Share Name Share Symbol Market Type Share ISIN Share Description
Frontera Resources Corporation LSE:FRR London Ordinary Share KYG368131069 ORD SHS USD0.00004 (DI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.02p +6.78% 0.315p 0.31p 0.32p 0.32p 0.29p 0.295p 85,905,427 16:25:55
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 2.5 -13.9 -0.7 - 26.30

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Date Time Title Posts
21/5/201717:42FRONTERA AND BEYOND5,134
17/3/201612:10The Simon Cawkwell FRR Ј20 a share thread15
14/7/201514:10Frontera - troll-free thread16,583
20/11/201315:00Frontera Resources Plc - Potential Caspian Giant1,611
18/1/201222:31Frontera Resources - Marching Through Georgia72

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Frontera Daily Update: Frontera Resources Corporation is listed in the Oil & Gas Producers sector of the London Stock Exchange with ticker FRR. The last closing price for Frontera was 0.30p.
Frontera Resources Corporation has a 4 week average price of 0.28p and a 12 week average price of 0.19p.
The 1 year high share price is 0.49p while the 1 year low share price is currently 0.04p.
There are currently 8,350,082,209 shares in issue and the average daily traded volume is 110,532,053 shares. The market capitalisation of Frontera Resources Corporation is £26,302,758.96.
tickboo: We'll agree to disagree on the questions then. If they wanted to take it private they would not have suggested a 1p conversion but a smaller premium on the battered share price. I would imagine once everything is in place and commerciality is declared the production licence will indeed be extended. The Georgians accession to the EU Energy Community and the fact they want to be seen to be business and foreign investment friendly tells me they'll want to give the right impression.I believe the issue with gas sales is the cost recovery pool. Oil and included but gas isn't so clear in the PSA hence the disagreement and the MOE's discouraging FRR's gas sales. There should have been a question on that and whether agreement is any nearer. Tuesday should be interesting.
wshak: 1. There are a lot of "estimates" and "intentions" in today's RNS regarding the price at which money might be raised. The reality is that the only non-related party finance ACTUALLY raised has been $700,000 short term in exchange for 323m shares. That puts a hard price of 0.167p per share at a GBP/USD exchange rate of 1.30 - quite a discount to the current share price of 0.32p. 2. A new death spiral financing facility has been put in place in favour of YA. I am unclear where the $6.2m debt to YA has come from as they are normally issued shares as soon as they hand over cash. 3. Vendor debt of $8m has also appeared from nowhere, also to be paid in shares, and the shares will be surely sold on issue to recover costs. 4. The related party debt/equity swap is at a nominal 1p/share but it never had any hope of being paid off - the debt has ballooned in recent years due to an incredible 15% compound interest rate - that amount of money was never put into the company by the related parties. Yes, it is a debt owed, but the all of that cash was never received. 5. Previous RNSs stated that the drilling campaign was stopped to allow a JV to proceed. There is no JV or Farmout and it is now clear that the company had no funds to explore further. 6. The share count is about to be doubled once more to approx 17b shares. FRR isn't going to have a great balance sheet at the end of this rinse - the shares are being mostly issued to settle debts. 7. Once the new shares are in issue, the current market cap. will be £50m. For what, exactly? It'll be interesting to see where all this new debt has come from, as it suggests huge cash burn that has not previously been disclosed. I have kept things relatively simple, but I believe these points are worth consideration.
contra: For those of you who don't do any research, quite a few judging by the posts, There is about to be a JV/buyout. Listen to the conference call a recording of which is now on the FRR website. FRR has discovered huge reserves of gas and oil, on shore, and next to oil and gas pipelines built by and under construction by BP. There is only a small window of opportunity to buy in before the AGM/JV/Buy out is formally announced. Who knows where the share price will be then.
nobull: Tickboo, hi. "a lot of it will be commercial" Yes, but it won't be commercial within the timescales we need it to be. It will be commercial for somebody else. Resources without the paperwork in place have no monetary value whatsoever. The license expiry creates an opportunity for someone else to collect an economic rent (a profit from privilege rather than one from risk taking). The share price has already discounted that Nicandros is a clown (despite the recent 100%+ rise). The share price only cares about how close we are to commercial production. The substitutions of a load of Moldova resources known with less confidence than the Georgian lot we are about to lose (through license expiry) puts us further back from production.
