What AZZ acquisition offer means for LONESTAR RESOURCES, page-5

cmonaussie, both AZZ and LNR are oil-weighted (I hope you understand what it means), both are juniors (I hope you understand what it means), both are Australian with US - operations.

Regarding the pricing in the Permian Basin (where AZZ operates) and Eagle Ford (where LNR operates), check this out:

Permian crude production is mostly categorized as one of two grades – the light sweet West Texas Intermediate (WTI) or the sour West Texas Sour (WTS). This is what AZZ receives, while LNR receives Light Louisiana Sweet (LLS) pricing.

There is a discount paid for WTI and WTS delivered to pipelines in Midland, TX (in the Permian Basin) versus the price of WTI and WTS delivered to the Cushing, OK trading and storage hub.

At the moment, crude prices for Light Louisiana Sweet (LLS) – the benchmark light sweet crude roughly equivalent to WTI at the Gulf Coast are trading at a premium to WTI Cushing that has averaged $4.80/Bbl year to date but narrowed in April to $2.50/Bbl. With Midland WTI trading $8/Bbl below Cushing that means the Midland/LLS spread is currently about $10.50/Bbl.

This spread between LLS and Midland WTI is obviously favorable to LONESTAR, as you understand.