Retired Life
Investing, Technology, Travel, Geology, Music, Golf. I think that covers it.
Google Account Activity Reports show how my inbox is jammed up with emails. I'm never one to shy away from signing up for a new service but those emails start to add up. I regularly unsubscribe from services as well but obviously at a slower rate. I have numerous filters on my email so it is not uncommon for me to miss a few important ones but I'm blown away that the really important ones regularly find their way to the top of the pile.
Here's what happened last month...
Twitter's market cap is ~$25 Billion. How cool is that? Celebrate the recent IPO by watching the reflective video ;)
For every Richie Incognito, there's a John Moffitt:
I just want to be happy. And I find that people that have the least in life are sometimes the happiest. And I don't have the least in life. I have enough in life. And I won't sacrifice my health for that.
Moffitt majored in sociology at Wisconsin and said his world view was really shaped over the last couple of years when he began studying the writings of the Dalai Lama and Noam Chomsky.
John Moffitt walks away from NFL, $1 million
There's more than one kind of warrior. The ones like John Moffitt are winning.
My wife likes to dress up. She has a very large closet. She loves her Jawbone Up but she's not thrilled with its appearance when she's going out on the town. She's been to Coachella but prefers Broadway shows, opera and ballet.
It didn't take long for her to complain about the appearance of her bracelet. I didn't give it much thought but I agreed (the secret to a happy second marriage) and said that she needs one with sparkles or rhinestones on it. This led to some conversations with one of her friends. It wasn't long before Pat started experimenting. First she checked to see if covering an UP bracelet with material would effect its performance. Then they had a seamstress make a few prototypes out of different materials. Lace looked nice but was difficult to pull onto the bracelet. Stretchy fabrics worked very well. Julia and her friend Pat were encouraged enough to start a business around the idea and Dress Up Fitness Bracelets was born.
Big names like Rupert Murdoch and Gwyneth Paltrow happily wear rubber bracelets. Is this a case of the Emperor's New Clothes? I don't think so. Rubber bracelets are the new activist ribbon. Remember the Wayfarer 515 crash on Breaking Bad followed by Albuquerque residents wearing light blue and orange ribbons? It doesn't have to make sense, once the cool kids grab onto something, they make it so. Even rubber bracelets. They start conversations. Like a Macbook Air at a Starbucks did 2 years ago.
Livestrong's yellow bracelets were very popular and may explain the lack of yellow fitness bracelets on the market. We live in a world where the transgressions of a popular athlete can alter the colour trends of fashion. We're all just Sneetches.
Big Livestrong bracelets hauled outside of Armstrong branded 24-Hour Fitness in Austin, which is whitewashing Lance pic.twitter.com/Xj1BHt8Y
— darren rovell (@darrenrovell) November 11, 2012
When someone wears an activity tracking bracelet on their wrist, they're making a statement. "I track my sleep, I track my activity. I watch what I eat. Please please please ask me what this rubber thing on my arm is for." Activity trackers are getting smaller but its no fun wearing one if nobody knows that you use one. I see a future where people will happily wear activity tracking earrings.
A textbook marketing push by Jawbone during New York Fashion week got a great piece of press in the New York Post - Calorie counter is Fashion Week’s hottest accessory. In the article, New York designer Charlotte Ronson said that she’d like to see UP bracelets come in “different prints.”
I didn't really think too much about making a Kickstarter video. If you look at them they're as good as most Hollywood movie trailers. Slick as hell. I was using methods I taught my kids when they were in grade school. My Donkey Kong graphics skills are not cutting it. We have help on the way and should have an awesome looking video up shortly.
My wife has brought in some big supporters but with age comes friction and resistance to all things new. Two supporters want to pay by cheque, three people thought that Julia's email was hacked when she asked for support. Four people couldn't figure out what the campaign was about. She's had several friends who say they've supported the project with no corresponding record of said donation. Most boomers don't tweet and they're only on Facebook to see what their kids are up to.
In spite of some challenges, with 10 days to go we are 38% funded. We have been amazed at the support we've received from family and friends which we know has been a leap of faith on their part. It isn't charity, it isn't angel investing, but it just might help Julia and Pat make fitness tracking bands look fantastic.
We need your help so please check out our project below.
The big picture on moving oil around the continent so we can drive our cars. The spills referenced weren't actually oil but the main point of this column stands. Reflexive opposition to pipelines flies in the face of the reality that they are the safest mode of transport.
By Kenneth Green
Senior Director - Natural Resource Studies
The Fraser Institute
CALGARY, AB/ Troy Media / - A pair of petroleum-related events in Canada has re-invigorated the public debate over the movement of petrochemicals such as oil and liquefied natural gas.
On October 17, a natural gas pipeline in a remote area of Alberta ruptured, releasing natural gas into the environment. As a result of the rupture, several major oil sands producers had to cut back on their operations. There was no fire, and as natural gas is non-toxic and disperses quickly in the atmosphere, there is little risk to the environment. Canada's National Energy Board quickly responded to the rupture, assuring people that there was no immediate safety concern for local residents.
