Folks, as the AZZ acreage is largely in McMullen county, it is...

Folks, as the AZZ acreage is largely in McMullen county, it is worth comparing nearby oil wells operated by EOG and Swift in McMullen. Results are
EOG Hundley2H 493 BOPD
EOG Hundely4H 218 BOPD
Swift PCQ1H 1134 BOPD
AZZ FD2H 790 BOPD
AZZ FD3H 941 BOPD
AZZ FD4H ??? -> known in a week

Positives
-AZZ wells are comparing favourably with the IP nearby wells
-EOG, Swift and other significantly larger companies have staked much of their future on the same oil window as AZZ
-Acreage transactions appear to put a floor price of USD10K per acre.
-Takeover / JV activity in the Eagle Ford looks rampant, with news almost on a weekly basis. It means a bid for an undervalued assets such as AZZ is highly likely.

Negatives
-Decline rate. FD2 production dropped very quickly.
-Ongoing capital requirements

Valuation
Much seems to hinge on not only the IP but how successful you think AZZ will be in stabilising the decline on the next wells. The stabilised rates will play a large part in determining the viability of the oil play. FD4H, using a new fracture technique (ceramic and bauxite), will be one to watch closely.

What do I think AZZ are worth right now?
If you were to value AZZ on 10K per acre they should be around 90cents.

Future?
Management must have the view that declines on subsequent wells will improve. If this is correct and you share this view you have imo one very undervalued company, perhaps 2-3x higher than 90cents in the coming years based on the Patersons cashflow and EOG oil reserves modelling.

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NB. Just a view. Do not take this as investment advice. DYOR