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Frontera Resources - another ramptastic release - So What?

By Tom Winnifrith | Friday 25 May 2018


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.


I am waiting for Fat Bastard, the whore blogger Malcolm Graham Wood to earn his pay cheque by saying what great news Frontera Resources (FRR) has served up today. Of course it has not. This is more meaningless gibberish designed to pump the stock ahead of a bailout placing. But I have to take issue with the City's No 1 oil analyst Zac "the knife" Phillips of SP Angel. He is right to be mega bearish but wrong about the company. He opines:

Frontier Resources – So What?: Today’s well results release yet again fails to provide context, and we can only surmise that it is because the lack of planning to this point suggests that the outline of the results haven’t been considered ahead of time. At the risk of being repetitive, we believe that the Company’s skill base paucity has precipitated a situation where it lacks an integrated study plan to elucidate the commerciality of the assets adequately.

If it had done, these results would either be expected, or not, but either way would signpost towards ultimate value. The last third-party Reserves report was over 3 years ago, and we believe that with each well, the pressure for the Company to reconcile the results of the drilling to that report become greater.

As we have said previously, what is needed is a plan to not only bring together all of the technical and study work that has been completed since April 2015 (the last report date) but also outline the forward programme too, accompanied by clear expectations.

Ends.

Zac seems to think that Frontera seems to lack the expertise to run the company properly. But he is very wrong. His mistake is to think that Frontera is an oil E&P play. Of course that is what it says it is but its real business is as a serial issuer of shares and with 15 billion of them now in issue I would say that in its core business of confetti creation it is incredibly competent.

The company is running on fumes with no cash. A placing looms. What must worry fat Bastard and his paymasters is that the ramps are proving less and less effective. When this current pre placing ramp campaign began the shares were more than 0.5p. They are up only a fraction today and are just 0.43p to sell. The market knows that a discounted bucket shop placing is imminent.


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