nobull: Carbon man, the only thing on repeat here is the long term share price downtrend. £1.50 to £0.0018. I think it is helpful to distinguish between share selling 'businesses' and oil and gas explorers and developers; this is the former that spins itself as the latter. What makes you think 2,200 bopd commercial production is ever going to be achieved while you and I are shareholders? A sensible profit maximiser would bid £0.005p, take the company private and leave long term shareholders with mega losses. Only then would 2,200 bopd be achieved! This company has been promising all sorts of wonders since it first listed 10 or 12 years ago. I think you need a brain transplant to believe anything it says. The inability to do proper shareholder Q&A says a lot about the BOD. All the past exploration expenditure that has not led to commercial production will shortly become wasted expenditure (expiration of exploration license?). The share price of course has already discounted that. Best of luck with your latest purchase. Wave carrot, sell new shares, publish long RNS about non-availability of carrot, wave new carrot...
h2owater: LSE bb:highlander1970 448 posts$3m per month, $36m per yearI went through all the PSA figures at the beginning of Feb during a discussion over on iii My post from that time was this: "if we can get the confirmation of the 2200 bpd that would be a good start. FRR costs of production are $6.25 and our crude is sold at Brent pricing base so with Brent pricing having been around the $55 average this month we should be looking at $48.75/barrel net to FRR so at 200 bpd = $9750/day or $292500/month at 1500/day = $73125/day or $2,193750/month (my opinion is that this is the level we are at just now or thereabouts and would have us in profit) at 2200/day = $107250/day or $3,217500/month which is where SN alludes a target if we exceed which is possible if FRAC completions work well at 2500/day = $121875/day or $3,656250/month at 3000/day = $146250/day or $4,387500/month all these figures above are pure profit after production costs, obviously there is admin costs etc after this but is based on $55 Brent which is currently above $56 FRR have a CPR defining 117M barrels reserves which, based on other deals in the past would give a sale figure at say $13/barrel for reserves (OIP is generally around $1 - $1.5 for valuation purposes) gives a valuation of $1.52 Billion which would give us a share price of 16p. This is what is actually proven and we have been told about! If the 5.3TCF is proven then grab a calculator and giggle! There is absolutely no assets priced into the MCAP of this company and we are priced at failure yet, if we believe SN, we are due $5M rebate from Georgian Govt and we are going to massively up our production from current low figures but he needs to get some new pumps to do it which are delayed for whatever reason. This is not ramping but highlighting what we do actually know as of now and what we have been told what we are waiting for."
nobull: A Dilutionary Tale... A loss making company with 18 bn barrels of oil in place, near Tibilisi, Had an unaccountable CEO who financed the company with debt to charge his shareholders to bet (the negative equity) He drilled as slowly as he could (increasing the debt), claiming he needed to do everything by the book (a Georgian ruling) and when oil prices fell, he profited from the rising finance charges and and converted his debt into shares, at a price of his choosing. When finally he started to produce, and oil prices rose, shareholders found no longer was it theirs but that of CEO Stevie. A Dilutionary Tale. Copyright Nobull April 2015 Whether the above portrays our company accurately or not is a moot point. It may not be right in every detail , but it is possible it is has grain of truth about what is really going on in our company. Now you might say who but a fool would invest in such a company? First, there was the £1.50 to 1p share price graph, with the downward trend strong in the months around the time the CEO converted his debt into shares, and falling share prices often attract the ‘reversion to mean’ bottom fishers. The mistake they make is not to realise each year they buy an FRR share, while the share has the same name and par value, the underlying entitlement to profit participation in Block 12 dwindles, making the lower cost shares no better value for money. The technical term is dilution. Second, there are the ‘ten-bag rerate on a change from cash guzzler to cash gusher’ believers who don’t realise the CEO is already rich and is happy to get rich slowly by compounding his more certain 15% returns on the debt (compared with the less certain but potentially larger irregular returns from oil exploration), a 15% rate of return for which he needs to supply a service, with his loaned capital: allowing shareholders to bet with it on exploration/challenging oil field development outcomes (Mirzaani 5 years of fraccing intentions but no change in