latest comments from pattersons re fd2

To all followers of AZZ here are some comments made today by one of Pattersons private client advisors
It is the commentary around what the US companies are doing adjacent to AZZ that provides IMO comfort that regardless of FD2 results that there is long term value in holding AZZ...not good news for day traders but as always do your own research

Please see today's announcement where AZZ reaffirms their production guidance of 11.4 MMcfe/d from Francis Dilworth #2 (FD #2). At current spot prices this would equate to revenue of c. $23M p.a.

The company remains on track to bring FD#2 into production and although completion has been delayed, it is continuing without incident. Once FD#2 is completed, AZZ will move straight onto FD#3 which is inline with the company's plan to have 3 Eagle Ford wells in production by the end of this quarter.

We note that on Tuesday, Pioneer Natural Resources - which is located 25 miles to the East of AZZ's acreage - bought their 2nd Eagle Ford well (Crawley) into production at a production rate of 17 MMcfe/d !! (c.$34M p.a). See: http://www.reuters.com/article/idUSSGE60I0HG20100119?type=marketsNews. This should bode well for further increases in acerage valuations in the region.

I have also attached Petrohawk's latest presentation for your perusal. (For info on Petrohawk: http://www.smartmoney.com/investing/stocks/the-best-bets-in-the-oil-patch/?) Slide 15 of the pdf shows the significant increase in activity on the Eagle Ford shale. Whilst Petrohawk have been the most aggressive player to date, we note the emergence of EOG Resources to the direct north and east of AZZ's acreage. EOG Resources are reportedly getting more than 1000 bo/d from their Hundley wells which directly abut AZZ's newly acquired Bluebonnet acreage. All of this significant investment and activity is occurring on a narrow band of Eagle Ford shale, suggesting that asset prices will certainly rise and the prospect of a bid for AZZ is very real.