Wavefront announced the following on November 26, 2007.
We are pleased to see ERM continue to use the Primawave process where they have seen the technique inject liquids more uniformly and up to three to five times faster than traditional pressure injection. There exists a large potential market for Wavefront's Primawave process and, more specifically, the Hornet in the environmental sector where the U.S. federal government estimates it will spend $239-billion (U.S.) over the next 75 years and private industry is spending $4.5-billion (U.S.) per annum. Management believes the success of the Hornet tool can leverage the Primawave process to companies who depend on the rapid and efficient placement of treatment remedies at multiple injection sites. To this end, the company's strategy is to license Primawave and Hornet tools to environmental consulting and service companies. At present, the company is reviewing additional licensing options with other environmental consulting and service companies."
I’m going to pull out the critical information because it often gets lost.
- …inject liquids more uniformly and up to three to five times faster than traditional pressure injection
- spending by private industry $4.5-billion (U.S.) per annum
- annualized spending by the US government of $3.2 billion ($239 billion/75 years)
Wavefront’s market cap reached a low of sub $50 million this week. Given that the PrimawaveTM process is more effective than traditional methods it is reasonable to assume that it could gain a few points of the environmental market. Taking a whopping 1% market share of that market would lead to annualized sales of $77 million in the US market alone.
I think Wavefront’s decline was overdone and today’s market action indicates that the value buyers are taking notice. My next post will put their most recent press release in context.
I currently consult to Wavefront to provide Investor Relations services and to undertake research and due diligence related to the acquisition of oil fields and / or oil companies. I am compensated via a monthly retainer of $3,500 per month and 75,000 incentive stock options.