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I agree all clues point to green. Just wondering the reference to maybe raise more cash in 2015. Is this a tactical statement inorder to say we do not depend on the decision of 1 customer, we take all measures to insure our future ?
Kindermorgan is up 10% (KMI) and 18% (KMP) today. And STWA has a deal with them ...
http://www.transcanada.com/oil-pipelines-projects.html
Key areas of focus include greenfield development options to connect our natural gas pipelines to northern gas reserves and emerging Canadian and U.S. shale gas supplies, and transporting crude oil from the Alberta oil sands.
and "tough" too ...
When the time comes, we should not forget to thank him...
Don't forget our management has a military background,
We can guess that after October 15th, there will be another agreement (or contract ...) as tests will have been completed and TC is not going to live with 1 AOT. They need tens of them. I am not even sure we should hope that TC will buy this one. 1 AOT bring a flow increase in the order of 10% divided by 100, i.e. 0.1%. The bigger picture is to get those 10%. STWA may have a better use of those 4 skids if they have several NDAs lined up. TC may want to make a global order, and I am sure they will have some modifications to make. TC and STWA are in business, they talk to each other, they negotiate, and they accommodate each other's need.
Reading again, I confirm my feeling that TC apparently gains no value in giving notice on july 15th, as they could have waited until the natural expiration on October 15th. I am then drawn to conclude that STWA gets a value in this early termination, and that there is something else behind the scene.
As already pointed out, just a reminder that the option to purchase is not terminated until October 15th ...
Please be advised that Contract 11124 relating to the Equipment Lease I Option to Purchase Agreement between STWA and TransCanada Keystone Pipelines, LP is being terminated effective October 15th, 2014.
The justification for the early termination is due to the project working to expedite the required testing and believes the full term of the lease is unnecessary to successfully complete testing.
The justification for the early termination is due to the project working to expedite the required testing and believing the full term of the lease is unnecessary to fully complete testing.
I must say the picture of the herd following their shepherd to greener pastures made me smile...
given all the negativity, I am quite sure the buyers of 1 million shares in about 3 trading days, know what they are doing...
He left for personal reasons, but he certainly is proud of his work at STWA, not hiding from it, reading his Linkedlink page.
very good analysis. and I suspect also the trial period was necessary for other than technical reason i.e regulatory/safety, hence the wording "required" testing. Let's not forget that TC has participated in the conception of this device for many months, and they knew beforehand if it would be working. Next phase is PR and growing the investor base.
People are selling and people are buying ...
Trying to dissect and get some clues, I was wondering about the word "required" as if TC had to do it for some reason (regulatory or else) whereas they would not have minded skipping this step.... hahaha just dreaming about my new Ferrari....
“The justification for the early termination is due to the project working to expedite the required testing and believes the full term of the lease is unnecessary to successfully complete testing.”
The reasoning based on the additional profit made by the pipeline (4$ x number of additional gallons) is I think understating the fact that the oil producer is also gaining thanks to the AOT (100$ x number of additional gallons) that would not be pumped out of the ground if it could not be transported.
But if we stay with the conservative reasoning (only considering the pipeline economics), it is true that the leasing formula has many advantages one of them allowing an easy calculation of the pps.
Using the figures of AISI :
42 skids x 12 months x 60,000 $/month = 30 million $/year of revenue for STWA. Profit of 70% = 20 million $/year
Price/earning ratio of 20 means pps of 2.3 $.
This is only for one pipeline, so for 10 pipelines, you have pps of 23$.
NOTE : the 30 millions $/year above can seem a bit high compared to the pipeline revenue of 73 millions $/year , but this is where I would factor in the contribution of the producer for this additional volume, which could be for example translated to a 6$ price/gallon for the additional volume, a small premium ("royalty") compared to the 100$/gallon of increased revenue.
There is no need to read between the lines. Just read the lines.
"Increase the total flow volume per day of an existing asset by 10% to 15%"
And guess what is the EXISTING asset that the AOT has been hooked on for 4 months ?
To state this AFTER a 4 months test with TC is AWESOME !!!!!
Spot on. The termination letter was just to allow next in line to be able to sign and install an aot.
Many underestimate the difficulty to extrapolate the effect of only 1 AOT on a whole pipeline. If for example you theoretically need 100 AOT to outfit an entire pipeline and create a 10% increase in flow, 1 AOT would just create 1/100 of 10% which is 0.01% of flow increase (even if some cannot fathom the continuous nature of this hydrodynamics effect). If you put your AOT at a chokepoint you could see a better increase, but still only in the 1% range. Add to this the other parameters such as temperature and oil types. The KM 1 vessel AOT will bring new datas as the scale is smaller and maybe also the length of the pipe which could increase the perceived % effect. It is on those extrapolate results that the pricing will be made. I am certain that the AOT testing exceeds expectations, but the extrapolation difficulty remains. So no worry for a fews extra weeks of testing ...
I notice there is no data capture on KM contract and i guess they are sharing the datas of the 1st aot
-the 2 filings happening the same day
- kinder morgan inviting Stwa along with many potential customers to the conference
- the new filing being about a different scale AOT with Kinder....
All this suggest to me that STWA, TC, and Kinder are collaborating on the figures, and sharing the testing load.
