Jim Letourneau's Blog

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Wavefront Update

I picked up a few more shares of Wavefont Energy and Environmental Services (WEE.V) as I have a hunch they may be near a trading bottom.

This company is making great strides in producing more oil out of old fields. I periodically like to review my investment ideas to make sure they make sense to me. I don't expect them to make sense to everyone else.

  • Canaccord's recent research report (Improved Oil Recovery: a case study-  hard look at the business models) thoroughly reviewed numerous types of projects and showed robust IRRs for numerous existing IOR projects - ones that did not use Powerwave.

  • Many forms of EOR require the injection of fluids.

  • Powerwave was developed over the last 10 years and over 225 well stimulations and 11 flooding projects have permitted Wavefront to refine and improve its technical understanding of Powerwave as well as the predictive model and systems that drive the process.

  • Implementation of Powerwave Technology in Injection Wells has resulted in no less than an immediate 40% injectivity index increase and as high as 9 Fold.

  • A recently announced example stated that in six months using 3 Powerwave systems leased for $3000/month that they were able to increase production from what would have been 120 barrels/day (based on the production decline rate at the time of implementation) to 220/bbls/day. The client company wasn't announced but was believed to be Encana. (cost at that time would be $54,000 plus costs related to installation).

  • In Texas, after 3 months oil production from the eight wells influenced by two Powerwave systems in one location has increased by 21 barrels of oil per day or 26 per cent. (cost at that time would be $12,000 plus costs related to installation)

  • The tools are easily installed and robust in the field.

In a few years reserves will start getting booked as these projects mature. I think Wavefront will be worth much more at that point.

In addition there is a very large environmental market for this technology as evidenced by the following:

Primawave and the associated Hornet tool represent the first truly new innovative technology for the delivery of treatment fluids in the environmental sector in the past ten years”, commented Mr. Pat Hicks, Ph.D., Technical Director of Zebra Environmental, a specialized environmental contacting company based in Lynbrook, NY. “Zebra and its clients have successfully used Primawave in challenging subsurface environments where conventional methods have proven ill-effective. There is no question Primawave will be in great demand in the environmental marketplace.

I am a shareholder in WEE.V