On October 19, a Canadian National (CN) train derailed about 86 km west of Edmonton, with 13 cars coming off the rails. Three derailed cars were carrying liquid petroleum gas (propane) and four contained crude oil. The propane cars burst into flames upon derailment but the fire was quickly contained, and allowed to burn itself out. Nearly 100 people were evacuated from the local area but thankfully no injuries were reported as a result of the derailment.
The difference between these incidents, a pipeline rupture that threatened no-one and caused little or no environmental harm, and a train derailment that resulted in a serious fire, air pollution emissions, environmental destruction, and the displacement of a hundred people illustrates that, on virtually all metrics of safety, whether environmental, occupational, or residential, movement of oil and gas is safest via pipeline, less safe via rail, and still less safe via roadway.
Data pertaining to the safety of three modes of oil transport in North America show that, on an apples-to-apples basis, transporting a billion tons of oil over a mile of distance by pipeline has a very low likelihood of leakage - less than one incident per billion ton-mile. The risk of a leak by rail is twice as high, at two likely incidents per billion ton-mile. And trucks are 10 times higher still, with 20 incidents likely in moving a billion tons of oil over a mile.
In terms of volume spilled, it is true that pipeline ruptures release larger quantities of oil than individual truck or train spills, but again, when compared on an aggregate basis in terms of ton miles, pipelines are about equal to trucks, but worse than trains. The average releases for 2005-2009 were 11,286 gallons per billion ton-miles by pipeline, 13,707 gallons per billion ton-miles by roadway, but only 3,504 gallons per billion ton-miles shipped by rail.
When it comes to worker safety, pipelines also look safer. Safety data from the U.S. suggests that one would have only 0.007 injuries per billion ton-miles, while rail injury rates are 30 times as high. Road is still worse, with an injury rate 37 times that of the oil pipeline.
That pipelines are safer than trucks or trains should come as no surprise. A pipeline is fixed infrastructure with little exposure to the elements, fewer opportunities for operator failure, and with greater capacity for real-time monitoring and pre-planning for remediation based on the specific and well-understood characteristics of the pipeline route. Trains and trucks, running above ground, on fluid routes subject to constant change offer far more opportunities for breakdown, operator error, and injuries to workers as well as the general public. That's not to say that we should pick one particular mode: each has its pros and cons not only with regard to safety and environmental protection but with regard to economic factors such as changing market conditions - we'll need them all, we just need to understand that choices have consequences.
The public discourse over pipelines has been distorted by environmental groups that have exaggerated their dangers in order to persuade people to oppose their development. But as pipeline projects face increasing scrutiny, regulatory and social barriers, markets are responding in predictable ways, finding other ways to transport oil from where it is produced to where it will be consumed. Those changes, as we're seeing played out in the daily news, have consequences not only for the petroleum industry, but for the environment, for worker safety, and for the safety of those who live along transport routes, whether pipeline, railroad track, or highway.
Reflexive opposition to pipelines flies in the face of the data, which shows that pipelines are safer modes of transport than railways or roadways. Environmentalists engaging in anti-pipeline crusades risk causing considerably more harm than good.
Kenneth Green is Senior Director, Natural Resource Studies at the Fraser Institute. He is co-author of a recent report calledIntermodal Safety in the Transport of Oil.
My wife Julia said that she didn't like having a plain black fitness bracelet. I said she should put rhinestones on it. That led to a Kickstarter campaign led by Julia and her friend Pat Daunais. The site went live this afternoon. I'm not seeing a rush of support just yet.
Pat and Julia know fashion - they were ahead of the New York Fashion week crowd (read this article if you're confused - Calorie counter is Fashion Week’s hottest accessory )
Find out more below:
In my experience, people who hide behind the cloak of anonymity generally behave worse than people using their real names on the Internet. Even people using their real names will write things that they would be unlikely to say to someone's face. The big picture is that nobody is truly anonymous anymore and eventually I would expect for people to remember that manners matter, even on the Interwebs.
With that preamble out of the way, we all love juicy insider information. First person accounts. I've found two services that allow people to describe their experiences of either working for a company or getting paid while consulting for a company.
Glassdoor describes their service perfectly. Glassdoor is your free inside look at jobs and companies. Salary details, company reviews and interview questions - all posted anonymously by employees and job seekers.
I've checked out a few public companies using this service and it does provide an unvarnished snapshot of how people in the trenches view the company. Employees are happy to share their tales of woe anonymously and that makes Glassdoor very useful. Many great companies squeeze the life out of their employees. Companies grow and lose their culture. While the site is tailored for job-seekers, it is pretty handy for anyone interested in investing in a company. I would hope that HR departments pay attention to it as well.
Satago lets freelancers know when they'll actually get paid. Currently UK based. You'll blow your anonymity pretty quickly if you gripe about a smallish firm that doesn't pay many freelancers but it is a valuable site because it answers a fundamental question for consultants. How quickly will I get paid? If this business scales into other countries, it could also be used to track the relative health of different industries.
The founders wear t-shirts that say F**k You. Pay Me. I think that is reason enough to pay attention to them.
Strange coincidence. I was in the Museum of Modern art in New York last Saturday and took a few snaps of the Andy Warhol soup can paintings.
On Thursday I was in a taxi headed to the Windsor International airport and the driver was listening to the CBC. The program was about soup. You record enough programming and you'll probably talk about soup a few times. There's some classic Canadiana on the show but I really enjoyed the piece about Andy Warhol visiting Toronto. You can't make this stuff up!!
