Member Info for Welloiled

erazzel, apologies for misspelling your name earlier.

Ziggy and JimSlade, I have a copy of the Farmout Agreement of April 13, 2019 and there is no mention of Green Capital.
It said:
3.0 Agreement to Assign
3.1 Subject to the conditions of this Agreement and in exchange for the consideration set forth in Article 6 below, FRGC hereby assigns to FRUS an undivided 100% Participating Interest in the PSA with respect to the Farmout Area and its entire Operating Company Interest. FRUS agrees to accept such assignment
3.2 The assignment pursuant to Article 3.1 above shall become effective on the Effective Date.
3.3 As of the Effective Date, the respective Participating Interests of the Parties with respect to the Farmout Area and the corresponding Operating Company Interest shall be as follows: FRGC 0% FRUS 100%

4.0 Government Notice of Assignment
4.1 As soon as reasonably possible after the Effective Date with respect to the assignment under this Agreement FRGC shall submit to GOGC a notice of assignment In accordance with Section 27.3 of the PSA. That notice shall include a statement by FRUS that it (a) has the technical and financial ability to perform the obligations to be assumed by it under the PSA; and (b) as to the interest to be assigned, accepts and assumes all of the terms and conditions of the PSA.

It is a mystery to me that only a couple of weeks later on 02/05/2019 the US court Case 3:19-cv-01996-RS Document 23 it stated "Additionally, Outrider has learned that Frontera has approved a production sharing contract through operating company FRGC, which improperly grants unknown party Green Capital LLC a security interest directly in the operating assets, in violation of the OMF loan agreement. Despite numerous requests by Hope, both in his capacity as secured creditor and board member, Frontera has refused to provide meaningful basic detail regarding the Green Capital transaction".

eraxxel, strictly speaking the Tbilisi City Court (acting on behalf of Georgia) didn't transfer the licence but that was the effect of the decision as these paragraphs from the translation show:
3. To grant "Green Capital" Ltd the exclusive rights on Dedoplistskaro, Signagi, Sagarejo, Gurjaani, Marneuli and Gardabani territory (Geological allotment area on the plan – 5060 (5 Thousand Sixty) sq. m.) to operate on production of oil and gas granted to "Frontera Resources Georgia Corporation" from 27 August, 1997 to 27 August, 2022, by an agreement on the share distribution of products and the study of a processing plant.
4. “Green Capital” Ltd. shall be recognized and registered as a party of "Agreement on the Distribution of Products and the Study of the Processing Plant", dated June 24, 1997.
5. To register “Green Capital” Ltd. (ID 402052372) as a 50% stakeholder of “Frontera Eastern Georgia” Ltd (ID 204905674) instead of “Frontera Resources Georgia Corporation”

“Green Capital” LTD (ID 402052372), hereinafter referred to as – “Trustor”, empowers Giorgi Kishmaria (P/N 62006053441), as a “Trustee” to protect the interests of the LTD.
Trustee is authorized to represent the Trustor at the National Agency of Public Registry and within the representation to submit an application/request on registration of “Green Capital” ltd (ID 402052372) as the 50% stakeholder of “Frontera Eastern Georgia” Ltd (ID 204905674) instead of “Frontera Resources Georgia Corporation”.
Trustee is entitled to represent the Trustor in Oil and Gas Corporation and within the representation request to grant "Green Capital" Ltd the exclusive rights on Dedoplistskaro, Signagi, Sagarejo, Gurjaani, Marneuli and Gardabani territory (Geological allotment area on the plan – 5060 (5 Thousand Sixty) sq. m.) to operate on production of oil and gas granted to "Frontera Resources Georgia Corporation" from 27 August, 1997 to 27 August, 2022, by an agreement on the share distribution of products and the study of a processing plant
The Trustee is authorized to address Oil and Gas Corporation to recognize and register “Green Capital” Ltd. as a party of "Agreement on the Distribution of Products and the Study of the Processing Plant", dated June 24, 1997.

Please note where it states 5060 (5 Thousand Sixty) sq. m.), I believe (and some other members here) it is an error and it should be 5060 (5 Thousand Sixty) sq. km.) which is the correct area of B12.

