barrels on June 29 but are not paid until early August most U.K. firms would recognise this before June 30 as the oil was produced well before, stroked and loaded. Either way they have to be consistent to not double count etc. The second half (H2) of this year so from July 1st to Dec 31st should be a lot better and show our first half year profit. FY2017 will look crap although the balance sheet better than usual due to RPNs being converted.

Is that in B12 then?

Tot on iii- Again using google translate, but my interpretation is that Repsol will be focusing on the Kura basin. Possibly upstream of Block XII but you have to ask why are they entering the country now and not when various blocks were put out to tender around nine months ago? It can only be down to the fact that FRR have now proved up the commerciality of Block XII imho. https://translate.google.co.uk/translate?hl=en&sl=es&u=https://www.republica.com/&prev=search REPUBLIC / EFE | 05/29/2018 Spain's Repsol will conduct hydrocarbon prospecting in the waters of the Kurá River on its way through Georgia, after signing a memorandum with the Oil and Gas Agency (APG) of the Caucasus country on Tuesday. "The signing of the memorandum with the Spanish company is a great event for Georgia, which will benefit from a qualified investigation of the potential of the Mtkvari waters (as they call the Kurá in Georgia)," said the director of APG, Gueorgui. Tatishvili Repsol will assume all the costs of the prospections , for which a working group will be created in which Georgian experts will also participate. "The works will start immediately. The Spanish side is interested in knowing the potential of the Mtkvari to work here in the future, "explained Tatishvili. The Georgian Ministry of Economy, on which APG depends, said in a statement that the surveys, which will last about nine months, "will allow the identification of priority locations to investigate the Mtkvari waters." Experts believe that Kurá , the main river in the South Caucasus region, can hold important deposits of both oil and natural gas. The river rises in the Armenian Altiplano (Turkey) and travels through the territories of Georgia and Azerbaijan until it empties into the Caspian Sea." Tot

Are they not cancelled buys this time?!

The results are for FY17 so the P&L won’t make good reading. T-45 and Dino-2 oil sales won’t have taken place last year and some may fall into H1 ‘18 but not a great deal, most will be H2 so FY18 should make for a lot better reading than FY17. Hopefully they’ll add some meat to the strategic report as they’ve got a lot more to say than in years gone.

Posted on Advfn - Zaza said he wants to avoid more dilution as much as possible given years of it and I guess now his RPNs are converted to equity he’s properly aligned with holders now. I assume he therefore wants to pay YA off with oil revenues to avoid more dilution and a monthly agreement like last time. Having Niko fully funded with FRR receiving 40% of revenue until the II has its investment back and 70% thereafter sounds great as it’s all going to the bottom line. I imagine FRR will be able to fund all the additional wells assuming each well is stable at 200bopd at the very least although from their modelling and stabilised flow (definition posted by Mick) from just 2 zones I’d hope for nearer 400bopd but 200 would do. I honestly think now is the best time to be invested in FRR, the accounts ‘17 will be shocking but H1 this year published in Sept should be poor too but better and H2 and FY18 should be a lot better still.