Start at 15:34 for the Warhol segment or listen to the whole thing on a cold day for some healthy nourishment.
Catchy tune with a quality video to match. Saw him live at Webster Hall in NYC last night and he's going places.
One of the most memorable meals of my life was courtesy of Frantzén in Stockholm. Ranked as one of The World's 50 Best Restaurants, this place provided friendly attentive service along with some amazingly creative dishes. We were greeted at the door by an NFL sized doorman wearing a dark coat and bowler hat. He escorted us to our seats, at a small bar overlooking the kitchen. Then champagne was served with friendly introductions. At every stage of the dinner, there was an explanation about the source of the ingredients and how they were prepared. The meal was scripted so that ingredients they presented earlier in the meal would not always show up immediately, but a few courses later. Sous-Chef Jim Löfdahl (the tall guy with the beard) graciously answered all of my questions. Of course the food was amazing but just as enjoyable was watching the food being prepared by a fast moving yet efficient team.
This video provides a condensed version of the experience. We were fortunate enough to have the two seats on the right.
I've been curating this site www.enhancedoilrecoverynews.com for several years new. It was about 6 months ago that I inadvertently deleted the entire site from Scoop.It which was one of my worst digital errors in years. Fortunately it didn't take to long to rebuild the site and now there is pretty steady traffic AND Scoop.It is recognizing the site as "highly recommended" in the technology arena. I'm a wee bit proud of the silver ribbon hanging off the site's pumpjack avatar.
I've talked about Nexen's Long Lake project in the past so I like to keep tabs on any new developments.
From Reuters Special Report: The education of China's oil company
CNOOC says it is seeking "new technology to overcome the complex geology. It is not yet clear, industry analysts say, where that technology will come from.
The term "Long Lake reserves" should probably be replaced with "Long Lake resources" but that's a job for reservoir engineers, some of who were obviously VERY wrong about the viability of the project.
Momentum is starting to build in Wavefront's well stimulation business. Don't take my word for it, read the financials. With results like those presented in this paper it is easy to see why.
I'm a shareholder and a consultant to Wavefront Technology Solutions.
Since I wrote Ackman's Canadian Pacific Payday at Canadian's Expense? after a train nearly ended up in the Bow River during the big Calgary flood, Ive been paying attention to the happenings at Canadian Pacific Railway (CP).
Good PR
CP Rail strengthens safety measures after Lac-Mégantic train disaster that killed dozens
Canadian Pacific sponsoring Spruce Meadows competition
Bad performance
Inglewood residents evacuated after eight train cars derail in Alyth yard - the cars were filled with diluent (light hydrodcarbon) which thankfully did not ignite.
We'll see how their safety stats hold up over the next few years. I'm concerned.
I occasionally send my thoughts and ideas out to a free email list. You can view some past emails on this archive link. If you sign up, I promise not to spam you and you will be able to unsubscribe with one click.
The latest one is called - Investing is Easy
The Life Sciences Report (8/15/13) - Jim Letourneau, publisher of Big Picture Speculator, shares tales of strange biotechnologies worth buying into—such as cures for high dental bills and dog breath—in this interview with The Life Sciences Report. Letourneau likes to invest in biotech firms because their stock values are less volatile than commodity-based companies, which are chained to uncontrollable price fluctuations. You are advised to hold onto your brain (quite literally), while Letourneau describes a few curious—and potentially profitable—biotech investment adventures.
Source: Peter Byrne of The Life Sciences Report (8/15/13)
Jim Letourneau, publisher of Big Picture Speculator, shares tales of strange biotechnologies worth buying into—such as cures for high dental bills and dog breath—in this interview with The Life Sciences Report. Letourneau likes to invest in biotech firms because their stock values are less volatile than commodity-based companies, which are chained to uncontrollable price fluctuations. You are advised to hold onto your brain (quite literally), while Letourneau describes a few curious—and potentially profitable—biotech investment adventures.
The Life Sciences Report: Jim, at the recent World Resource Investment Conference in Vancouver, your talk was called, "How I Learned to Stop Worrying and Love the Venture Markets." How does this translate into pursuing profit in the life sciences?
Jim Letourneau: "Venture" is short for adventure. Many life sciences companies are developing new technologies that directly affect people's lives. It is an exciting field to invest in, but it is also risky.
However, investing in the life sciences poses a very different type of risk than, say, going into mining and energy projects. Commodity-based companies are at the mercy of prices that they have little or no control over. A recent example of sensitivity to commodity price fluctuations can be seen in the dramatic downturn in the stock of potash companies after a dispute over marketing between Russia's Uralkali (URKA:RTS; URKA:MCX; URKA:LSE) and Belaruskali (state-owned) led to fears that Uralkali would flood the market with potash at reduced cost.
Life sciences companies don’t have this problem. There is a constant demand. People will pay a lot of money to live longer, or to make their quality of life better. It's a more stable business sector than gold or oil.
TLSR: You've advised readers of your Big Picture Speculator to examine the biotech markets while waiting for precious metals and energy holdings to pick up steam.
