agm moving forward, page-11

I received this from my broker a little while ago re a phone conversation he has with AZZ.

AZZ UPDATE

PHONE CONVERSATION WITH JAMES CRUICKSHANK 22/03/2007.


Oyster Creek.

Harrison –1 well.

James sees this well as being very positive. He said it has only got better and better although they did have to make a few diversions on the way, to get these above expectation results.

Scott-2 well.

He has great expectations on Scott-2. He wanted to make the point that when you drill a one off well such as Harrison-1 and Garcitus, even though the guys have 30 years drilling experience they still find every well different. He used the example of knowing what size drill parts to use and what mud weight to pump. He said that you could see this so far in Scott-2, as it is incident free as they have the experience from Harrison-1. This applies for Garcitus-1 and Garcitus-2 as well.

New Taiton.

Ilse-1 well.

An unknown well. With the gas flow into the bore well, he said people with the glass half empty see it as a negative as the operational procedures have to change. People with the glass half full see it as a positive as the hole has gas. Instead of following the procedure in an A B C D method to get the results, AZZ will now have to get the results by doing an A D B C procedure. He said that a larger Cap company would not have to even disclose this sort of information. Running a liner is neither great Technical burden nor time burden.

Little Bear.

Garcitus-1 well

A one off well. He talked about Reservoir damage. He repeated that larger cap companies wouldn’t have to report these details. 85% of wells get reservoir damage and ironically the higher pressure your well the more damage you get. Stimulation is very common procedure over there and hence he does not see any time delay in the results coming out. He did say that it does add other variables. Eg there are trucks driving around the sites all the time, but will they have this procedure done tomorrow or next week who knows. He did say that the stimulation program is quick. Once they are there the results should come out soon after they have completed it, as early as the next day on occasions. He is still hopeful of the results coming out next week but please don’t hold that to him as he did say there are variables.


Garcitus-2 well.

A leak off test is a simple test done on all wells. As I said before, as this is the second well drilled, the drillers know more about it i.e. what drill sizes and what mud weight to use to avoid damage and hold ups.

Other Questions I asked him.

Where is the support?

He said that he spoke to two Fund managers yesterday and the fundies said they are not going to step into until “the hot money fu#ckwits” stop selling.

Are you protected from getting drilled out?

Yes we raised another $6m through the convertible notes and have $20m in the bank for further drilling at Garcitus.

About the share price?

He said the people that sold at 53c in January look silly and that if all goes well the people selling at 73c are going to look silly when the stock is three figures.