IVAN - DD and reason for spike on volume
Dr. John L. Faessel ON THE MARKETDr.Faessel@onthemar.com
"Most" highly disruptive technology From my "Best Idea list for 2008" (IVAN)
A WORLD AWASH IN OIL - HEAVY OIL Ivanhoe Energy (IVAN) $1.50 Nasdaq Market-Cap: $364 million (IVAN) has also been on my "Best Idea" list before.
It is my belief that sometime soon a major player will adopt this technology and then the story will gain significant if not huge interest: and the stock will move accordingly.
As I understand it (IVAN), as part of their proposed deals, is asking for a percentage participation, (i.e. joint venture) in the oil producing property. This fact has likely been the reasons for the delay in closing one of the several deals I hear are in the works. I believe that (IVAN)'s "legendary" management truly understands the value of their technology and wants to be compensated with an "oven and above" equity position in the producing project.
I became enamored with this story in 2005 I attended a couple of day 'road show' out to Aera Petroleum's (Exxon and Shell joint venture) Belridge oilfield where I visited the onsite (IVAN) heavy-oil to light-oil 1000 barrel a day demonstration facility in Bakersfield, California. With $95 crude and a developing major shortage of the 'light-oil' variety - the market for a conversion solution to this ever increasing and no end in sight predicament is indeed mind-boggling.
THE GLOBAL PROBLEM:Federal Reserve boss Alan Greenspan back spoke about the world's energy crisis and heavy oil a couple of years ago - not much has changed since then except the situation is obviously worse as Crude has ticked $100 a barrel.
Notably per Greenspan: Crude oil prices are being distorted by shortages of capacity (the ability) to upgrade the higher sulfur content and heavier grades of crude oil. Two thirds of global output is heavy oil and the price difference between West Texas Light and the heavy stuff is a huge $17 a barrel. 70% of the known world deposits are the heavy crude (15%) or the extra heavy (55%).
The Ivanhoe (HTL) process brings a three-fold economic improvement to heavy-oil projects. The heaviest hydrocarbon fraction is consumed as fuel to generate the steam used to enhance recovery of heavy crude. Importantly this lowers costs by reducing or eliminating the need to purchase high-priced natural gas for steam generation and improves revenue since the higher quality light-crude fraction can be sold at significantly higher prices. The lighter crude has vastly improved viscosity and that permits more efficient pumping through pipeline networks and significantly reduces transportation costs to marketing points. As an example of the natural gas for steam generation predicament, the cost of power to generate steam for the Aera, (Belridge) oilfield that I visited in Bakersfield is $1 million a day. The power is generated from natural gas that is piped in from Canada. Natural gas is expensive, in short supply and in brown-out situations the supply can be cut off completely. Also highly significant: These smaller 'satellite' conversion facilities are inexpensive to set up, use off-the-shelf components and can be deployed to remote sites with relatively small installations. And the project financings should be easy & non-dilutive.
This post is not a pump.
It is a statement of FACTS
that may lead to success with HTL marketing.
Worth remembering.
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