JL: Biotech is currently underfollowed and ignored, but the sector has just as much upside as mining and oil and gas. There are some great Canadian and U.S. companies out there.
TLSR: Do you have any names for us today?
JL: One that I have followed for a while is biOasis Technologies Inc. (BTI:TSX.V). BiOasis has a technology, Transcend, which allows drugs to be conjugated with therapeutic protein molecules (p97 protein/melanotransferrin) so that they can cross the blood-brain barrier. This is a big hurdle: A lot of a drug can be injected into the human body, but only a small percentage of it will cross into the brain. Blood-brain permeability is a big issue for treating brain disease.
TLSR: Who has biOasis partnered with?
JL: BiOasis has partnered with some big pharmas, including Shire Human Genetic Therapies Inc. (Shire Plc [SHPGY:NASDAQ; SHP:LSE]), AbbVie Inc. (ABBV:NYSE), Medimmune Ltd. (a division ofAstraZeneca Plc [AZN:NYSE]), and UCB S.A. (UCB:BSE).
TLSR: BiOasis has an Alzheimer's disease product, too—or am I forgetting something?
JL: The correlation between serum levels of p97 and Alzheimer's disease was first made by professor Wilfred Jefferies and his colleagues at the University of British Columbia. The company was developing Cognitest, a blood test for the diagnosis of Alzheimer's disease, but has stopped putting corporate resources into Cognitest. Dr. Jefferies will continue to evaluate Cognitest in a small number of freshly collected human brain samples.
TLSR: Were the researchers using mouse brains to test the blood-brain barrier?
JL: Yes. They used fluorescence imaging to determine the amount of drug penetration into brain tissue.
TLSR: Any other biotech names that attract you?
JL: I like a company called Verisante Technology Inc. (VRS:TSX.V) because it has an amazing spectroscopic device that detects skin cancer with good accuracy. The current state of the art in skin cancer detection is a visual inspection; if something looks suspicious, a biopsy is ordered. Verisante's skin cancer device is looking good, and new data should come out shortly on a device that detects lung cancer, which could be exciting news.
Verisante's skin cancer device, called Aura, is game-changing technology for dermatologists. Yet the company's share price is low and its market cap is about $20 million ($20M). One reason for the undervaluation is that the skin cancer detection instrument has not yet been approved by the U.S. Food and Drug Administration (FDA). The firm is talking to consultants about how to best get its device into the regulatory approval system. That can be a big challenge for a small company. A device may be approved in Canada, Europe, Japan and China, but the big market is the U.S., and that requires FDA approval.
TLSR: Any other promising companies currently in the clinical trial and approval cycle?
JL: TSO3 Inc. (TOS:TSX; TSTIF:OTCPK) has a revolutionary sterilization technique called Sterizone. It uses ozone to sterilize instruments that are otherwise difficult to sterilize. The company was taking one route for FDA approval when the FDA suggested that TS03 use a different approval pathway called a de novo classification (which means that the product is new and unique). But there were hurdles with that method, so TS03 has returned to the normal 501(k) regulatory approval route.
Investors are asking, "What the heck is going on?" The pathway change created some confusion, and with confusion the market gets a little nervous—which didn't help TSO3's share price. The truth is that TSO3 is working hard to get the sterilization method approved by the fastest method possible, and it is the FDA's internal flip-flop that has temporarily confused the market.
TLSR: Does TS03 have competitors? Is there a race to get its system approved?
JL: Its competition is simply the status quo of sterilization methods, such as heating in an autoclave. The problem is that intricate medical devices do not stand up well to heat sterilization. TSO3's sterilization method is faster; it is used with good results in hospitals in Canada.
But until Sterizone has FDA approval, there is a question mark hanging over it. It is not a big question mark because the technology is known to work. But until the FDA approves it, investors tend to stare at their shoes and mutter, "Something might be wrong with it, we don't know what, but. . ." That is the big challenge for biotech investors, learning how to be patient.
TLSR: What about the cardiovascular sector? Do you have any names there?
JL: I really like a little company called VentriPoint Inc. (VPT:TSX.V), which has a $13M market cap. Its Angelo (VMS) analysis system uses ultrasound images to construct images of the heart in 3-D. The device is cheaper and quicker than an MRI scan. The doctor can do the analysis in his office, as opposed to sending a patient to a lab and incurring a more expensive diagnostic procedure.
Ventripoint has been under the radar, but a paper about its work on pulmonary arterial hypertension was just published in the Journal of the American Society of Echocardiography, which gives the device a stamp of credibility. Ventripoint has placed its equipment in prestigious hospitals with researchers who are going to publish more papers. After Ventripoint gets FDA approval, it makes sense that a big company will buy it out.
TLSR: Are there any firms in the arteriosclerosis game that you follow?
JL: Yes, and one of them just announced trial results and got hammered. It is a company out of Calgary called Resverlogix Corp. (RVX:TSX), in which I am keeping my shares. Before the trial results were announced, the price was more than $3/share. After Resverlogix announced the disappointing results for its compound, RVX-208, the price fell to $0.20/share and has bounced back up to about $0.60/share.
TLSR: What were the problems with the trial results?