There's no doubt about the identity of the Green Capital company the court transferred B12 to, as laid out in the transcript posted by Looed on 09/04/2021 @1:54, and these documents provide proof:
https://bs.napr.gov.ge/GetBlob?pid=400&bid=boVlyOwlsX3qmYsntmLmFAjABhq1PLr497M[C[L9[9hpZAMw2HouNr]2Ezi6unoe
https://bs.napr.gov.ge/GetBlob?pid=400&bid=boVlyOwlsX3qmYsntmLmFJJUcu8s1Dc1HTnhfUiHuQu5ECuw6EtdK1p6RRzdLwR6

Madpunter, I think it is just a coincidence. Green Capital Ltd was first registered on 09/06/2017 with Sandro Moniava (01024068034) as owner and director with the address N 18a, apt. 5, Gogolauri Street, Tbilisi and on 08/05/2018 the ownership was transferred to Otar Urushadze at 30 Alexander Griboedov Street, Tbilisi with Sandro Moniava remaining as director who was later replaced by Otar on 21/07/2020. As for the BoD carrying out DD on the US GC, it could have done so at some time if Goit's and JimSlade's recollections are correct but I can't imagine that, if and when it came to signing a contract, the BoD didn't notice it was in fact dealing with a different GC company registered in Georgia. There is certainly much more to this story which we as shareholders are unfortunately not privy to but deserve to be at least kept informed by the BoD. My speculation may be well off the mark but as you point out, if a book or film is ever produced about Frontera's journey it will be difficult to believe as factual because it is definitely stranger than fiction.

Cheers Ziggy, you raise very valid point regarding FTI and it would be good if you can dig out anything in the NY papers as I can't believe Green Capital is deemed to be a suitable and capable company to farm out Frontera's assets. With regard to the Georgian court case, I questioned whether the BoD was aware of it and as you also have speculated, FTI was probably in the dark as well.

As a further thought, if Green Capital was misrepresented in the contract or it contains misleading information, I believe it would amount to fraud and be invalid. I expect the BoD and lawyers have been all over it with a fine toothcomb.

Madpunter, the reason why I'm speculating the the BoD did not know about the Green Capital contract is that they would have had to carry out due diligence on the company and, as I have discovered, it has no track record in the O&G industry being owned and run by a Professor of Radiology. In addition, the BoD would have required guarantees from Green Capital that not only it had the wherewithal but also the finance. All this would have been documented in the contract and presented before it was agreed and signed off by the BoD. As far as misleading the court, Zaza could have represented Frontera in a way that confirmed Green Capital's claims but the court was specific in it's ruling by identifying Green Capital by it's company number 402052372 and Otar Urushadze as director.

Jim, you are right in thinking there is a Green Capital with an office in New York which JonBoy and Aurora previously posted this link to it: http://greencapitalllc.com/. It's a private investment company which runs a Green Energy Infrastructure Fund and boasts it has "a recognized energy sector track record comprising 65+ years of combined energy industry experience, $5 billion in acquisitions and project development investments in over 20 countries". It's focused exclusively in the energy sector and with a specific interest in renewable and green energy investment.

Thanks Aurora for reposting that information as it is very pertinent to Frontera's plight.

Goit, it would be interesting to have details of the 150/160 million loan you mention which I assume is in US dollars. The last loan I am familiar with was when FRR signed a term sheet with a New York, U.S.A.-based fund for a loan of up to $60million on 11/12/2018 (https://www.investegate.co.uk/frontera-resources--frr-/rns/financing-update/201812120700021694K/). From researching the origins of Green Capital and their owner, a Professor of Radiology, I can't in the life of me see how he or the company (which is less than 4 years old) could have access to that amount of capital when there is no indication Green Capital or it's 3 year old subsidiary, Caucasus Energy Supply. are successful and profitable businesses with substantial assets.

bedex you are quite right drawing attention to the difficulty of bringing a successful action in Georgia. However Georgia can't ignore international opinion and influence especially where a US company is concerned. It is not in Georgia's interest to be seen as a country that does not have a fair and lawful business environment as it would have a negative impact on international investment. Also Georgia governments wish to strengthen relations with the EU and have expressed their ambition to join the EU. I don't underestimate the uphill battle Frontera faces to reverse the court decision which awarded Green Capital $5.8 million and B12 but it depends on the evidence and testimony presented to the court on which the judge made his decision. If Frontera can prove that the contract was invalid and Zaza activities were illicit then we have every chance of recovering the situation.

