Menu
Close

Legal Developments in the US

lse:frr

#61

MP on LSE

Why nowToday 15:38
IMHO it is because the court cases in NY and Texas are very close to a favourable conclusion and the arbitration just needs the change from a 5 year to a 50 year licence extension. This was reliant on the return of the 5% RA, but due to the wait the pro-Russia Dream Party has been posturing, plus there was even a cyber attack on Georgia. Now that everything is coming to a head the US is strongly advising Georgia to stick with the original agreement.


#62

Latest article here - dated today:

https://translate.google.co.uk/translate?hl=en&sl=ka&u=https://bm.ge/ka/article/frontera-saqartvelosgan--35-mlrd-is-kompensacias-itxovs---yvelaferi-davis-shesaxeb/47269&prev=search

So the letter from our Congressman has certainly upped the anti re coverage and comment - much of it a repeat of what we already knew. The writer clearly has access to the GOGC top team though - and a couple of important observations:

  • The GOGC contact has said they are awaiting the outcome and will abide by the decisions. So the process is clearly at the end stage and the decision is I believe binding (as has been pointed out elsewhere I do not believe any appeal can be made against such decisions)
  • Ignore stuff like the $3.5 billion claim. All parties will have laid out their most extreme positions, but will also have indicated other positions that will be viewed as more reasonable
  • Interesting that GOGC had made an “offer” and this was rejected by Frontera. Don’t know when and what - but the Court will be certainly aware of the detail. Those who were at a Zaza meeting in - I think - 2018 will recall that he talked about the right within the contract to extend the duration on proven production. I would bet the issue is the definitions here in terms of both duration and location extent within Block 12 - and that any third party involvement is in turn again dependent on the outcome

If I didn’t have so much at stake I would describe this as a pretty fascinating saga - but I do sense there is much still to play for here. Lets hope we hear soon and that there is at least some basis to progress from.


#63

Absolutely fascinating stuff. Well done to all.

However I would just sound one note of caution on the arbitration decision being binding. I was a shareholder in Oxus Gold when their two gold mines in Uzbekistan were seized by the ultra corrupt government of that country. The decision went against them (I think on a 2-1 decision) under the UNCITRAL provisions in Paris. The company appointed litigation funders to pursue an appeal for them - which sadly did not end well for its shareholders, so I am not counting any chickens just yet, but the comment that the Georgian side have said they will accept the outcome is very encouraging, and the clock is ticking down…


#64

A post from Jiff just now on LSE:

Link below, on mobile earlier this morning. Similar content, states Frontera turned down an offer at some point. Hopefully a sign that an agreement will be reached between the parties. somewhere between the offer and what Frontera are looking for. which is a positive for me. GLA

Quote: However, a corporation spokesman said the corporation offered Frontera" a settlement, but the company declined the offer.

20.ianvari .2020 13:36
FRONTERA DEMANDS $ 3.5 BILLION IN COMPENSATION FROM GEORGIA - ALL ABOUT THE DISPUTE

Today the Georgian Oil and Gas Corporation (GOGC) is involved in an arbitration dispute - the American energy company Frontera is seeking $ 3.5 billion in compensation from the oil and gas corporation.

Frontera came to Georgia in 1997. In 1997, the Company signed a petroleum exploration and exploration work with the Ministry of Energy of Georgia on the XII License Block in Eastern Georgia.

More specifically, Frontera’s extraction infrastructure is located in the Taribani Valley, in Marechevi and in the village of Mirzaani (outer Kakheti). The company has several wells at each point. In addition to Georgia, the company also operates in Moldova. Frontera

The contract between the state and the private company contains a record of the Profit Sharing Agreement, which makes Frontera liable to the State.

Under Shevardnadze’s name, there is a contract with Frontera - a contract for equity distribution and a study of a refinery - indicating that the company had previously discussed the construction of an oil refinery in Georgia. The document itself is a commercial secret and is not public.

To date, local natural gas and oil production in Georgia accounts for less than 1% of total energy consumption, which is due to the lack of adequate supplies and / or failure to date.

Frontera made the loudest announcement in Georgia on February 1, 2016. Frontera CEO Steve Nicandros told the Atlantic Council that natural gas supplies in the South Kakheti region could amount to 5.3 trillion cubic meters and that Georgia could gain energy independence and become an exporter by shale gas. Soon after the announcement, the value of the company’s shares on the London Stock Exchange rose by 17%, and as time went on it became clear that the company’s statement was untrue. At the time, despite numerous requests from the Ministry of Energy and the Oil and Gas Corporation, Frontera did not provide technical justification for its “discovery”. However, it is important to note that by August 1, 2016, Frontera would have to pay $ 30 million to the State of Georgia under a revenue sharing agreement. In July 2016, it was revealed that Frontera had filed for bankruptcy for the company responsible for this payment .

For the past few years, there has been a dispute between Frontera and the Oil and Gas Corporation, though no publicly announced claims have been made.

This was only publicly announced in the summer of 2019 with the publication of the 2018 Audit Report by the Georgian Oil and Gas Corporation.