JL: The RVX-208 trial did not meet its primary endpoint. The trial used intravascular ultrasound to measure arterial wall thickness. The endpoint was not what the firm had projected. But, a lot of the data was trending, and if the trial had run another three months, Resverlogix might have met the endpoint. Now the company is faced with the hard road of pushing that trial rock back up the hill to prove that the compound does, indeed, work. Resverlogix is not a big pharmaceutical company, so it cannot afford to run long trials.
TLSR: Does Resverlogix have enough cash on hand to get through the task of achieving regulatory approval?
JL: It has a variety of cash sources to draw on. The company is obviously not in the best bargaining position with its share price down. But the bigger picture is that the RVX-208 compound is drawn from a whole family of epigenetic compounds that Resverlogix has been busy patenting. Just before it announced the RVX-208 trial results, the company spun out a lot of its intellectual property into a different company. It kept the cardiovascular applications in Resverlogix.
The spinout is called Zenith Epigenetics Corp. It is a private, early-stage company, and it may want to stay private. The shareholders of Resverlogix lost a lot of value when the trial results were released, but they were given shares in Zenith Epigenetics, and there could be exciting developments coming out of that operation down the road.
One thing I look for is how robust a company is—can it bounce back from misfortune? Resverlogix bounced back from $0.20/share to $0.60/share because people figured out that the company is not totally dead. Following that trend, I like an exciting company calledNeptune Technologies & Bioressources (NTB:TSX; NEPT:NASDAQ). Neptune had an unfortunate accident in November 2012: Its manufacturing plant blew up and killed some workers, which is horrible news. Yet today the company's shares are close to where they were before the accident. There is a robust demand for Neptune stock because the market likes the company's products, and also liked how it handled adversity.
Neptune spun out a company called Acasti Pharma Inc. (ACST:NASDAQ; APO:TSX) and, as parent, Neptune still owns shares in Acasti. Acasti Pharma's share prices have been on fire!
Acasti transforms krill from the Antarctic Ocean into a drug. To market a drug, a company must prove that not only does the product not hurt people, it actually helps them. A lot of evidence suggests that krill oil changes people's lipid profile by increasing the amount of good cholesterol and decreasing the amount of bad cholesterol.
TLSR: How does one turn krill into oil?
JL: Neptune has a patented process that crushes the krill and leaches out the oil with acetone. But what's nice about Neptune is that comparable companies are enjoying market caps of well over $1 billion ($1B). The Neptune/Acasti dream is to ratchet up to a high market cap with the krill oil venture.
TLSR: Biofilms are also a hot topic in the life sciences space.
JL: For biofilms, I like Kane Biotech Inc. (KNE:TSX.V). The market cap is about $12M and the stock is cheap. Kane is attractive because biofilms are the scourge of medicine: They feed bacteria that cause infections in wounds. Biofilm-eating bacteria form a protective layer over themselves, making it hard to sanitize hospital equipment. And when disinfectants cannot penetrate the biofilm, they are ineffective against infections. Kane's product breaks up biofilms and allows disinfectants to pass through and sanitize medical equipment. The company recently completed a contract with the United States Army Dental and Trauma Research Detachment to develop an antibiofilm-antimicrobial wound gel formulation. It reduced more than 95% of biofilm-embedded wound-associated bacteria as compared to the commercial wound gel, which showed only a 50% reduct ion.
And recently, Kane has rolled out a product—this will sound a bit weird—for dogs that have bad breath. The smell comes from bacteria and plaque growing on the dog's teeth.
TLSR: Tell us more.
JL: The product is called StrixNB, which is added to the dog's drinking water. It reduces bacteria in the mouth that forms plaque and tartar buildup. Kane does not intend to become a massive manufacturer of the product; the company will happily license it out to a big animal supplier. But Kane did test the market for StrixNB in Canada, and got really good feedback. The product sells well because it works. People happily spend $400/year to scrape and clean their dogs' teeth. This product is cheaper and much less painful for the dogs.
The next leap is that the product will likely work for humans! Animal testing has proven that the formulation is not toxic or harmful to humans. If humans start using StrixNB, Kane will make a fortune.
TLSR: That would be truly revolutionary.
JL: Yes, and it is all under the radar. The bad breath product has been rolled out for dogs, which is a pretty big deal. People spend a lot of money on their pets. But the really big market is humans.
TLSR: If it works for dogs, it should work for humans.
JL: I happen to know humans who use it; I am tempted to try it myself.
TLSR: Let's talk about oncolytic viruses. Can you suggest any names in this space?
JL: A good firm in the oncolytic virus space is called Oncolytics Biotech Inc. (ONCY:NASDAQ; ONC:TSX). The company is based in Alberta and has been around for a very long time. Oncolytics makes a human reovirus, called Reolysin, that it can inject into tumors to kill cancerous cells. Oncolytics has had some good results with head-and-neck tumors, and is conducting ongoing phase 2 clinical trials with partial results released. The criticism is the company is a bit selective in what trial results it chooses to release. But regardless, it has raised a lot of money.
TLSR: What is its market cap?
JL: It is $233M—which is a big number.
TLSR: To close, can you comment on any differences between Canadian and U.S. regulatory approval processes from an investment point of view?
