Big Picture Speculator

New Blog

I am moving my posts over to www.jimletourneau.com

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Looking Back

Remember when Ralph Klein was only a mayor and being the "Texas of Canada" was a bad thing? No mention of the "scarsands" back then.

The year was 1987 and...

High Oil Prices and the Global Economy.

It's kind of ironic that in this time of globally reduced petroleum supplies that the countries with the greatest increases in oil demand are offering their citizens subsidized pricing. George Soros recently spoke about this point in a BBC interview.

Today the BBC provides a global overview of how high oil prices are influencing the global economy.

For comparison, here's how gasoline prices vary across the USA (courtesy of gasbuddy.com)

Nuclear Power - Points to Ponder

Current events have conspired against the latest Wired proclamation.

Face It. Nukes Are the Most Climate-Friendly Industrial-Scale Form of Energy

Meanwhile the BBC just ran a "hat trick" of nasty nuke stories.

1. Sizewell Shut Down
2. Nuclear clean-up costs 'to soar'
3. UK submarine hits Red Sea rocks

What do you think is best for our little blue planet?

Wavefront Working Wonders

Hammer Time?
I've been a proponent of Wavefront's (WEE.V) Powerwave process for some time. It's been a
wild ride for Wavefront shareholders but there was some major news released last week that points to why I've been such a supporter of this company (full disclosure, WEE.V is my largest personal shareholding and I purchased more shares last week).

While I'm a big believer in technical analysis, Wavefront has been a situation where technology
trumped the share price and I've been taking a longer term view. However, yesterday gave us the best of both worlds, additional verification of the Powerwave process and a nice hammer candlestick pattern*.

I’ve been researching EOR related opportunities for several months and the one thing that
strikes me is the defeatist attitude of some of the Canadian commentators and researchers
in the field. The litany of negatives usually boils down to the following:

1. An absence of incentives for the oil industry to capture and transport CO2 to eligible
reservoirs. Denbury Resources makes a good living transporting CO2 from a natural source reservoir to old fields in Mississippi and they are now tying up industrial CO2 sources.

2. The patchwork nature of land ownership and difficulties in forming units because a producer that injects something into a reservoir may create a benefit for adjacent producers. Powerwave can be deployed on a single 40 acre pattern for $3000/month.

Here is a great case study as to the value of Wavefront's technology:
• On June 26, 2007 Wavefront announced that Encana would be installing 3 Powerwave
tools in one of their Alberta oilfields that was under active waterflood.

• On October 7, 2007 Wavefront announced that the tools were installed.

• On January 15, 2008 Wavefront announced that Encana was seeing a direct pressure
response in the reservoir, often with increases in fluid production rates, increased
casing head pressures or fluid levels in wells, and in a number of cases increased oil cuts
and/or oil production rate.

• Yesterday, Wavefront announced that oil production from the three patterns increased
by 57 barrels of oil per day (bopd) (11 cubic metres per day) from 132 bopd
(21 cubic metres per day) to 189 bopd (31 cubic metres per day). The increased oil
recovery is apportioned to 15 producing wells in three production patterns where the
technology is actively deployed and further upside potential may be realized by increasing
gross fluid production.

In other words PRODUCTION INCREASED BY OVER 40%. In addition, the injection volumes weren't optimized. The potential exists to increase injection volumes and overall recovery.

Wavefront leases the Powerwave process for $3000/month per installed tool so Encana's
costs to produce an extra ~1700 barrels of oil per month is $9000. Would you spend $9000
to make an extra ~1700 barrels of oil per month?

Let's take this a step further, if you were a shareholder in a company with an active waterflood
project, would you not be demanding that they evaluate using the Powerwave process? Big picture thinkers will be looking at the impact implementing Powerwave will have on the reserve evaluation reports of old properties.

At Wavefront's last AGM they presented a "hypothetical opportunity"

An oilfield with 3000 injection sites at a 40% penetration rate = 1200 Powerwave systems

• Revenue potential of $3.6 million/month, or $43.2 million/annum
• Gross profit potential of $3.2 million/month, or $38.9 million/annum
• Payback on tool capitalization within 2 to 6 months

The pool that the Powerwave Dragonfly tools were deployed has 200 injectors. More importantly,
there are 167,000 water injection wells in the United States. If Wavefront can convert
their "hypothetical opportunity" which is backed by solid verifiable field data from a major oil company, they will soon be a billion dollar company.

*The Hammer is a bullish reversal pattern that forms after a decline . Checkout Stockcharts.com for more information.

We would also like to point out that Greentree Gas and Oil (GGO.V) has been applying
Powerwave to the Rodney South field in Southern Ontario and results from that installation
are pending (I am a shareholder and investor relations consultant to GGO.V).

I'm a shareholder of WEE.V.

How much Bakken potential does PanTerra (PAN.V) have?

The following is taken from a recent interview between David Pescod (D.P.) and Fred Rumak (F.R.), President of PanTerra Resource Corp.

D.P: Well let’s pretend you are dreaming late at night, of the million acres, what percentage do you think is potential Bakken?
F.R: About 20%.
D.P: That is still a big chunk of land.
F.R: It is. It would work out to be approximately 160,000 acres.

I'm a shareholder of PanTerra (PAN.V)

George Soros on Oil Prices

1. Increasing costs of new fields and depletion of old fields
2. Backwards sloping supply curve - the higher the price goes the less incentive the oil producing countries have to convert appreciating underground oil reserves into above ground dollar reserves which are depreciating.
3. Subsidies in countries with growing oil demand.
4. There is plentiful speculation which is increasingly affecting the price. The price has a parabolic shape which is characteristic of bubbles.

Click here to listen to George Soros talk about the price of oil.

Check Out the Newest Elvis Costello - US Only

Energy TV Appearance

I'll be showing up in an enhanced oil recovery feature by Energy TV’s Shayna Nackoney.

It is set to air Saturday at 11am on Global TV across the country.

Coming Soon

I'm in the process of moving my blog to a new domain name... JimLetourneau.com. I'll keep you posted as things progress but for now posts will show up here. At some point you'll be redirected to the new site.

Costa Rica - Pura Vida

Costa Rica is famous for its ziplines. One of the more scenic adventures would have to be the SkyTram/Sky Trek tour in the shadow of Mt. Arenal (an active volcano). The guides take camera's from the participants and film videos while screaming down the ziplines. I've picked one that was representative of my trip. As you listen to it you'll soon understand how the term zipline came to be.

• 2.8 km of zip lines
• top speeds of 70km/h
• 300 meters above the jungle facing an active volcano

I've had my adrenaline shot for the week. I didn't turn my head to enjoy the views until I was safely onto the next platform.

What do Doug Casey, Rick Rule and Robert Friedland have in common?

Darrell Brookstein

That's correct, Nanotech Fortunes author, Darrell Brookstein, has forgotten more about mining than many us will ever know. His book has numerous market lessons gleaned from the mining side of the business.

That is why you should listen to PART 2 of our interview with Darrell

Friday's word of the day...

Is coprolite.

A recent auction of cool geological items led to the sale of a nice piece of fossilized poop while a pricey meteorite went unclaimed.

Not to be sniffed at: dinosaur dung fetches twice the estimate at auction

Pickens' Prediction

Boone Pickens has some thoughts on the global energy:

Oil price has to rise because of global demand

Well worth a watch.

Interview with Darrell Brookstein - Part 1

Part 1 of an interview with Darrell Brookstein, author of Nanotech Fortunes
and Executive Director of Nanotechnology.com

Listen to the interview