Member Info for Welloiled

Arsenal, yes, could well be but as I pondered in my post last Friday 23:18, for the farmout of the licence to be approved, Green Capital would need to provide proof that it had the financial and technical ability to fulfil the obligations under the contract with GOGC. The court documents Case 3:19-cv-01996-RS Document 23 Filed 05/02/19 (posted by daniel1son @ 03:57 on 2nd May) mentioned that Outrider learned that Frontera 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 which may only refer to the pipelines and associated assets. Clearly Otar Urushadze is not an O&G man so he has to rely on Zaza to bring in the experience to run existing operations (gas?) but that's a long way from having the necessary finance, expertise and technical knowhow to develop the O&G potential of the B12 fields that remain in Frontera's control. It just doesn't add up.

For what it’s worth, I think I’ve found a direct link with Zaza and Green Capital which is owned by Otar Urushadze (01017003835). Stream Georgia Ltd (ID 404506717) was originally owned by Otar Urushadze when it was registered on 14/01/2016 but it changed ownership on 27/10/2017 (B17119752) to 100% Manana Mamulaishvili (01017019009) and Otar was then noted as Director who is also Director of Stream Capital (402052372) which is owned by Stream Georgia. However, I have been unable to find out if Manana is related to Zaza (01024002412) but I know of two other Mamulaishvilis, Nikoloz and Ramaz, with Georgian business interests.

Nikoloz Mamulaishvili (01017019486) owns Frontera U.S. Ltd (405373313) and Frontera Trading Ltd (405373466) which were registered on 15/01/2020 and 16/01/2020: He is also the owner and Director of H2 LLC (404605398) registered on 07/12/2020.

Nikoloz was an Officer in the Texas registered companies BC Holdings Land and Cattle LLC, BC Mining Company LLC and BMCN Holdings LLC, the latter of which was the controlling company with Steve Nicandros and Zaza as Members and Managers. These companies appear to be no longer active as their Franchise Tax was involuntarily ended. On 19/09/2016, Nikoloz was the Director of BC Holdings Ltd Georgia Limited (405056558) registered 31/07/2014, owned by BC Holdings Land and Cattle LLC, Texas.

Nikoloz is also the Deputy General Director Caucasus Minerals Group (203866316) with Ramaz Mamulaishvili (01018001468) as General Director; it is owned by the Overseas Minerals Corporation, Virgin Islands (UK). Ramaz owns 36% of Integra Ltd (205123196).

I previously posted that Zaza has other substantial interests in Georgia as on 30/05/2012, Zaza bought a 39% share in Rusmetali Ltd (216406306).

It’s clear that the Mamulaishvilis are heavy invested in Georgian companies and it is reasonable to conclude that Zaza is a relative of Manana who’s only business interest is Stream Georgia (from my research). Assuming that their Georgian personal numbers are chronological, then Manana is the oldest followed by Nikoloz, Ramez and the youngest Zaza (at around 55 years old).

Looking into Otar Urushadze, I have discovered he is a Medical Doctor who once held 25% of the Nodar Kipshidze Academy Ltd National Therapy Center (404882294) and he was the First Vice President of the Georgian Association of Radiologists (401950199). He is seen here: https://tsmu.edu/ts/images/file/1527681724-2-Department_of_Rentgenology.PDF

I find it rather strange that a Professor in Radiology owns 100% of Green Capital and 50% of FEGL!

Phil, a deal with Green Finance must have been done before 02/05/2019 because of the court documents Case 3:19-cv-01996-RS Document 23 Filed 05/02/19 that were posted by daniel1son @ 03:57 on 2nd May 2019 (as reposted by Madpunter on Saturday) stated "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". We know that GC was registered on 09/06/2017 with Sandro Moniava as director and owned by Otar Urushaze who is now the director. It is interesting that GC created Caucasus Energy Supply Ltd
(registered on 27/04/2018) again with Otar Urushaze as director. As Zaza is now the DG of GC, it is reasonable to conclude that he has been in contact with Otar for sometime and when Zaza left FRR, he has been involved in establishing this deal with GC. Georgia is a relatively small country and I expect Zaza and Otar have crossed paths in the past and I'm going to see if I can find a direct connection.

