David Pescod features WEE again...tomorrow shoudl be another great day.
cheers,
Lucy.
WAVEFRONT ENERGY (V-WEE) $1.67 +0.50
Back on October 20th, we moaned our lack of technical expertise,
particularly regarding Wavefront Energy & Environmental Services. Whenever
you are involved with developing a new technology of course,
there is lots of doubts, legitimate hard questions, and more than a few
doubters.
This involves technology that’s centered around new drilling equipment
that could revolutionize the oil and gas business, as well as
heavy oil and also pertain to related businesses such as environmental
clean-ups and heck, even leaching of uranium.
We take a new look at the story today because even more results
come out today about uses for heavy oil with their technology. One
thing that has changed in this story is that Walter Stelmaschuk, the
previous chairman of NQL Drilling, has joined the board as an outside
director. We ask Walter, how interesting is this story? He answers,
“well, it’s interesting enough that it got me out of retirement!” He
makes the point that they’ve had good reports out of their Oklahoma
gas fields, today they have good reports and developments on heavy
oil work and you also have to consider the potential for environmental
clean-ups which could become a big part of their business.
Mainly he says, “if this tool works, it would have a major impact on
old fields and manage to increase production or revive old former producers.
I followed this story for four years as one who was aware of
the potential for what this technology could do.” The first 25 wells
that they tested were part of a learning curve, but the latest have
shown they could be on the verge of making quite a contribution to
the energy business.
Stelmaschuk, who way back used to be a stockbroker, mentions that
this is a story that’s only appropriate for risk capital and points that
essential elements such as cash flow, earnings and the like, are very
skimpy at this point, but still as he reiterates, it was enough to get him
out of retirement.
Jim Letourneau on the other hand is not shy at all about his high
expectations for this story. The writer and editor for the “Big Picture
Speculator” is also a hydro-geologist, which means unlike us, he actually
has a very technical background and it is in the oil and gas patch.
When we ask him to stick his neck on the line and give us some potential
targets for this story, he says, “this is a stock you pick up a few
of, and put away for $10 or $20 and then look at the fundamentals.
Wow! That’s definitely taking a position.
When we ask Letourneau to please explain what this new equipment
does in baby talk, he says, “this is simply a new method of getting
fluid through the ground quicker.
Well that sounds easy enough. He says he is a big believer
in the technology. One problem with a story like this Letourneau
cautions us, is that whenever you have a new technology,
so many people in the oil and gas business that promote
themselves as innovators, in fact aren’t. He tells us “most of
them wait and see how the other guy does and make sure
that the other guy doesn’t fall flat on himself before he uses
the technology himself.” So that is the one thing that could
slow down acceptance of the new technology, he suggests.
It will also be interesting he says, how they decide to market
their equipment.
Brad Paterson, the company CFO says today that “we are
glad the market is becoming aware of our story, but at this
point we are simply trying to move the company forward.
Whatever happens next, we suspect this is going to be one of
the developing stories in the patch, should this technology
become as important as some people currently think.”
Wavefront Energy & Environmental
www.onthewavefront.com