Cheers Arsenal, wouldn't it be good to get our hands on the minutes of the BoD's meetings to see if they ever discussed the Green Capital deal let alone approved it?

Speculation Part 2

There are 4 Frontera companies registered in Georgia; Zaza is still registered as Director for LLC Frontera Resources Georgia (FRG) on 06/04/2015 and Frontera Resources Georgia Corporation (FRGC) on 11/05/2020. He is now General Director of Frontera Eastern Georgia Ltd (FEGL) as of 02/04/2021 but he was replaced as Director for Frontera Resources US LLC (FRUS) on 12/01/2021 by Dustin John Aro. In recent interviews in March, Zaza has been keeping up appearances and has been addressed as Director and Head of Frontera in Georgia and President of Frontera Resources. Although Zaza is no longer part of Frontera’s US management, his status in Georgia remains as a Director of Frontera companies and he therefore can arguably speak for the company in an apparent legitimate capacity. Consequently, it is not surprising that in the Georgian court case Zaza was identified as the Defendant representing Frontera Resources Georgia Corporation CR-72227/USA/, Branch of Frontera Resources Georgia Corporation in Georgia. It was an oral hearing and, as Looed pointed out, legal representation seemed to be absent. It is unclear when Green Capital brought the case but the translation from Looed mentions 5000 GEL paid by on 04/03/2021 so it gives the appearance the case was done and dusted in a month without detailed documentary evidence. It begs the question; did Zaza vigorously defend Frontera’s interests or did he concede to all of Green Capital’s claims? The judge’s decision strongly suggests the latter. More importantly, was Frontera’s BoD in the US aware of the Georgian court case? I doubt they were because it would have been their duty as Directors and on behalf of Frontera shareholders to attend as lawyered up defendants, preventing Zaza from representing Frontera.

As I said, this is pure speculation but it is based on information I have been able to gather.
I consider Frontera’s fate is far from over.

Speculation Part 1

I’ve been rolling over in my mind a possible explanation of what has been going on with Zaza. Please note I am speculating and I am not accusing anyone of illegal activities.

The first mention of Green Capital that I am aware of is in Case 3:19-cv-01996-RS Document 23 Filed 02/05/2019 on page 7 which states: “Outrider has learned that Frontera has approved a production sharing contract through operating company FRGC, which improperly grants unknown party Green Capital LLC a security interest directly in the operating assets, in violation of the OMF loan agreement. Despite numerous requests by Hope, both in his capacity as secured creditor and board member, Frontera has refused to provide meaningful basic detail regarding the Green Capital transaction.” What if Frontera’s BoD was unaware of this transaction and as director of FRGC, Zaza did the deal in behind their backs? This could explain why Frontera refused to provide meaningful basic detail regarding the Green Capital transaction because the BoD did not know about it, but when it did, it took action against Zaza. Hence the recent communications from Frontera confirming the company is aware of Mr. Mamulaishvi's attempt at illicit activities and this could be the background behind the US court case.

