Ann: Investor Presentation , page-20

" I'd expect the price to follow +ve production announcements. I'd assume it would creep towards $1 over the course of the year. "

Can't say i agree with this. Let's not forget this company's production peaked in September 2012 at around 2,200 boepd. At the time the share price topped out just under $0.60. Since then production has halved and the debt balance has grown.

The only explanation i can think of for the deal falling over is that the acquirer has walked away. How else do you explain the lack of disclosure around who the bidder was and the very extended settlement process? There is no rational reason for a small cap O&G company to knock back a takeover approach at a significant premium when they have (i) declining production, (ii) minimal operating cashflow, and (iii) a net debt balance of around $65m.

In my view AZZ are now faced with a significant funding gap. The need to drill 20-30 wells per annum to get production growing, which is exactly what they did in 2012. To do this they need $50-60m of funding. Given how inappropriately leveraged the balance sheet already is I think they need to do this via an equity raise. Otherwise the company needs to renegotiate a new sale of assets ASAP. Pressumably at a lower price than the one which just fell over.

The company's disclosure around the supposed sale process was a disgrace.