JonBoy, good find but I don't think so as it is a US company established in 2005 and the Georgian documents would have noted it.

Phil, I like you am struggling to understand what is going on. The filing B21033280 on 02/04/2021 lists seizures of pipelines in Sagarejo district/regions on 14/01/2020, 13/04/2020 and 11/06/2020, prohibitions 16/06/2020 and real estate naming FEGL: I believe the Sagarejo district/regions are in the Mtsarekhevi Gas Complex. It also lists real estate prohibitions dated 13/09/2020 for the District Dedoplistskaro, Villages Arboshik and Mirzaani, Shirak naming Green Capital (does this mean these areas are out of Green Capital's control?). From The Gamblers posts on Friday, I gather that Tbilisi County Court awarded Green Capital a 5.8million dollar settlement which the filing B21033280 indicates they have taken in pipelines and some real estate. The translation of the court case mentions the full area of B12 (5060 sq km), but it is unclear if the licence, or any part of it, has been transferred to Green Capital. Unfortunately, I've been unable to find the original court documents to view them so I would be grateful if The Gambler or anyone else can post a link to them.

Coggy, I've tried to find any info on Otar Urushadze, Green Capital, Caucasus Energy, Stream Capital and Stream Georgia without success so your comment is appropriate. The farmout to FRUS was prevented because FRUS did not provide proof that it had the financial and technical ability to fulfil the obligations under the contract with GOGC. I can only assume that Otar Urushadze has clout in Georgia as Green Capital presumably must have satisfied the conditions for the transfer.

It is reasonable to conclude that the decision # B21011490/3 (12/02/2021 21:55:17) to deny the transfer the 50% of FEGL owned by FRGC to FRUS has resulted in the 50% being moved to Green Capital. Whether or not it has involved a financial deal is unclear.

According to the new entry, B21033280 dated 02/04/2021, Frontera Eastern Georgia Ltd. Is now owned by Green Capital Ltd with Zaza Mamulaishvili as its DG. Green Capital also owns Caucasus Energy Ltd (or Caucasus Energy Sapphire Ltd depending on the translation) and is owned by Otar Urushadze who also owns Stream Capital Ltd and Stream Georgia Ltd.

Trademark: Frontera Eastern Georgia Ltd.
Legal form: Limited liability company
Identification number: 204905674
Registration Number, Date: 5/4-1369;07/08/1997
Registered Authority: Vake District Court
Legal address: Georgia, Dedoplistskaro, Gorgasali str., ?15
Email: FEGL@FRONTERARSOURCES.COM
Director General - Zaza Mamulaishvili, 01024002412
Owner Part Share ruler
Joint Stock Company Georgian Oil and Gas Corporation, 206237491 50%
Limited Liability Company Green Capital, 402052372 50%

Trademark: Green Capital Ltd.
Legal form: Limited liability company
Identification number: 402052372
Registration Number, Date: 09/06/2017
Registered Authority: LEPL National Agency of Public Registry
Legal address: Georgia, q.Tbilisi, Mtatsminda district, Al.Griboedov Street N30
Email: greencapitalmail@gmail.com
Director - 01024068034, Sandro Missea
Owner Part Share ruler 01017003835, Otar Urushadze 100%

Trademark: Caucasus Energy Ltd (Caucasus Energy Sapphire Ltd.)
Legal form: Limited liability company
Identification number: 402084775
Registration Number, Date: 27/04/2018
Registered Authority: LEPL National Agency of Public Registry
Legal address: Georgia, Tbilisi, Mtatsminda district, Al.Gribedov str., N 30
Email: Caucasusenergygysupply@gmail.com
Director - 01017003835, Otar Urushadze
Owner Part Share ruler: 402052372, limited liability company Green Capital 100%

