Frontera Share Discussion Threads

[loglorry1] 05/2/2018 12:39

WHI notes, investor meetings, oil conferences, overruns at UD2, late drilling at Tarabani. High cash burn.

PLACING AHOY!!!

[loglorry1] 05/2/2018 10:45

@nobull I think Nicandros and Zaza recover money from their equity stakes via salaries, and other methods. N and Z have probably taken far more out of FRR over the years than they have ever invested as hard $$ into the equity.

[nobull] 05/2/2018 10:39

Tickboo, FRR uses a similar strategy to CDU (Cudeco), a ccpper development project in Queensland that was always on the cusp of fantastic riches, but there was always one more thing they had to raise money for: shareholders in that company could never get a complete picture of what needed to be done to go from being a cash guzzler to a cash gusher. I am confident I won't be needing to send you £200. Good luck with FRR.

I think it should be a rule never to buy into a company that doesn't use the right type of finance for the job. Debt is for financing assets that are going to be in good working order and fully employed for the life of the debt, and for assets that you can be certain will generate a better return on equity than that which you would get if the debt was replaced with equity.

Did anyone ask any questions about their financial strategy?

The only mystery is how Mr Niccandros and Zaza will recover value from their equity stakes? I wonder if they get a separate salary from the Georgian Govt. or from the State Department (out of its overseas aid budget). The exploration work has to be done; the trick is to make sure the unsuccessful drill costs are borne by anybody but Nicandros, Zaxa and the Georgian Govt. Just my view.

[loglorry1] 05/2/2018 08:46

JakNife the current bull thesis is that they are drilling deeper and now have Dustin who knows how to frack and complete wells better. If things work out they might even sell $2m worth of oil each year. Not that things have ever worked out for FRR and even if they did $2m is a drop in the ocean and won't even service the debt.

[loglorry1] 05/2/2018 07:39

tickboo I think you need to look carefully at what N&S say exactly and understand what prospective resources are. As Bumpa says they were given the data from FRR and paid by FRR. They are basically saying that from the data they have there MAY be these kinds of resources but its still prospective e.g. until it is explored they don't know.

Given FRR have spent $400m and 12 years exploring them it is pretty clear that these prospective resources are not going to ever turn out to be worth anything.

Zaza's use of language implies that these resources will are commercial but nothing so far in the way of production has ever supported this claim.

[bumpa33] 05/2/2018 07:31

i apologise for the use of language last night.


it was far too understated.




TRIN announce prod update today 2777 Bopd for the third quarter. Mkt cap £49m.


Just for a little sense of perspective on this overpriced, overhyped confetti pumping POS.

[tickboo] 05/2/2018 00:43

No need to apologise, it's your opinion.

[bumpa33] 05/2/2018 00:14

DOW futures off another 260 points at the mo, let's see what this week brings.

[nobull] 05/2/2018 00:02

"The assets are worthless? Odd."

They are now. Of course FRR want you to think they won't be in the future. That is how share selling businesses work. If T-45 is producing 300 bopd by the end of Q1 2018 (on a sustainable basis e.g. for a few years), I'll send you £200.

Drills are 'simple' before the new shares are issued, but after the shares are issued they involve changes of plans, delays, or just don't occur (afterwards, whatever the reason is, the RNS will be long - with share selling businesses, you just get a lot of words back - the one thing you do not get is oil or gas; just excuses that will enable you to be even richer than you thought you would be if they had achieved the original target). What else do you expect from a company that persistently rips off its long term shareholders?

"It is the intention that Zones 9, 14 and 15 of the Eldari reservoir will be stimulated and produced together."

The way the word "produced" is used above is probably different from the meaning most people imagine it to mean. I doubt it means "to produce sustainable commercial production starting from the end of Q1".

My guess is it means, if T45 is successful, that they will need to do another 5 years' drilling work on Taribani to optimise the recovery design, and that T45 is just one of a hundred appraisal wells that need to be drilled, and that the cost of doing the other 99 appraisal wells will be $400m...

[bumpa33] 04/2/2018 23:48

read the sodding report and read the caveats from NS&A

[tickboo] 04/2/2018 23:44

So an independent report is solely based on internal data that isn't corroborated? Why pay for a competent persons report then? In actual fact FRR believe they have a lot more. Of course they do!

[bumpa33] 04/2/2018 23:20

"seems to be a simple drill"...


that's really pretty funny.

[bumpa33] 04/2/2018 23:18

tickboo - how many times has it been pointed out to you that FRR provided the bloody data that the NS&A report is based on?

[tickboo] 04/2/2018 22:49

The assets are worthless? Odd. NS&A think otherwise. If by the end of Q1 FRR is not producing 300bopd from T-45 it's the same old from FRR but given it seems to be a simple drill I expect them to exceed that. Not long to wait and we should know in 2 weeks or so.

[nobull] 04/2/2018 22:26

Loglorry,

"The assets are worthless." Agreed.

The debt helped destroy shareholder value and to enrich Nicandros and Zaza.


Nothing has changed my long held view about this company being anything but a share selling business masquerading as bona fide oil and gas explorer developer.


The latest set of RNSs seems to have a pattern of hint at great balance sheet transformational possibilities, issue shares, then issue a whole load of RNSs with ridiculously detailed explanations of why the original balance sheet transformational event won't happen any time soon.

I can't tell whether the testing is going to generate revenue on a permanent basis. What I probably read carelessly as "possible commercial production on the horizon" is probably pilot testing that means they need another $400m expenditure to get to commercial production.

I can't understand why they are drilling after the exploration licenses have expired unless it is as a favour to the Georgian Govt. i.e. not for our benefit.

[bumpa33] 04/2/2018 21:28

really interesting article, this one....


...with the bond sell off and rising yields finally starting to look bad for stocks.

[bumpa33] 04/2/2018 12:20

sorry log, I always get a bit excited when volatility rears it’s ugly head.

can’t help but think at some point the huge credit generation since ‘09 (and the read through ‘leverage̵7;) will set off - and exacerbate - a once in a lifetime market event that’ll go down - quite literally - in history.

Anyway, back to the buy, buy, buy mantra.


apart from IQE Monday morning...!

[loglorry1] 04/2/2018 11:43

Bumps stop trying to turn this board into a place where professionals hang out. Whoop whoop buy the dips. Ahhh that's better.