The AOT testing has always exceeded expectations, and those latest news must be read accordingly. The words "working" and "successfully" in TCs 8K are quite clear.
When oil producers and transportation entities deploy the AOT system on their pipeline pumping stations, crude feedstock moves with less drag resistance, speeding the flow of oil while achieving greater operational efficiencies. The STWA AOT Viscosity Reduction System allows producers to increase the volume transported per pipeline. By using the AOT system to move oil through pipelines at all-time rapid speeds,
Mr Bigger is an exceptional manager who is on top of his business. He knows that some small shareholders are concerned by the share price, and he receives a lot of abuse by mail or phone. He is not going to get distracted. Business first, and then the pps will follow. The AOT is exceeding expectations. I am very grateful and honoured to have such leadership for stwa.
Today is a good day : France is winning 3-0 against Switzerland in Salvador de Bahia, and zero is up !!!!
There is no doubt that Sano is right when he says that only an order will matter. Who can deny that. Problem is that he twists it into suggesting "he does not believe it will happen", but not really saying clearly anymore that he does not believe. Remember he did not believe the AOT would be built, then connected. He did not believe in the viscosity reduction and flow increase and now he admits it could work in "chokepoints". He will readily insist it can decrease pump energy needs, because it allows him to downplay the flow increase effect. He is an intelligent guy and by following the evolution of his logic, you can almost follow the progress of the AOT ...
I don't believe the NDA between STWA and its customer other than TC is also signed by TC, but that there is a clause such as : "the AOT is currently under testing by TC, and the pricing, and timeframe for delivery, will depends on such and such parameter which will be determined by the test outcome". That's why I incorrectly called it a trilateral agrmt.
---- and in the agreement between STWA and TC, there is a clause such as : subsequent timeframe and pricing with other customers will be determined by the test outcome-------and TC will get this and that because TC has helped develop the AOT.
As I said in my post of may23, I believe all NDAs mention and are subject to the TC test results. They are "multilateral" (or rather tri-lateral) agreement and not bilateral, because :
- TC has a stake on the hardware,
- the pricing depends on the results of the test by TC,
- no other pilot would be done on another pipe in parallel with TC, as this would seem quite stupid and counterproductive ...
So the "product" (hardware and price) is not yet totally defined. You cant sell (execute an NDA) for a product that is not totally defined, until the pilot is completed.
That's why I believe that if test is successful, the orders will be made all at once from the various NDA's company, and that the priority on delivery is already set in advance.
For my part, it just reminded me of another post here a few weeks ago, about this stock that did not really move (except slow downward slope because of the MMs doing), and that would explode upward should real buying occur, even on moderate volume.
TC has been involved in the development of the AOT2 with X engineers for Y months. Yet, many people here doubt that this device cannot be installed on another company without some kind of involvement of TC which might be spelled in the NDA (unless you think that each company will have its own version of the AOT). The NDAs might also not be bilateral NDAs but multilateral one, with STWA as the provider and TC as a stakeholder. And also, for all this to be actionned into contracts, all NDAs must wait for the unique pilot results, which will scale the profitability of the device, and then its pricing... Just my opinion.
I think some chem reduction might take place but
Then you have not heard much. It is a classic advice for many investing styles (except trading). Do your DD, then let management work. We do watch the stock daily here but more for the entertainment ... As they say, "the stock does not know you own it"...
NDA
Trying to guess about the reasons/content of the NDA with TCP and the 9 others.
- regarding the other 9, reason seem clear to me : TCP has a stake in the development of the AOT (20+ engineers involved @ connection to 1st pipeline Keystone), and will have an interest in the subsequent sales. Therefore I think the 9 will have to wait for the completion of the pilot.
- regarding the context for TCP : very clear also : political, competition, dealing with a small otc company --> need to have proven results as Zerosum said.
- regarding the AOT itself : waiting to complete the pilot tests, or at least be sufficiently advanced to make a decision. This decision will define the number of AOT to order / will give TCP the advantage of being 1st in line for fabrication / price of the AOT for other customers to which TCP may have an interest will depend on the figures from the pilot.
The more I think, the more I believe it could not have been done without NDAs.
As all will derive from the results of the pilot, I am prepared for an explosive rise. There is also the possibility of bad results. I don't really believe there will be another pilot on another pipeline in the meantime. This can happen anytime. Just my thought.
Or rise like a phoenix ....
Agree ... 190,000 shares is nothing. 1/1000th of the float. It is not reasonable to draw a conclusion about an unsuccessful test ... you would see much bigger movements. But it would reasonable to say that a few in the know are buying for a good reason.
Bought 10,000 at 0.7 should I be happy ? mmmmmm
Filled Buy 10000 ZERO Limit 0.70 -- -- 11:43:50 05/23/14
certainly some kind of conspiracy
Thanks, I am 52 and you'll have time to catch up. Maybe read a few good investment books, so you wont focus too much on the share price at this stage of STWA.
(I wish I got interested in investments at 24 !)
I have now 150,000 shares at average cost 1.01 and I am very confident about the future
just bought 10,000 between 0.749 and 0.76 took 20mn
I think they are aiming for the 2$ mark. So they don't want their PR to fall on deaf ears ... logic no ?