Trademark: Stream Capital Ltd.
Legal form: Limited liability company
Identification number: 404538354
Registration Number, Date: 29/05/2017
Registered Authority: LEPL National Agency of Public Registry
Legal address: Georgia, Tbilisi, Old Tbilisi district, Alexander Griboedov str., ? 30
Email: streamgeorgialallc@gmail.com
Director - 01017003835, Otar Urushadze
Owner Part Share ruler 404506717, Stream Georgia Ltd 100%

Trademark: Stream Georgia Ltd.
Legal form: Limited liability company
Identification number: 404506717
Registration Number, Date: 14/01/2016
Registered Authority: LEPL National Agency of Public Registry
Legal address: Georgia, Tbilisi, Old Tbilisi district, Al.Griboedov St., ?30
Email: streamgeorgialallc@gmail.com
Director - 01017003835, Otar Urushadze
Owner Part Share ruler 01017003835, Otar Urushadze 100%

I posted at the end of October that only Frontera Resources Holdings LLC was active in Texas as the other four, namely Frontera Resources Corporation, Frontera Resources International LLC, Frontera Resources Ukraine LLC and Frontera Resources US LLC had forfeited their right to transact business in Texas due to unpaid Texas franchise tax. I have just checked their status and note that all five companies are listed as active so presumably the outstanding franchise taxes have been paid.

Mole, I notice the annual franchise tax report is due May 15. The Comptroller is required by law to forfeit a company's right to transact business in Texas if the company has not filed a franchise tax report or paid a franchise tax required under Chapter 171. The law also requires the Comptroller to give at least 45 days after the notice of pending forfeiture is mailed before the actual forfeiture. Any franchise tax deficiencies must be cured during that period to avoid the forfeiture of the right to transact business in Texas. If the corporate privileges are forfeited, the entity will be denied the right to sue or defend itself in a Texas court and each director or officer will be liable for the debt of the entity. See Texas Tax Code 171.255.
https://comptroller.texas.gov/taxes/franchise/coas-instructions.php

Earlier in the year I looked up the status of all 5 Texas entities and they were all active. I'm not exactly sure when this was but the file I copied it to was created on 26/05/2020. Assuming the tax was due on the 15th May and the 45 day notice was given, FRUS's Right to Transact Business in Texas may have been forfeited since the beginning of July.

Mole, I would be very surprised if the BoD were unaware of the forfeited status of FRUS but nothing can be taken for granted. However, FRUS can be reinstated as laid out here: https://comptroller.texas.gov/taxes/franchise/reinstate-terminate.php and there must be a good reason why the BoD has maintained FRH and paid its Texas franchise tax.

Cheers Mole for the info. With respect to FRUS's Right to Transact Business in Texas being forfeited, it refers to "File missing reports, information reports and/or payments" which links to https://comptroller.texas.gov/taxes/franchise/. It looks to me that FRUS, together with FRC, FRI and FRU have not paid their Texas franchise tax.

Mole, do you know when FRC Cayman was incorporated? My reason for asking is that FRC Delaware was identified in the 2005 placing prospectus at the head of the group structure: FRC Delaware > FIC Cayman > FCC Cayman > FRGC Cayman > 50% Operating Company Georgia. I assume the assets and shares were transferred to FRC Cayman from FRC Delaware at some point after 2005 when FRC Cayman was incorporated but I haven't been able to find any RNS with the information. I do not know if FRC Delaware is active, as I mentioned in my previous post today, but what if it is?

Bigun2, from my search into Frontera’s company structure, the only active entity is Frontera Resources Holdings LLC which was incorporated in Delaware on 25/07/2011 and registered in Texas a week later on 01/08/2011. The original Frontera Resources Corporation (2714496) was also incorporated in Delaware on 04/02/1997. It is still listed, see https://icis.corp.delaware.gov/Ecorp/EntitySearch/NameSearch.aspx but I can’t find out if it is still active. I consider it is significant that FRC was originally incorporated in Delaware and FRH in 2011 because of Delaware’s favourable tax laws that favour companies not doing business in the state. Also, there are tax Savings from using a Delaware corporation or Delaware LLC:
No state income tax for Delaware corporations that operate out of state
No business license required for Delaware corporations not operating in Delaware
No inheritance tax on stock held by non-residents of Delaware
No state sales tax on intangible personal property
Shares of stock owned by non-resident aliens are not subject to Delaware taxes

