Good to see management confirm what many needed to hear....

Good to see management confirm what many needed to hear. Announcement was marked price sensitive on the ASX, so my take is holders deserved this announcement earlier.

Anyhow the big and perhaps easy to overlook news from today is the last line. The first cheque is in from the PetroHawk Term Assignment. This arrangement involves a back-in after repayment of costs on a well by well basis. That means DH457, the first of these wells, has paid back costs in under 5 months, a spectacular result.

DH457 TRRC reports show production from the first 3 months in excess of 42000 bopd, not including the boepd from gas. With well costs at around $5.5-6M holders should soon be able to decipher AZZ's working interest in these wells. The market and brokers can then begin to fully price in the asset.

My view is AZZ have smart management and plenty of cash. They picked it right early 2009 acquiring more Eagle Ford acreage, taking the company's position from 4200 acres to 23000 acres at bargain prices, at a time when the company was just getting up on it's knees. 18 months later holders have $156M in the bank, a free carry for 110 wells across 8500 acres of the hottest US onshore oil play with a world class operator. To boot they have the opportunity to buy back shares 20% below cash backing.

Today's announcement a nice reminder today lots of things to be positive about. Just wait till sellers clear. End of US financial year is Dec 31st, and I think that date may prove a turning point.

----DYOR----