Mirzaani production levels). Third, there are ‘the CPR is my saviour’ brigade. Their mistake is that he hardly ever does CPRs (2 in 8 years), and they don’t bring in the cash to get rid of the debt (the last one did not), and the CEO chooses the timing of when any money comes in from a farm-in or sale of a fixed asset so that enables him to manipulate the strength of the debt holders’ bargaining power to obtain a satisfactory conversion price into equity that suits himself. Fourth, some people confuse 18 billion barrels of prospective resources with a physical quantity of oil that can’t just be sucked out of the ground not realising the oil has not even been found yet, and that when it is found there is no guarantee it will be economic to extract, a risky activity which could involve throwing a lot of money away to get nothing back at all. (Prospective resources are hardly an asset in the short term, and not when the exploration license is short). Fifth, the CEO may get help from particular shareholders (Outrider Management) in manipulating the price. The latter may have a fuller kit of betting tools (RPNs, CLNs, Equity purchases through placings and equity purchases in the secondary market; we only have one betting tool, buying shares in the secondary market). These institutional shareholders are specialists in extracting value from consensual restructurings such as profiting from changing the terms of conversion. (They maybe have the same goals as the CEO – to get richer slowly, but certainly). The CEO may get help from the Georgian Govt. with creating delays – we never had an explanation for the gas permit delays, and we don’t know if the Georgian Govt., or if people connected to it, are holders of some of the other debt instruments. Sixth, the CEO made his equity stake public (which makes some people think this is a safe bet) but kept his much larger debt stake more hidden. Related party transactions are in the accounts, which he published only at the last possible minute, when he was forced to by the listing rules. AIM listing rules and Cayman/UK/Delaware Company Law do not require the identities of the debt holders to be revealed other than as the quantity owned by related parties in the annual accounts. While there are rules to compel disclosure of director dealings in shares, there are none for director purchases of the company’s debt. Material changes in debt levels do not need to be RNSed. Seventh, the institutions were under no obligation to obey the notifiable interest rules – they were overseas distressed debt trading /restructuring specialists who profit from small shareholders’ ignorance of the technical matters like inducement charges and adjustment of the conversion terms, and they understand the importance of a business model where the value creation, if there is any, comes in lumps under the control of the CEO, so that the conversion price can be better manipulated to suit their interests. Eighth, slacking companies are more difficult to detect on AIM without the discipline of quarterly reporting like companies listed on the ASX have to suffer – lifestyle companies get outed quicker there. We won’t necessarily know until 30/9/15 whether a paid-for Varang rig is on site at Taribani (by then it will be too late to change the likely size of the finance charges we are faced with next year). There is no requirement on AIM to report underdelivery on a prior stated target or intention, and the latter can be stated ad nauseam to get the share price up ahead of placings. (The Taribani 8-well work-over program might be just an intention that never happens– there was no picture of the company owned fraccing fleet). Slackers loaded with debt should have a share price chart like we have. Ninth, people with high entry prices are easier to fool with ‘overpromise underdeliver’ because they want to believe. They tend to hang on, hoping for improvement. Tenth, there is a category of people who haven’t mastered what has taken me most of my life to master: money goes to those who don’t need it and secondly, if you can see a ten bagger, then someone richer than you will find a way to get your shares off you legally, giving you a two bagger, while they go on to get a five bagger with them (Low ball all cash offers by a cornerstone investor). The believers in “Steve will have a coherent plan”, “Steve is in it for the long term”, “Steve loves us”, etc. may be living a delusion. Steve is probably only listed here to get placings away to pay his salary and to create a business that will be worth having in the future, but the point at which the business is worth having is may be the point at which we will wake up and find we own very little, at least if the way it is being run now continues. Capitalism. Animal spirits. Money doesn’t grow on trees. You don’t get paid for research (no need to worry you’ve discovered 18 bn barrels oil, and that nobody else knows that FRR has it) – you get paid, if at all, for risk taking. The fact some