For those who don't know, the key player in FEC and obviously OYL
imo is Catalyst Capital. They are a Canadian Venture Capitalist fund who describes themselves below on their website. I have highlighted the type of companies who have invested in their Limited Partnership funds, the last fund was formed in 2016. So these seemingly conservative investors, as highlighted below, have had their large sums of money tied up for 7 years and some much longer. If you go to the Catalyst website,
Catalyst Capital | Private Investment Company - US & Canada | Home (catcapital.com) they have not actually been raking in the dough and the pandemic did not help when you look at many of their holdings..
One of Catalysts' investors, the State of Missouri pension fund has been in litigation with them for 3 years or more. A quote regarding their lawsuit against Catalyst is pasted below.
When PRE went broke Catalyst was the key player who helped buy PRE assets for pennies or less on the dollar. Inside the PRE package was a substantial number of OYL shares purchased by PRE in 2012. So as PRE emerged from bankruptcy, who was chosen to be Chairman of the Board? No other than Gab de Alba, one of the managing directors and partners of Catalyst. He quickly installed a new board and executive team he likely influences. The board approved the name change to Frontera Energy (FEC). At some point FEC starts acquiring more OYL shares on the open market, then FEC bought into the OYL concessions very cheap for the first third and I will stop here as all likely know that FEC now owns close to 78% of OYL shares and now 68% of the concession and who is now co chair of OYL? The same Gab de Alba who is still a partner and managing director in Catalyst.and chair of FEC. The agressive stock buy back programn that Gab approved at FEC is allowing Catalyst to have a larger and larger % position in FEC.
So, you have a Partner of a Venture Capitalist fund that appears to have not returned much if any capital back into their various LP funds or to the conservative investors who put $Billions in Catalyst funds. I could not find the actual annual return on the funds, If someone can, please share with us. Thus, when you factor in all of the risks involved with FEC/OYL including the high risk of deepwater drilling and we are likely down to this one well and done, the Colombian country risk real or preceived, the price of oil risk, the US $ risk, the risk of a recession, the risk of an all out war in Europe and I could add more.
But to sum it up when you have had what should be very conservative investors money tied up in funds invested in high risk companies and have a chance to totally bail out of one upon one big well, is Gab and Catalyst going to take the money and run and satisfy some long overdue investors or decide to stay in high risk mode for the long term?
My less than .02, if Wei-1 is a success, Catalyst puts the entire company intact for sale (FEC). That would include the CGX shares it holds just like they stayed with PRE even in bankruptcy. And I think the hidden gem inside the FEC package is Puerta Bahia that is a +/- $500mm port that hopefully entices CNOOC to pay top dollar for FEC. What I question if OYL stays intact and the new owner whoever it is, keeps OYL as a majority owned subdiary, what happens to the price of the remaining public OYL shares????
Here are various clips to see why I think Catalyst is the key player and Gab and team are calling all of the shots. If the Wei is a duster for whatever reason, I do not have a guess. So, I am hoping for a great well and let Gab make the deal for what to sell my FEC shares for, as I suck at timing my sales. If anyone spots anything that seems like misinformation, please point it out. That is the purpose of these boards. Share one thoughts and opinions and question if something seems wrong or BS..
From Catalyst website: "The Catalyst team has extensive knowledge of and experience in navigating the Canadian capital markets and integrating Canadian restructurings, when necessary, with U.S. and other jurisdictions’ capital market restructuring, regulatory, and political processes. This experience combined with significant on-the-ground presence has resulted in Catalyst being one of the preeminent investors in distressed and undervalued situations globally. Catalyst believes its job is to manufacture risk-adjusted returns and, as a result, its Guiding Principles are an integral part of its culture. Catalyst has raised five funds (and two parallel funds) with over US $4.3 billion in capital commitments from prominent university endowments, charitable foundations, pension plans, family offices and financial institutions."
From Kansas City paper:
"Missouri State Employees’ Retirement System, Jefferson City, filed a lawsuit against Canadian distressed debt specialist Catalyst Capital Group, making multiple allegations including misconduct and breaches of fiduciary duties.
The $9 billion pension fund, which filed the lawsuit Thursday in Cole County Circuit Court in Jefferson City, alleges Catalyst and Newton Glassman, the firm’s founder and managing partner, “did not manage investments honestly, or with anything close to due care,” making “conflicted, unfair investments” which “lost hundreds of millions of investors’ money,” according to the court filing." From 2022 AIF dated March 2022
"Certain Shareholders hold a significant portion of the Common Shares While the Company is a widely held public company listed on the TSX, based on current public filings, Catalyst currently holds approximately 36.8% of the Company’s issued and outstanding Common Shares. As a result, Catalyst could have the ability to exercise substantial influence over the policies and management of the Company, which could prove to be contrary to the interests of the other stakeholders of the Company. It cannot be assumed that Catalyst or other large shareholders will remain as shareholders for the long-term. Catalyst may be interested in disposing of its interest in its Common Shares in the near- or medium-term and may therefore be unwilling to pursue certain long-term policies to the extent they may have short-term goals. In addition, if Catalyst decides to dispose all of its Common Shares, and such disposition results in the decrease of the 2028 Unsecured Notes rating, this event may trigger change of control provisions under the 2028 Unsecured Indenture, at which point the Company may have an obligation to offer to redeem the 2028 Unsecured Notes at 101% of the principal amount thereof plus accrued, unpaid interest and Additional Amounts (as defined in the 2028 Unsecured Indenture). If, as a result of a disposition of Common Shares by Catalyst, a controlling shareholder is created, a controlling shareholder could have a different vision and strategy for the Company’s business, which the Company cannot predict, but which may be adverse to the interests of other stakeholders of the Company."