Interesting comments from well known small cap researcher Peter Strachan in one of his latest newsletters... he feels the AZZ sale was well timed to take advantage of high prices. He has just returned from the Texas shale belt so should be up to speed with the market situation.
Could the cards now be in AZZ's favour to buy back in at lower prices?
"Shale Plays Trade in shale gas permits is turning in the buyers favour. A rush of high-end trades by National Oil Companies and the oil company majors pushed up prices to unsustainable levels. While permit quality is an issue, good ground can still be bought for a reasonable amount of say $2-4,000 per acre. Some companies have over committed to drilling to retain acreage and are being forced to sell.
The sale of Antares? permits for $200 million looks very well timed in hindsight. The company faced a steep funding task which would have been highly dilutive, given the mediocre production performance achieved from its EFS horizontals."
