Beaufort Securities view on Frontier Resources: Frontier’s successful conversion of shares follows its issue of 42 million ordinary shares on 21st July to enhance the capital structure of the company. The issue of shares to the directors is likely to improve their interest toward the company’s growth. In addition, Frontier recently informed that it is likely to continue with drilling without the need for a 3D seismic survey at Block 38 in Oman and is planning to enter into farm-out discussions with Middle East-based partners for the same. The company’s strategy looks encouraging as it is expected to attract potential investors and also limit Frontier’s risk exposure in the asset. In view of the above, we maintain a Speculative Buy rating on the stock.
Yesterday, Frontier Resources announced the conversion of outstanding amount of US$206,164 into 37.8 million new ordinary shares to AGR Energy Limited at an issue price of 0.35p per new ordinary share. Frontier Resources also agreed to the issue of the new settlement shares to its directors at the same issue price as final settlement of the Loan Agreement. A total of 5.0 million new ordinary shares have been issued to Mr Herbert in view of £17,611, the company owes him as per his letter of appointment. Likewise, Mr O’Donovan has been issued 2.9 million new ordinary issues in view of £10,000 owed to him by the company under his letter of appointment. In addition, CFPro Limited (a company controlled by Mrs Spurrier) has been allotted with 4.3 million new ordinary shares in lieu of £15,000 owed to them for the accounting and administrative services provided to Frontier. Post the issue of the new shares, the company’s issued share capital comprises of 340.5 million shares, with voting rights. The admission and trading in the new shares on AIM is expected to start on or around 31st July 2015.
Beaufort Securities acts as corporate broker to Frontier Resources International plc