people don’t understand the risks they are taking may give them the illusion that money really does grow on trees. Respect for long term FRR shareholders is paying back the debt from cash generated from operations, stopping the dilution, making sure Steve does not adjust the terms of conversion UNDER ANY CIRCUMSTANCES, and if that means making hard decisions about losing exploration licenses, then so be it – I do not understand why our gas revenue money should be used for high risk exploration if no farm-in partners are interested, especially when using the gas revenue enables our BOD to compound its returns at 15% p.a. risk free and then to dilute us out of existence (we will own 50% less of Block 12 next year if the share price flat lines at 1p, because that will create an inducement charge of $28.244m). I hope more substantial shareholders will call an EGM to get answers out of our CEO if he doesn’t start managing the dilution risk and the finance-cost blow-out risk appropriately, and that means talking about it in RNSs. And if respect for long term shareholders creates a short term 8 bagger, then that is not my fault. For the record, I have fallen into categories 1, 2 and 9. (Category 1 more for not appreciating the dilutive effect of the high finance charges rather than for believing in reversion to mean – the latter investment strategy is more suitable for producers over the economic cycle whereas this is a development play i.e. category 2).
nobull: Dalesman, hi Thanks for your thorough analysis of management and the "oil and gas" aspect of the business. I do not have enough oil and gas investing experience to understand the effect of the forthcoming CPR i.e. whether it is a game changer or not, although of course I probably understand the difference between the various SPE classifications. I do not see how the CPR can add equity to the balance sheet without a sale. A few points to consider that are not covered by your analysis, in no order of importance but just off the top of my head: 1. If you go back a few years, there have been other missed targets. It is always difficult reading history backwards as one can impute all kinds of discreditable motives to the management especially if they made promises that weren't delivered on and if they happened to have capital raisings after the promises but before the outcome of the promises were known, but various respected posters here over the years have talked about a persistent "over promise and under deliver" problem (Atlantic, ngms27/killerdriller, Spp119, MichaelsADVFN). However, if we are about to have $21.5m gas sales 'switched on' in the next few months, you shouldn't be concerned about that. (7 mmcfpd pipe capacity was mentioned in the last operational update, but of course you know that is different from having sales of gas equal to that daily capacity. 2. The recent director purchases are peanuts (They could be "hello, I am loyal to the CEO, and I want a job in FRR NewCo" purchases, although Mr. McGregor signalled the time to sell right). Yes, the BOD has a lot of skin in the game; however, it also has a big interest in the debt (both the Related Party Notes that pay a 15% coupon and also in the Convertible Loan Notes that have a cost that is open ended - that is, there is a potential for an utterly massive finance-cost blow-out in July 2016 that can dilute us to oblivion - transfer all the reward to the debt owners despite us having taken all the risk), and the value of BOD's stakes (both in the debt and equity) is about the same, at the current share price, so the BOD has hedged its bets, although as the share price rises, the BOD will have greater incentive to work for the shareholders rather than the debt holders. If you think I am talking twaddle, just look at the last $100m inducement charge. That was a finance-cost blow-out due to the share price not being anywhere near the conversion price and the shareholders having to give up an utterly massive stake in Block 12 to the debt owners to persuade them not to ask to be repaid in cash, a payment that was made instead in the form of a "soon to be worth 20 times more" stake in Block 12. That is despicable. That is shareholder value destruction on a massive scale - why else is there no share price graph on the FRR web site? £1.50 to £0.008p is not pretty. 3. If the BOD can't call us "co owners" of the business in its communications, and if they can't feel able to hold a meeting in London and answer questions about the business and financing model, then you have to wonder if the game plan is to use us to dump all the risk on and use debt to remove all the reward, which they succesfully did in the last 'restructuring'/BOD debt holder enrichment exercise. 