JL: The big difference is that the FDA is the big kahuna, and getting FDA approval takes longer. That is the big challenge for a lot of innovative medical technologies and for a lot of drugs. Approvals in other countries, such as Canada, occur more rapidly. Testing regimes for the FDA are expensive, and involve a lot of bureaucratic back and forth, which tends to stall the evolution of the market cap for small companies.
Just because investors like a product does not mean that the trial results are going to be favorable. Of course, the fact that a medical device is already approved for use in other jurisdictions should deriskthem to a large degree for savvy investors. I simply do not know any examples of products that work well for patients and are cost-effective that were not approved by the FDA in the end.
TLSR: Thank you, Jim.
JL: Good day, Peter.
Jim Letourneau is the founder and editor of the Big Picture Speculator and is a geologist living in Calgary, Alberta. He is an early-stage investor in energy, metals, biotech and technology companies. He speaks at investment conferences across North America.
Want to read more Life Sciences Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.
DISCLOSURE:
1) Peter Byrne conducted this interview for The Life Sciences Report and provides services to The Life Sciences Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Life Sciences Report:Oncolytics Biotech Inc., Verisante Technology Inc., biOasis Technologies Inc. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.
3) Jim Letourneau: I or my family own shares of the following companies mentioned in this interview: biOasis Technologies Inc., Kane Biotech Inc., Ventripoint Diagnostics Ltd., Resverlogix Corp., TS03 Inc. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent.
5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.
The Energy Report (8/8/13) What's the difference between an oil well and a very expensive hole in the ground? Advanced hydraulic fracturing techniques, in many cases. That's why Big Picture Speculator Editor Jim Letourneau is following service companies that are helping producers get to the finish line on time and under budget. In this interview with The Energy Report, Letourneau discusses new ways to play the ever-evolving shale revolution.
Source: Peter Byrne of The Energy Report (8/8/13)
What's the difference between an oil well and a very expensive hole in the ground? Advanced hydraulic fracturing techniques, in many cases. That's why Big Picture Speculator Editor Jim Letourneau is following service companies that are helping producers get to the finish line on time and under budget. In this interview with The Energy Report, Letourneau discusses new ways to play the ever-evolving shale revolution.
The Energy Report: On July 26, George Phydias Mitchell died at the age of 94. The late Texas oilman had pioneered the use of horizontal drilling and hydraulic fracturing. Can you speak about his achievements?
Jim Letourneau: Mitchell was the founder of the entire shale oil/shale gas revolution. For decades, the Texas wildcatters had known that there was gas in the Barnett Shale, but it was very difficult to get it out. Mitchell did not invent the fracking technologies. He just wanted to get the gas out of the shale. And as the owner of an oil company, he got to challenge the technical people. He basically said, "If you guys can't figure it out, I'll find someone who can." He had the power and the money and the persistence to make it work. Mitchell Energy & Development Corp. began working on the problem in 1981, and it took until 1999 to figure it all out. The company sold for $3.5 billion ($3.5B) in 2001! It is inspiring.
TER: Were other companies trying to develop fracking?
JL: The conventional wisdom did not comprehend what George Mitchell was attempting; some folks thought he was crazy. And since some visionaries fail, we need to celebrate the ones who are successful. He grew to be very wealthy as an oilman, but he had also read the book, "The Limits to Growth," and he was very concerned about how civilization is managing the earth's resources.
TER: The extraordinary success of fracking has brought the prices of petroleum products below the cost of production, in some cases. What kinds of adjustments are the juniors that are already producing product in the North American shale field having to make in order to turn a profit, or even to just survive intact until the next boom?
JL: Because horizontal wells cost anywhere from $5–15 million ($5–15M) to drill, the juniors typically need to partner with a larger company. The big companies wait for juniors with nice land positions but not much capital to get desperate; then they move in to strike a deal.
The giant shale plays are not junior friendly, because small firms do not have the hundreds of millions of dollars needed to develop them. Thirty million dollars sounds like a ton of money, but it might only fund two wells. Statistically, it might be necessary to drill up to 10 wells to prove up a play. Typically, it's the majors that develop the new fields, and the juniors try to tag along by capturing acreage in a hot play, and that is often a good strategy. But they can't afford to spend big money to crack the code. They usually look for partners.
Even medium-sized big companies like EnCana Corp. (ECA:TSX; ECA:NYSE) are entering into partnerships with foreign companies and looking for big investors, because the amount of money required to develop these plays is so enormous. In Northeast British Columbia, literally billions of dollars of investment will be required to fully develop the resource. If a junior's land position is compelling enough, it can get a big payday from selling it. The challenge is that there are numerous shale opportunities for major oil companies to pursue and a junior needs an asset that is big enough to move the needle.
TER: For companies with producing wells, what kinds of new technologies are available to increase productivity without hurting already stressed out operating budgets?
JL: There are a lot of technological tricks with minimal costs: A producer can re-enter wells or stimulate wells or fracture older wells. It can enhance oil recovery with pulsed injection of water or chemicals.
TER: How does that work?
JL: A tool installed in the well injects fluids in pulses—pumping like a heart pumps. Think of putting a kink in a garden hose. Pressure builds up and when the kink is released there is a strong pulse of water. This technology is efficient and companies can make money doing enhanced oil recovery with pulsed injection.