The licence was transferred under the Farmout Agreement of 13/04/2019 to FRUS Texas but it was not ratified by GG and GOGC. But the Right to Transact Business in Texas has been forfeited by FRUS and suggests FRUS is no longer active. In addition, the Farmout would appear to be invalid because clause 1.9 states the Farmout Area “shall mean the geographical area known as Block 12 as delineated in Exhibit 1 hereto and covered by the PSA”. Frontera has relinquished 99% of B12 so I assume that the original licence will need to be changed to accurately define the areas in B12 that Frontera can produce oil and gas. It is also reasonable to assume that Zaza has been in negotiations with GG regarding this and may well be trying to extend the licence beyond 2027. If so, as part of the restructuring, the BoD may take this opportunity to assign the new licence to FRH which would need to demonstrate it had the finances to carry restart and continue operations. Also, the PSA stated that FRUS shall pay to FRGC 5% royalty on all production from Block 12 for so long as FRUS is entitled to its sharing allocations provided in Article 7. As FRGC is to be liquidated, then it makes sense that another arrangement has to be put in place to deal with the Outrider debt. Zaza has indicated that the changes would increase the share of Outrider Management so instead of a 5% royalty maybe swapped for shares in the restructured company.

Mole, from https://comptroller.texas.gov/, FRUS (Texas) has forfeited its right to transact business in Texas which I think is due to missing reports and/or payments. I agree the 1,000 units shares owned by FRC need to be domiciled but the only Frontera company that is active in the USA is Frontera Resources Holdings LLC. If FRUS is no longer active then I cannot see how it can hold the assets from FRC. Hence my suggestion that FRH is the entity which is being used to restructure the company and hold the assets. I know the the Georgian Government did not ratify the farmout of April 13, 2019 and that it holds all the cards which is why I said to transfer the licence to FRH needs the agreement of GOGC and GG.

Cont..

I have no knowledge of corporate restructuring but it would seem reasonable to assume that when the Cayman companies are liquidated, the assets of FRC, FIC and FRGC have to be retained in order for FRR to continue business in Georgia. The key issues are what happens to the licence, the assets/companies in Georgia, shareholders and the debt. Zaza is reported to have said the change will not affect FEGL which will continue operating which means the 50% presently owned by FRC Cayman will need to be transferred to another Frontera company. From the information above, the only active company in Texas is FRH. FRH is shown to have 6 principals on record, namely Andrew J Szescila, Levan Bakhutashvili, Luis E Giusti, Stephen E Mcgregor, Steve Nicandros and Zaza Mamulaishvili but this may not be up-to-date. As a subsidiary of FRC, I’m wondering if SN and ZM are in the process of transferring everything into FRH. I assume it is relatively straight forward to move ownership of the Georgian assets and companies to a subsidiary but the licence transfer obviously needs the agreement of GOGC and GG. Perhaps this what Zaza has been referring to recently when he said restructuring is currently underway and the stakeholders are changing. When the dust settles and the restructuring is complete, we should see confirmation in an update to the Registry of entrepreneur and non-entrepreneur legal entities in Georgia. With regards to existing shareholders, we can only trust SN and ZM will restructure in such a way as to protect existing shareholders rights and assets (as they are substantial shareholders, it is in their interest to do so). As for the debt, Zaza has indicated that the changes would increase the share of Outrider Management in the company. Whether any arrangement with Outrider will swap debt for shares, it is clear that Frontera will require additional finance to restart operations and the restructuring will need to address this and it must present an attractive investment opportunity.

Just a small detail, the email addresses which have used the domain name, @fronteraresources.com, are probably defunct as I noticed in the PRNewswire 16/10/20 the email contact was info@frontera-resources.com. Following the shutting down of the website, it looks like Frontera has had to create a new domain name but appears to have retained their old fronteraresources.com as it is unavailable.