Speculating further, a clandestine deal could not have been done on the fly as groundwork would have to be prepared beforehand. There is credible evidence that Zaza knew the owner of Green Capital, Otar Urushadze, from his medical studies at TSMU where Otar also studied and worked throughout his career and is now the Professor of Radiology. As owner and director, Otar registered Stream Georgia Ltd on 14/01/2016 and on 29/05/2017 he registered Stream Capital Ltd a 100% owned subsidiary. On 09/06/2017 Green Capital Ltd was registered with Otar as owner. Later that year on 27/10/2017 the ownership of Stream Georgia Ltd was transferred to Manana Mamulaishvili and Otar remained director. On 27/04/2018, Caucasus Energy Supply Ltd, a 100% owned subsidiary of Green Capital, was registered with Otar as director (and therefore owner). I have tried to find more information on Manana Mamulaishvili but I’ve only found a dentist in Tbilisi. However, her personal number is only 477 lower than Nikoloz Mamulaishvili (see my post on 07/04/2021 17:20 for info on Nikoloz's involvement in Frontera companies) so Manana is of a similar age and it is reasonable to think she is related to Zaza as a sister or sister-in-law; it’s possible she could be his wife as she is around 5-6 years older. Note that all of these Otar companies share the same address, 30 Alexander Griboedov Street, Tbilisi.

Frontera have 30 days to appeal the court decision and I'd be surprised if they did not given that Zaza was the defendant representative, the active Director of FEGL and his strong links with Otar Urushadze, the owner of Green Capital and Professor of Radiology at TSMU. I would like to know how Frontera came in debt to Green Capital to the tune of $5.8 million and how and why Frontera approved a production sharing contract through FRGC (whilst Zaza was Director) granting Green Capital a security interest directly in the operating assets (in violation of the OMF agreement as claimed by Hope).
This smells bad.

From the Morgan Stanley placing document in 2005, the Summary of the Block 12 PSA and Mineral Licence stated:

2. Mineral Licence
“In accordance with the Law on Entrails and the Oil and Gas Law, exploration and production of oil is subject to a licencing regime. The Operating Company holds a mineral licence issued by the Ministry of Environment and Natural Resources Protection. The Mineral Licence is issued for 25 years and is valid until 27 August 2022.

The Licence was issued to the Operating Company, in accordance with the Block 12 PSA, which provides that the Operating Company has the exclusive right to conduct Petroleum Operations in the Contract Area.

The Mineral Licence sets out the rights of the holder to the exploration and production of existing oil and gas deposits located within the territory of Block 12 of Georgia, the conduct of geological and ecological studies of the territory, and exploration and exploitation of oil and gas deposits in the territory of Dedopliskaro, Signagi, Sagarejo, Gurjaani, Marneuli and Gardabani. The area of geological allotment is approximately 5,060 km2.

The Mineral Licence also contains provisions relating to the rate of mineral use tax payable by the Operating Company to the State and obligations imposed on the Operating Company, including compliance with applicable technical rules, keeping records of oil reserves, ensuring the security of employees and the notifications of disasters and accidents.”

The granting of exclusive rights to Green Capital in the court case identifies the areas in the exact order as set out in the placing document. B12 covers 5060 sq kilometres so I have to assume that the 5060 sq metres in the translation is an error. Even 1% of B12 that Frontera was reported to retain is 50.6 sq kilometres.

If Green Capital have been awarded the whole B12 licence area, I have no idea how Green Capital have proved they have the necessary finance, technical expertise and resources to develop and exploit the O&G potential. However, the court does not appear to have ordered Frontera to hand over the all of the seismic and well log data together with the geological, geophysical, petrophysical and engineering data for B12 that Frontera has amassed.

I understand Zaza was born in 1965 and Otar Urushadze was born on 05/02/1958 in Tbilisi. Otar graduated from the Medical Faculty of the Tbilisi State Medical Institute in 1982 and from 1982 to 1984 he was Clinical resident of the Department of Radiation Diagnosis and Radiation Therapy, Tbilisi State Medical University. Apart from studying for a postgraduate degree at the Moscow Scientific Centre of Oncology he has remained at the TSMU throughout his career in varying positions and he's been Head of the Radiology Department since 2015. It is therefore probable that Zaza has known Otar from when he studied medicine at TSMU and Otar may even have been his tutor.

Yes Freeatlast, Zaza graduated from Tbilisi State Medical University at which, it so happens, Professor Otar Urushadze is on the list of Academic Staff in Radiology, see https://tsmu.edu/ts/content/2/45/0/0/0/0. What a coincidence!

Madpunter, it doesn't look like the same guy and if Professor Otar Urushadzeis on facebook, I would expect him to provide details of his degrees and work.