Link to full article:
https://bm.ge/ka/article/frontera-saqartvelosgan--35-mlrd-is-kompensacias-itxovs---yvelaferi-davis-shesaxeb/47269


#65

However, it is important to note that by August 1, 2016, Frontera would have to pay $ 30 million to the State of Georgia under a revenue sharing agreement

I’ve never heard this before how true is it?
I always thought they owed us money 6m$


#66

All about to come to a head, just a few weeks longer perhaps.
If we win the arbitration i think there’s some good hope for shareholders but lose and it years in the wilderness at best.
Jmo


#67

New bankruptcy doc…

Tuesday, January 21, 2020
19 6 pgs order Order RE: Motion to Allow Tue 01/21 11:15 AM
Order signed on 1/17/2020 granting recognition and relief in aid of a foreign main proceeding . (DePierola, Jacqueline)


#68

Does that mean FTI have declared FRCC bankrupt, seems so and what does this now mean for the main company?


#69

Flagged on LSE!


#70

If the Geogians have any sense they will ignore the American bullies and run down the clock on the arbitration.

Frontera do not have the finances to keep this farce going for much longer.


#71

Wind the clock back 12 months…,

Cue Booster the wise… “Frontera do not have the finances to keep this farce going for much longer.” LOL


#72

Sadly though, it seems you do.


#73

With sincere thanks to ‘Looed’ from the LSE BB. Again a very high profile letter sent to the Georgia-PM from US-Congressman Brian Babin about treatment of US companies - timing is everything as they say.

https://cdn2.ipn.ge/media/uploads/2020/01-24/babiniswerili.jpg


#74

https://cdn2.ipn.ge/media/uploads/2020/01-24/babiniswerili2.jpg


#75

I think the timing of these letters are interesting and deserves more deliberation. It could be that the Arbitrators have guided the two parties to come to a resolution rather than relying on a final and binding Arbitration decision. We may well be in this ‘recess’ period now and the timing of these letters (plus some informal intervention from the US @ Davos - i assume) will add some energy in to reaching an agreement?

I also find it interesting that Georgians have allegedly spent $6m in legal fees on the Arbitration. If that is true, then I believe it Is being personally financed by is Bidzina Ivanshivili.

There are going to be General Elections in Georgia in October 2020; the Dream Team has been in power since 2012. I kinda agree with the US Senators that Georgia has not thrived under the incumbent political party. I reckon Bidzina Ivanshivili and his associates are Russian sympathisers yet portraying themselves to be US & EU supporters; time for the veil to drop?


#76

The fact that there is infighting between parties - Hope etc surely encourages the GG to step in. I had a Victorian print showing a cow being tugged at the head by a farmer, another pulling at the tail and the Lawyer on a stool milking it. This seems to be what is happening here.


#77

Oppsi’s post from the LSE. I kind of agree with him that the Georgians must fancy their chances, probably explains uncle sam getting involved.

"Arbitration timingsToday 10:59
I thought it may be helpful to provide some guidance about timings for the making of an award by the arbitrators as it is being discussed this morning.

The only information we have is the press reports so this analysis is based with that caveat. It appears the Arbitration took place in the middle of December. The arbitrators have asked the parties to submit final written submissions and responses with that process due to complete mid February. Written submissions in this manner is usual and entirely consistent in both arbitral and court proceedings. The arbitrators will not deliver an award until those submissions have been sent. Then it is up to the arbitrators to arrive at their decision. This is the unknown element in terms of timing and will depend on the number of issues to be determined, the complexity of the dispute and the volume of documents etc…As a rough guess I’d say we are looking at the middle of the year. I have been involved in one complex arbitration where one of the arbitrators was a leading QC and it took him over a year to deliver his award! The big question is will the parties be able to resolve the matter before the middle of the year. The GOGC have spent over £6 million allegedly and with only the award pending and given the way the arbitration went (FRR having to instruct a new legal team and the arbitrators refusing to take on FRRs procedural challenges) I think they will fancy their chances. The recent increased pressure from the US has , however, set the cat amongst the pigeons somewhat. Will it be enough to stop the arbitration in its tracks at the last minute? For those old enough to remember, reminds me of Penolope Pitstop tied to the railway track with an express train approaching only to be rescued at the last minute."


#78

The cavalry are here…in the shape of the US political muscle


#79

Post from brgmg69 on LSE yesterday!

"Following on from Pyros post regarding companies that have gone or delisted and his excellent narrative as to why, you can see why the shorters have tried to do the same with FRR. To them it was just a well trodden proven path which they assumed would work here.

FRR appears as time passes to be increasingly different, we’ve had a year of assumptions but sleuthing has started to turn up more and more information with the latest being letters dating back to Dec2019 from members of the US congress to Georgian political figures, the latest mention presidential awareness of the issue.

I cannot think of a single other AIM share that has had that sort of backing, now I’m not saying this has been planned but what I will say is that if nothing else the US and high up players in its political circles are now reacting quite pointedly to the situation FRR finds itself in. If this is such a basket case why are they even bothering? These people I doubt will have just ploughed in without gleaning significant information prior to putting pen to paper.

With that in mind is it any wonder that those that have followed a well proven path of shorting are now here desperately trying to prove their point, they are currently looking down the barrel of a gun not knowing if or when it’s going to go off however what they do know is that it is locked ****ed and there is a finger on the trigger.

All still to play for, forget the mortgage document, forget the court cases forget whatever else these people are hanging hope on, this is now firmly a political play and the rest will be sorted by a serious cash injection of some sort if it resolves in our favour."


#80

Playing devils… a couple of counter points: For a US Senator surely this is a win/win. If FRR is a basket case then using it as political football has little fallout / nobody gets hurt; and of course if it does go bust then it’s a great opportunity to turn up the heat even further. If the pressure works then great, they can all claim a bit of the credit for defending US interests in Georgia; if it goes bad then they can at least say they tried…