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Jim Letourneau's Blog

Investing, Technology, Travel, Geology, Music, Golf. I think that covers it.

You Had to Be There!

My latest newsletter - you can sign up for these (click here).

 

I've often said that small cap investment conferences are like the pro-wrestling matches of finance. There are extreme views from interesting personalities ranging from self-described public figures to micro-celebrities such as myself. 

What did you miss by not attending the California Resource Investment Conference?

I don't watch financial television unless I'm exercising on a machine (CNBC) or flying with WestJet (BNN). My sense is that people are starting to laugh at bad news. The markets? They look like they just might be turning the corner. Could it be a stock pickers paradise? 

 

Water Flood Bull Market

Yes it is "game on" for water floods. Don't take my word for it, check out what Eric Nuttall, lead portfolio manager of the Sprott Energy Fund said in a recent Alberta Oilarticle:

 

Several investment opportunities are glaring for the year ahead. The first is water flooding. Crescent Point Energy Corp. has been carrying the baton for industry with its Viewfield pilot, and continued success there bodes well for tight oil waterfloods elsewhere. Several junior and intermediates including Pinecrest Energy Inc., Wild Stream Exploration, Legacy Oil + Gas Inc. and Surge Energy Inc. will be testing pilots this year. The investment opportunity is significant because "The Street" is behind the curve in appreciating the low finding and developing reserve growth potential in many of these companies from water flooding recovery methods.Look for Bay Street to wake up to this in 2012, and to begin to place value on this largely hidden upside. 

As analysts start to pile onto this theme, they'll quickly find out about Wavefront Technology Solution's (WEE.V) Powerwave which fits perfectly into Nuttall's water flood theme.

Why would you want to use Powerwave injection on a water flood?

High production upside (25-200+% more bbls/day), significant reserves growth (35-50% increase), rapid payback (2-10 month payout), and high ROI (>100%). Oil cuts increase after Powerwave is implemented. The increase in asset values happens in months instead of the the 2-3 year lead times that CO2 or ASP floods take. 

Wavefront currently has a $66 million market cap with ~$20 million in cash. This company was well prepared to endure the financial crisis that didn't happen. Remember it is a technology company. Very close to break-even. One analyst described the company as "too cheap to fail" and I'm thinking it is too cheap to not buy. 

Nuttall puts his money where his mouth is. According to the Morningstar fund database, Sprott Asset Management owns 7.81% of Wavefront's shares. I own shares too, and I consult for the company. 
  

Check out www.onthewavefront.com for more info. There are some great videos on the site and informative content is being added all the time.

Don't forget to check out http://enhanced-oil-recovery.jimletourneau.com/ as well.

 

The Barker Letter

Kevin Barker is a very good writer. I met him in Chile a few years ago. Sometimes he writes about stocks but there's a good mix of travel and technology as well - he's still working on his site but it is already populated with great content (Click here).