TER: What names are on top of that technology?
JL: Wavefront Technology Solutions Inc. (WEE:TSX.V) provides pulsing tools to operations all over the world. It has a couple new business lines with fantastic growth rates. In well stimulation, a chemical (usually acid) is injected into a formation to clean up the area around the well bore so that more oil and gas can flow. By using pulsing, the acid is placed more uniformly and better flow rates are achieved after the stimulation. This part of Wavefront's business is growing very quickly and now accounts for roughly half of the company's revenue.
Wavefront's pulsing technology has been modified for use in performance drilling tools. Fluid pulsing behind the drill bit and drill string agitation dramatically increases the rate of penetration. Reducing drilling time by 20–40% is an easy sell, and the enhanced oil recovery business has a huge market in the field.
In another five years, these technologies will be commonplace, but it takes time since most oil companies are slow to adopt new technologies. It is going to take a few more quarters for Wavefront's revenue to ramp up, but its revenue growth is encouraging and I am quite optimistic about its prospects.
TER: How is its cash position?
JL: It has over $11M in cash. It is very close to being profitable, and it has more than enough money to see it through. The bottom line is that it has a market cap of about $25M and a rapidly growing business.
TER: How is Wavefront's stock performing?
JL: The share price is approaching all-time lows. A couple of weeks ago, I bought more Wavefront shares because it is so cheap. I could be wrong, but the company has staying power, and it is not desperate for cash, so it is a good buy right now.
TER: Where are the best shale oil plays located?
JL: The big picture is there are lots of thermogenically mature source rocks all over the world that are amenable to horizontal drilling and fracking. Typically, these plays do better where there is existing infrastructure and expertise, like Texas. It is harder to do hydraulic fracturing in relatively new areas like Pennsylvania and New York or Europe because even though these regions have a long history of petroleum development, they currently do not have the infrastructure and the regulatory environment to manage fracking. Take the Wolfberry trend in the Wolfcamp shale, for example. It's one of the hottest Texas plays with really good results coming out. And because it is in Texas, there are not a lot of regulation-related delays.
TER: Do you have any names for us in these shale plays?
JL: There is a small Canadian company with a foot in the Wolfberry door called Big Sky Petroleum Corp. (BSP:TSX.V). It has drilled one well that recovered a small amount of oil, but it remains to be seen how that plays out. Right now, Big Sky does not have a lot of staying power on its own, but it does have a big land position. However, with only about $1M in cash on hand, it needs to find a partner or get bought out. That is not an uncommon situation for a small company with a big land position. Capturing the land takes expertise and an upfront investment with no immediate return. The next step is drilling wells that flow at an economic rate. Or a company can wait for other drillers nearby to come in with good wells, which can make it easier to raise money at that point.
I also pay attention to Shoal Point Energy Ltd. (SHP:CNSX), which has big shale play acreage in Western Newfoundland, but since it did not have a lot of cash, Shoal Point partnered with another company that will earn in by drilling wells. Drilling costs a lot of money, and the first well does not always work out. Drilling can quickly turn into a giant money pit.
Generally, the challenge is the continual need to raise capital. It is a grind, but every once in a while, a company taps that gusher and sells itself to a major at a big profit. It just doesn't happen all the time. It took George Mitchell 20 years to figure out what he was doing in the Texas shales; and that is too long a wait for most investors.
TER: Do you have any other names?
JL: There is a hot new play in California called the Monterey Shale. It is world-class source rock. A little company called Zodiac Exploration Inc. (ZEX:TSX.V) has a big land package in the San Joaquin Basin. It has farmed some of it out to partners, and it is getting results. It has about $13M in cash.
TER: Are there regulatory issues in that area in California?
JL: Zodiac is drilling close to Bakersfield, which is an oil and gas-friendly neck of the woods. There are some big majors involved there, like Chevron Corp. (CVX:NYSE). And once a major gets involved in a play, it helps everybody in terms of community relations. Occidental Petroleum Corp. (OXY:NYSE) is also big in that area of California.
TER: What kind of oil price will make shale exploration profitable?
JL: At $150/barrel, we would be booming! But, seriously, even the current low prices are sustainable. There are a lot of moving targets and price is just one of them. There are the drilling and completion costs—and those costs are coming down because companies are figuring out what technologies work best. The oil and gas business is slowly learning how to frack more efficiently. Oil companies cannot do much about the price of petroleum, but they can watch their costs, and that is where the focus is now.
TER: You often talk about the "hype cycle." What is it?
JL: When something new comes along, everybody gets excited about it, everybody wants to try it and then the technological limitations kick in. The challenge is to make that technology better and better. Hype-oriented investors get in during the onslaught of the hype and then sell at the crest. Things decay as people realize, "wow, this is going to take a lot of work!"
With the advent of hydraulic fracturing, there was a big hype cycle: Everybody wanted in on the new thing. Money was thrown at all sorts of shale plays all over the world. Some of them worked out, and some of them did not do well. But the industry is maturing and optimizing the strategies that work. It is a slow grind to make horizontal drilling and hydraulic fracturing economic. But the current price of product is certainly sustainable, and oil companies can make a profit if they keep costs under control.
