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By Tom Winnifrith | Thursday 7 June 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.
The whore blogger, Fat Bastard Malcolm Graham Wood, may try to spin today's disastrous financing news from Frontera Resources (FRR) as a triumph but as I explained earlier it is far from it. Zac "the knife" Phillips of SP Angel, the City's No 1 oil analyst, goes further with a statement that the entire board needs to be sacked. He opines:
Frontera Resources – If it Weren’t So Serious…: Today’s announcement, in which the Company has announced the restructuring of its “Yorkville” facility, marks a new low even for a company that constantly sets low expectations… and fails to meet them.
Were it not so serious, this would be highly amusing, but this, yet again, highlights the deficiencies in the Company. We have always pointed towards the lack of technical experience at the Board level as being responsible for the failure of the Company to have made any significant progress over the last 12 years, and to have squandered so much shareholder money.
To this, we now add our belief that the management team are unfit to run the Company on behalf of its owners. For the benefit of all shareholders, Yorkville should assert its influence to seek a management review as a bridge to ultimately replacing the current Board and executive management wholesale. That way, the owners of the equity have a chance to see some value appreciation.
Of course it will not happen. Yorkville is making a killing from the current death spiral flogging its stock at a guaranteed profit to morons. So it will not seek managemant change which means Frontera is doomed to destroy even more value.
By way of contrast, here is what a the company's retained broker, that is a broker paid by the company, WH Ireland thinks. Analyst Brendan Long really is a shameless mother, and a whore analyst for penning this tripe. Brendan has been bulish all the way down so he bhas got it wrong. Zac has been bearish so right. Guess which analyst the morons laud today? Here is Brendan's gibberish:
Frontera announced that to effectively eliminate the legacy of an equity drawdown facility it has agreed to redeem the entirety of the shares (or securities that can be converted to shares) held by the equity drawdown facility provider for cash over a twelve month period at a rate of $0.265m per month. The company has the right to issue shares in consideration for the elimination of the relevant liability, which has a nominal or redemption value of $2.8m.
In our opinion, the company has matured from the period where it was reliant on equity drawdown facility structures to provide it with funding, which is a very positive evolution in our opinion given what we perceive to be damaging impacts of such facilities. We have assumed that the maximum possible amount of shares that could be issued as a result of the legacy facility will be issued so the drip feed of equity has no dilutive impact on our valuation.
Frontera has made very considerable progress operationally and corporately over the last 12 months, which have essentially transformed the company’s direction of travel. We believe that successful long-term production testing at the company’s Taribani oilfield would further propel it into a different category. With success at Taribani, we believe the company would have access to, what we consider to be, higher-quality sources of capital (equity/debt/industry/hybrid structures) that would better facilitate the the obtainment of corporate goals and the creation of shareholder value. We are glad to see Frontera closing the final chapter on its legacy equity drawdown facility.
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