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Frontera – how do you keep armies of BBMs in suspense?….er, we’ll tell you later

By Nigel Somerville, the Deputy Sheriff of AIM | Tuesday 28 November 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

AIM-listed Frontera (FRR) has managed to get around to updating the market on its Ud-2 well in Georgia. To be fair, it did promise news by the end of the month. On the other hand, there are no flow rates. Had they been good, you can bet the numbers would have been there this morning.

Instead, we are told that:

Once the well cleanup is completed and a stabilized gas flow is established, the Company will update the market regrading accurate gas flow volumetrics.

Er, right.

There is plenty to excite the bulletin boards, but it is all about the quality of the gas – not the volume being brought to the surface. Being a cynical so-and-so, I think it is fair to say that had it flowed in large enough quantities during testing then Frontera would have shown no reticence in telling the market the good news. But it hasn’t.

We are told that the gas-flow has increased with the progressing of the cleanup of the well but no metrics are offered. So it could be that one teaspoon per day has increased to two and that statement would still have been true.

New (-ish) CEO Zaza Mamulaishvili may be hugely excited with the interim results of the testing, but that may be more about pumping the share price higher (it is up 13% so far today) so as to help with the phone calls to the bucket shops in search of more money.

It certainly doesn’t look like an announcement to justify the company’s £95 million market capitalisation.

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