In the long run, oil production will operate like a manufacturing business. When the price goes up, there will be no shortage of ways to increase production. There is a huge runway, and that will keep the industry in balance for many decades ahead.
TER: It sounds like you're an optimist.
JL: I just do not see a problem in the current situation. With the new industry that George Mitchell created, we are less reliant on coal. Natural gas is a better, cleaner fuel than coal—in spite of the protests and arguments to the contrary. Most people would rather have natural gas-fired electricity than coal-fired electricity for a variety of reasons. Low energy prices are good. It's good for the economy. When we humans run out of a resource, we usually fix the problem.
One good example is the peak oil website, The Oil Drum. It recently stopped adding new content, because the peak oil argument is the same thing repeated over and over. The argument is that there is a finite amount of oil and we are going to run out of it and the consequences will be dire. But when there is a new discovery, the oil peakers have to pick it apart and say, "oh, it's not that good because these wells decline quickly" or, "the environmental impact of this is too great." They are continually negative about new developments that increase supply. And it's fair to be critical. Good business practices include environmental impact and looking at how resource development best serves all of society.
But the big picture is that we have bought ourselves a lot of time with horizontal drilling and hydraulic fracturing: we will not run out of hydrocarbon fuels, and we will be able to make a nice transition into cost-effective alternative energy during the next 10 or 20 years.
TER: Given the high costs of exploration, is there going to be a collapse of the junior sector?
JL: There has already been a natural winnowing out of a lot of juniors. It used to be that a junior with a small amount of money could develop a play to the point where a bigger company would buy it out. Now the bigger companies have all kinds of options to pursue, so they're less interested in small acquisitions and they have just as many ideas as the juniors do.
The challenge for a viable junior is to have a play in the top quartile. The odds are stacked against junior explorers. But if one of them ties up the right land, then there is an exciting payday for all involved. The key challenge is how to crack the code for the least amount of money.
TER: How can investors determine which of the small firms has the best chance of success?
JL: That is unknowable, because there are a lot of variables. The ideal situation for an investor is to hold a diverse portfolio of juniors. There definitely are attractive companies out there and they all have the same story: "We have captured acreage, and there are lots of hydrocarbons in place, and we have lots of science to support that it is valuable." And sometimes they have big companies playing right beside them, too. But advancing the story to where there is a payday for the investors is a long road.
I'm not being negative, but realistically, it's not easy right now for the juniors. They need their plays to look shiny and pretty. They need people to get interested. And there are so many shale plays out there that it's hard to stand out.
TER: Thank you, Jim.
JL: You are welcome, Peter.
Jim Letourneau is the founder and editor of the Big Picture Speculator and is a geologist living in Calgary, Alberta. He is an early-stage investor in energy, metals, biotech and technology companies. He speaks at investment conferences across North America.
Want to read more Energy Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Interviews page.
DISCLOSURE:
1) Peter Byrne conducted this interview for The Energy Report and provides services to The Energy Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Energy Report: Zodiac Exploration Inc. and Big Sky Petroleum Corp. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.
3) Jim Letourneau: I or my family own shares of the following companies mentioned in this interview: Wavefront Technology Solutions Inc. and Shoal Point Energy Ltd. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: Wavefront Technology Solutions Inc. and Shoal Point Energy Ltd. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent.
5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.
What is the POTUS likely to do given that the UK has bowed out of a coalition style response?
The president walked into the room and watched a talking head explain knowingly to his audience why he, Obama, had taken some action. “Oh, so that’s why I did it,”
Read the Vanity Fair article, Obama's Way (by Michael Lewis) for some clues. It provides a fascinating account of how Obama led the US to intervene in Libya during Qaddafi's last days.
If you've been a mining stock investor over the last few years you'll know all about sinkholes.
Sinkholes occur naturally with a regular frequency. What makes this sinkhole a bit more interesting is that it is associated with the Texas Brine Company's solution mining operation in Bayou Corne in Louisiana. Check out the Wikipedia entry. If you really like sinkhole disasters, Lake Peigneur was a doozy!
In the fight for eyeballs, snark and lists tend to get attention so variations of the title "The Top 10 MOST OVERRATED TOURIST ATTRACTIONS IN THE WORLD" is a surefire winner. I'm still a sucker for list articles even though I should know better. They lend themselves to click generating slideshows which are a time waster. Why Google isn't doing something about this instead of making fake meat is a travesty. Back to the lists! I had to keep score on these. I've seen the Mannekin Pis, Las Vegas, London Eye, San Francisco Cable Car, Hollywood Walk of Fame, Fisherman's Wharf and a Madame Tussauds Wax Museum. 8/10
Looks like there's some creative theft happening with this theme.
10 Terribly Overrated Destinations (And Where To Travel Instead) I've been to Buenos Aires, Costa Rica, Colorado, Vancouver, The Caribbean, San Francisco. 6/10. To my credit I've been to 7/10 of the alternative destinations.
Top 10 most overrated cities in the world I've been to Orlando, Niagara Falls, and Los Angeles 3/10
10 Most Overrated Attractions in the World I've seen The Las Vegas Strip, been on the London Eye, The Hollywood Walk of Fame, and Loch Ness. 4/10
I'm hoping to add a few more overrated sites to my travels along with some lesser known gems.
