You are quite wrong in your assessment of this funding. Why so you ask?
1. They are running out of money. The capital spend due to drilling is oustripping cash in flow.
2. They have $20M in convertable notes (read debt). What do you expect them to do, borrow $20M
3. They have total choice (short of running out of cash) when they pull the trigger unless they want to grab the $5M tranche in a single hit.
4 They are clearly playing the obvious card. If this JF-1 well comes in, the share price will bolt, they hold off until this happens inside the 40 day trigger period and go for the $5M. The balance they can string out for when they like or not at all.
This is a clever innovative funding mechanism which gives AZZ enormous flexibility.
They have quite enough debt for my liking.
If JF-1 generates $10MMcfd, they will be do the equity raising at $1.00 a share.
By the way, hasn't anyone noticed that Outlar -1 is producing at 2.4 MMcfd and this is being held back. When the have finished slowly releasing the break we may have 5 MMcfd out of this baby.
The share price might look like shite but I feel things are about to turn for the better very soon.
AZZ Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