As translations 33 and 34 mention that restructuring is currently underway and the stakeholders are changing, I’ve had a look at the complex company structure to see if there’s a clue what could be happening behind the scenes to reorganise Frontera following the liquidation the Cayman registered companies, namely:
Frontera Resources Corporation (FRC, Incorporation Number 256380)
Frontera International Corporation (FIC, IN 71338)
Frontera Resources Caucasus Corporation (FRCC, IN 97554)
Frontera Resources Georgia Corporation (FRGC, IN 72227)
Frontera Resources Overseas Corporation (FROC)
There were two other FRC Cayman subsidiaries which I understand were dissolved when Frontera withdrew from Azerbaijan:
Frontera Resources Azerbaijan Corporation (FRAC)
Frontera Azerbaijan Ventures Corporation (FAVC)

There are 4 Frontera companies registered in Georgia (Zaza is the Director of all four):
LLC Frontera Resources Georgia (FRG, 203853473)
Frontera Resources Georgia Corporation (FRGC, 204931431)
Frontera Eastern Georgia Ltd (FEGL, 204905674)
Frontera Resources US LLC (FRUS, number 405339637).

FRG is owned by FIC. FRGC is owned by FRGC Cayman. FEGL has shared ownership, 50% FRGC Cayman and 50% Georgian Oil and Gas Corporation (GOGC, 206237491). FRUS is owned by Frontera Resources US LLC (Texas, File Number 802558654).

There are 7 Frontera registered companies in the USA:
Frontera Resources Corporation (FRC, FN 0011520006, Formed in Cayman Islands)
Frontera Resources Corporation (FRC, FN 2714496 Formed in Delaware)
Frontera Resources International LLC (FN 0802247983, Formed in Texas)
Frontera Resources Ukraine LLC (FN 0802275570, Formed in Texas)
Frontera Resources US LLC (FN 0802558654, Formed in Texas)
Frontera Resources Holdings LLC (FRH, FN 0801460203, Formed in Texas)
Frontera Resources Holdings, LLC (FRH, FN 5015274, Formed in Delaware)

FRC 2714496 was incorporated/formed in Delaware 04/02/1997; I understand it to be the legacy company.
FRC 0011520006 Cayman was registered in Texas 08/05/1997.
The FRH companies in Delaware and Texas are one and the same.
According to https://comptroller.texas.gov/, only Frontera Resources Holdings (FRH) is active as the right to transact business in Texas has been forfeited by the rest; FRH is a subsidiary of FRC.

In the UK, Frontera International Corporation (company number FC022206) is listed as active but it failed to file a Transitional Return and the establishment was regarded as being closed on 25/02/2013.

TBC..

Mole, you say "with a faint glimmer of hope that they have friends who will bail them out". Have you seen my posts last night at 23:32 regarding Rusmetali? Rusmetali probably does not have the financial clout on their own to offer a rescue package but they are an established Georgian company with mining, ferro-alloy manufacturing and a hydroelectric project. With Zaza owning 39%, I'd put Rusmetali in the "friends" category.

Part 2

Rusmetali is a partner of the Infrastructure Development and Construction Company, established in July 2013. The company conducts construction and rehabilitation works on infrastructure facilities (gas pipelines, power dams, tunnels, etc.). across Georgia (http://www.en.idcc.ge/partners). IDCC is performing concrete lining works in the derivation tunnel of Lukhuni II HPP at village Uravi (http://www.en.idcc.ge/projects/51-lukhuni-ii-hpp-ambrolauri.html).

Because Rusmetali is a private limited company, I can’t find any financial information so there’s no way to know how deep its pockets are. Could Rusmetali be involved in any deal? B-2-0 says that Zaza resigned from politically and case sensitive Georgian entities to facilitate deal. It is a very plausible explanation (I hope so) and It would be a very good reason why Zaza has left the scene as I find it hard to believe that he is not fighting in the background to protect his substantial FRR investment in time, effort and money. Just a fanciful thought, would there be a conflict of interest for Zaza if he was a director of FRR and a 39% owner of Rusmetal?

