the largest u.s. oil discovery since the 1970s, page-33

@ OilGoldGas

Your numbers from the 2nd Quarterly Activity Statement (The June quarter) released to the market on 29/07/2010 do not add up. Below is a rough and simplistic illustration of the point.

Slide 4 from the Good Oil Conference Presentation stipulates when the wells were completed

FD 2H - 28/01/2010
FD 3H - 19/05/2010
FD 4H - 30/06/2010

These dates can be cross verified with seperate announcements released to the ASX on the above dates.

You can see from the above dates you have erroneously included production from FD 4H in your revenue assumptions for the full 2nd quarter when FD 4H was in production for only the very last day of the 2nd quarter. Similarly, you have included production from FD 3H for the full 2nd quarter when it was in production for less than half the 2nd quarter. Only FD 2H was in production for the entire 2nd quarter.

Therefore, revenue assumptions for the 2nd quarter ought to include:
-FD 2H for the full quarter (1 well)
-FD 3H for half the quarter (0.5 well)
-FD 4H for absolutely no part of the quarter (0 well)

Using your figures of $1.5m revenue and a $75 oil price for the 2nd quarter (which are approx right), the numbers work out as follows:

1.5m / 90 days = $16,666
$16,666 / 75 = 222 boepd
222/1.5 = approx 150 boepd per well
Extrapolate this across 4 wells (150 boepd x 4) = 600 boepd NET

The 600 boepd is NET to AZZ, because AZZ's 2nd quarter revenues of course do not include San Isidro's 25% interest.

Now refer back to the Good Oil Conference Presentation on slide 2 that indicates a production rate of 800 boepd to August across 4 producing wells. This figure is GROSS because San Isidro and Antares are jointly marketing the land.

Interestingly albeit unsurprisingly to me, by subtracting San Isidro's 25% interest from 800 boepd GROSS gets us back to 600 boepd NET attributable to Antares I extrapolated above

It all seems pretty square to me. The only outstanding issue is the TRRC production data. My general observsations are, and without going into much detail about it, I'd seriously discount the veracity, accuracy, or the conclusions being drawn from this data. Everyone is reporting low flow rates to them. Suggestions that the investment case in AZZ is unsound and AZZ management must be breaching their fiduciary duties to shareholders based solely on an over-emphasis and over reliance on the TRRC data that no one really understands without having questions, is quite incredible to me. I'd much rather put my faith in AZZ's financial statements, AZZ's strict disclosure obligstions to the ASX, the attributes of the shale, recent price action in the eagle ford & the level of interest from parties in acquiring AZZ's leases. It's also worth pointing out that it is San Isidro as the operator making those disclosures to the TRRC, not Antares.

Anyway, I for one am particularly grateful for this suspension. The amount of misinformation that has been propogated on this forum has been quite appalling and is exactly the type of mischief AZZ management was seeking to avoid. 50bopd from 4 producing wells in the eagle ford? Unbelieveable. Rumours such as this would've bashed this stock down to a dime and would have completely compromised the sale process.

My Prediction: AZZ will get between 10k-12k per acre + infrastructure + drilling to date = the share price will go up by quite a margin.

If I'm wrong: I'll be very surprised. And much poorer.

Regards