4. The prospective resource figures you refer to are totally meaningless without looking at how long our production license is for. We are in a restaurant where you can eat all you want in 30 minutes: that is the type of production license we have. Anything we can't eat in 30 minutes reverts to the ownership of the restaurant. Some shareholders (ones with low average entry prices and in some cases ones with excessive amounts of shares in relation to their ability to comprehend the risks they are taking) want our BOD wrapped up in cotton wool and protected from having shareholders kick the tyres to check out the business model. We get no comment from the BOD about whether we are selling gas at a discount to the world price (subsidising the Georgian population). Such things as the size of the reversion windfall, the amount of subsidy we provide, how the spoils of exploration success are to be divided between the Georgian Govt., the Georgian population, the equity holders, the debt owners, and the BOD, through its salaries) need to be discussed in a civilised, business-like manner at a meeting in London, face to face, without Liz Williamson (the vice president of investor relations) selecting less challenging questions, as happened through a previous webcast agm to pass through to the BOD. Some shareholders believe this is all miles too commercially sensitive, and we should be satisfied with being dummies because Steve is our Saviour who will dispense sweeties at the right moment. For the record, I have a 95% loss on my shareholding here, and its now a tiny holding. I am in favour of sacking the CEO if we don't have a statement of "We are on course for $21.5m gas sales in the next 12 months" by 31/3/15. The share price is a good indicator of the likely cost of any new, replacement longer maturity debt. We need the share price to be 17p before July 2016 to be sure we will not suffer another finance-cost blow-out that dilutes us out of existence. 4p by 31/12/15 seems a reasonable target. Yes, I know that is a 5 bagger. So what? AVM would be a 40 bagger if the gold price returned to $1829 per oz. Good luck whatever you choose to do.
nobull: Joeyboy128, thanks, but of course I still own my stock, so it doesn't please me to see the FRR share price going down, although I see its descent, in the absence of answers from FRR, is totally justified.
nobull: The Skipper, many thanks for that. It doesn't make much difference whether I vote in favour or not (holding too small). I do see from your answer that it is in my interests to vote "yes", and that it is unreasonable not to, but it is also unreasonable to let FRR work at a snail's pace and pretend that our cost of capital doesn’t matter (it never discusses this) (current liabilities exceeding current assets wasn't my main concern, the topic the Nomad assured you about? – I just assumed, unwisely perhaps, that our BOD would issue itself a load more 15% interest bearing RPNs to pay for ones maturing about now). My concern is the HIGH COST OF CAPITAL (particularly those convertibles), because if you don’t have cheap finance, you have less chance of ever being a viable business, and a greater concern is the fact that the BOD doesn’t appear to be in the least bit concerned about this at all. If the BOD have a sure fire plan, with detailed steps I can put ticks against, to get the cost of capital down, then why not tell me what it is? Having blind faith last time in Mirzaani riding to the rescue to save us from that sky high $100m inducement charge was a mistake. I don’t want to be in that position again just listening to a load of tosh that Mirzaaani will flow at 300 bopd, that gas sales will rise and that Varang will create new revenue streams, and then for all these things to happen too late and then get finished off with another inducement charge, and then just be told they did their best. The time to demand better performance is now, before it is too late. An example of a company that communicates well is AVM. Dire host country (Burkina Faso is less safe than Georgia?), balance sheet is terrible (going conecern worries, priced to go bust, high cost producer, loads of debt, and vulture funds owning some of its debt e.g. Elliot Partners, the hold-outs who are trying to screw Argentina), a market cap. that is half FRR’s, and AVM is a 40 bagger if gold were to return to $1829 per oz.) and AVM’s balance sheet now is where FRR’s will be in 6 month’s time if FRR does not work faster, and yet AVM manages to answer questions in regular analysts’ conference calls. So why can’t FRR? If you want to be taken seriously, you answer investors’ concerns (whether they are justified or not, as long as they are genuine concerns). Of course there are many ways to answer them: an elegant way is just to get the FRR share price up! Mr Nicandros’ equity stake is then more valuable than his debt stake, and then we know he is working for us. Just my view. Verdict: FRR can do better – still thinking of voting “no” even though that is a stupid course of action. I look forward to the next operations update answering my concerns, and it coming out before I have to vote. P.S. Many thanks again for all the hard work you have done.
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