Zaza has other substantial interests in Georgia. On 30/05/2012, Zaza bought a 39% share in Rusmetali Ltd for 4285 GEL from Bidzina Mindeli who owned 100%. A 52% share was also bought by Mindia Mindeli for 5714 GEL leaving Bidzina Mindeli with 9% of the company. Sometime later Geronti Tsvariani and Temur Miminoshvili acquired 2% and 4% respectively from Bidzina Mindeli leaving him with 3%, see: https://www.companyinfo.ge/en/corporations/403657. As 100% of the shares are held by 5 people, this is a private limited company and it doesn’t have a website, just an address at Mari Channel N174, Rustavi, Georgia, and an email address, office@rusmetali.com.

Rusmetali (ID No. 216406306) was formed in 21/03/2005 and the last entry in the Public Registry was dated 02/03/2020, look-up here: https://enreg.reestri.gov.ge/main.php?m=new_index&l=en
https://www.linkedin.com/company/rusmetali-ltd. The main activity of Rusmetali is Ferro-alloys manufacturing and has ability to produce Ferrosilicon manganese, Ferrosilicon, Ferromanganese, and Ferrochrome (https://3946-ge.all.biz/). It owns the license for several manganese ore mines in Terdjola region and exports throughout the world with main markets in North and South America, Western and Eastern Europe (https://www.gmdu.net/corp-577960.html) I can’t find any recent info, but here’s a video from 4 years ago: https://vimeo.com/153912401

In addition, Rusmetali is involved in Georgia’s hydroelectric projects Lukhuni 1 and 2 HPP: (https://www.ebrd.com/english/pages/project/eia/42801.pdf) (http://www.hydropower.ge/user_upload/New_Hydro_Power_Plants_2013-2014_MoE.pdf). Rusmetali signed a MOU with the Government of Georgia in 27/07/2009, http://www.greenalt.org/webmill/data/file/rusmetali.pdf. According to http://energy.gov.ge/projects/pdf/pages/Ongoing%20Investment%20Projects%201810%20eng.pdf and https://geenergyweek.com/wp-content/uploads/2019/11/Hydropower.pdf, the planned Lukhuni 1 has not progressed, possibly because of the Environmental and Social Impact (https://api.commissiemer.nl/docs/mer/diversen/os24-b017ar-khudoni.pdf). However, the TBC Bank, the European Bank for Reconstruction and Development (EBRD) and the European Union (EU) provided a financial package of US$ 14.3 million in January 2017 for the construction of Lukhuni 2 HPP to the Rustavi Group LLC will be ultimately owned by Rusmetali Ltd (51%) and JSC Partnership Fund (49%), an investment fund registered in Georgia (https://www.ebrd.com/news/2017/full-steam-ahead-for-renewables-in-georgia-.html).

What’s the risk and reward in sending the letter to a reporter? The risk, and I consider it to be a big risk, is that it will undermine Zaza and the BoD at a time when the future of the company is on the line. For certain, it provides ammunition for FRR’s detractors in Georgia to further criticise the company on the way it does business and it will not help FRR attract partners and finance. As for the reward, assuming the letter will spur Zaza to communicate with shareholders, the best we can expect (IMO) is an apology for the lack of communication and a message that he and the BoD are doing all they can to secure FRR’s future and he will contact shareholders in due course when and if a deal is secured.
As much as I am frustrated and disappointed that Zaza has ignored shareholders, I am convinced he is fighting tooth and nail for our (and his) investment. I do not think the risk is worth the reward because the letter won’t help to secure a future for FRR. All it can do is satisfy the need for shareholders to be informed which I do believe to be of prime importance for a company’s BoD under normal circumstances but we are in exceptional circumstances. I have no idea why Zaza has decided to cut communications with shareholders but I have to assume he has valid reasons for his course of action. I certainly am not making any excuses for the way Zaza and the BoD has treated shareholders but I am resigned to the situation and retain the hope (however small) that FRR will survive and our investments (and patience) will be rewarded.