“Secret Discovery in Utah Puts OPEC On Notice” Oxford Club

This one is all about the coming electricity crisis, and the coming “post oil” era when new energy sources will be in high demand. The teaser is for the Oxford Club, which is a newsletter service to which I know quite a few Gumshoe readers subscribe.

They have a special report for you: “Drilling for the ‘New Oil’: One Company Who’s Single-Handedly Solving the Energy Crisis” — and they’d be happy to send you that report if you sign up for their lifetime membership.

The Gumshoe, of course, requires neither a lifetime membership nor even a modest contribution (though he happily accepts them) to snoop out the name of the company teased. He only asks for a few moments of your time, and a bit of patience as he chews through the clues.

The Oxford Club has a good, compelling story for us:

“Unfortunately, the oil’s running out, and the good times are coming to an abrupt end… unless something can be done immediately. By 2050 – at present rates – China alone will consume all of the world’s oil.

Cars and trucks will stop… Trains will sit idle… This country – and the rest of the world – will screech to a halt. Business will suffer, and the economy will come to a standstill.

But the ‘new oil’ – the fuel for the growth of the new millennium – is right here in the U.S. where there’s more of it than anyplace else in the world. Few companies are tapping this virtually endless source of energy, but all that’s about to change. “

And there’s more! How ever did they find such a fabulous idea?

“It all started when a fellow Oxford Club member approached Investment Director Alex Green at one of our recent chapter meetings.

He told Alex he was a major investor in a little-known, Utah-based energy company… and he described an opportunity that was so incredible, Alex felt he had to call me to get my opinion.

I couldn’t believe my ears… I can’t remember another opportunity in the history of The Oxford Club that was as potentially as explosive – and lucrative – as this one.

Time was of the essence, however, as the company’s huge revenue stream hadn’t yet started, but was about to begin.”

So how about some specific clues?

Well, first of all, they do at least make clear … eventually … that this “new oil” is geothermal energy. In essence, instead of drilling for oil they believe we’ll be drilling for hot water to spin turbines.

We’ve seen lots of geothermal teaser companies in the past year, one or two of which have done well, so this is, at least, no shot out of the blue … but there aren’t all that many companies active in this business in the U.S., so it shouldn’t be too hard to do our figgerin’ here.

Here’s what the Oxford guys say about geothermal in general:

“You see, there are large volumes of hot rock accessible in most parts of the United States… more than anywhere else in the world… and it’s just waiting to be tapped.

“Geothermal plants are cheap… $32 million… and can be built in as little as 12-18 months.

“Dozens of companies are scrambling to get in on geothermal… but there’s one that has millions of acres of land, and will be generating power (and healthy returns for early investors) in just a few short months.

“Industry growth is ‘the most aggressive we’ve seen in 25 years,’ says Louis Capuano Jr., chief executive of ThermaSource, LLC.”

OK, so we’re all on the same page … hot magma powers turbines, supplies electricity, is cheap and environmentally friendly … the company, please?

Should be just a few more paragraphs now, hang on!

“THIS COMPANY HAS BEEN QUIETLY BUYING THE GEOTHERMAL SITES NO ONE ELSE WANTS… NOW IT’S ABOUT TO PAYOFF IN SPADES … With all the attention – and money – flowing to the ‘hot steam’ geothermal sites, little attention has been paid to warm-water geothermal fields… thought to be useless for generating power.

“But the CEO of this company – armed with USGS field data, and the technology from his engineers and scientists – is acquiring all the warm water sites he can get his hands on. Many of these agreements are off-the-radar, private deals, negotiated directly with the landowners.

“And now it’s paying off in spades: the company has access to over 3 million acres available for geothermal project development… and the technology to make it all happen.

“But time is of the essence on this opportunity. Already, long-term power purchase agreements have been inked – and more are being negotiated – with customers who are lining up to snap up all the power this company can produce.”

So … warm water geothermal technology, in Utah, 3 million acres? The Thinkolator tells us that this must be …

Raser Technologies (RZ)

No, they don’t make those little scooters. This is a company that has focused on both geothermal power and on electric motors, which are linked by some kind of new generator motor technology whosywhatsit.

I’ve written about this company before, back in February for a teaser from a different newsletter, and it seems to me to be pehraps more of a gamble than the best-performing traditional geothermal company we’ve seen so far, US Geothermal (which is also far from profitability — but it had a huge run to near $5, got listed on the AMEX with the new ticker HTM, and fell back down to under $3), or even than the now-out-of-bankruptcy Calpine, which uses geothermal for some of their power generation in California.

Raser has lots of stuff going on — they’ve apparently been ordering more geothermal plant equipment from United Technologies, licensing their technology, they tell us, and designing new plug-in hybrid engines, but they are primarily being pushed as a developer of geothermal plants in a few states, from Utah to Oregon. They do have leases for lots of land, partly because each plant requires a pretty large underground footprint to be effective (neighboring plants that are too close would siphon each others’ heat). Most of the plants that are currently on “fast track” developments are teensy, compared to any conventional power plant (in the neighborhood of 10MW).

I’m not sure how their technology works — something about small, modular plants and use of innovative materials and/or generators that can work with water that is just barely above the boiling point (they’re drilling now on several sites and finding temperatures in the mid-200 degree area that they think will be effective, which is much lower than the 400+ degrees that most geothermal generators would prefer).

If you’re interested in reading further, the company has been pretty well covered — here’s a recent interview with the CEO that includes a good basic overview of the company, and the most recent earnings call transcript. The most compelling negative case I’ve seen about the company comes from the 10Q Detective, a fellow sleuth who does a great job digging deep into the filings of the companies he covers. I commend his site to you even if you don’t care for his take on Raser.

Personally, I’d feel more comfortable with more traditional geothermal projects that have been proven for many years … but even most of the new developers in that area aren’t making money yet, so I’d probably think first about the big ones like Calpine (CPA — just came out of bankruptcy, don’t give too much weight to that trailing PE of 3), and second perhaps about the plant builders like Ormat (ORA — really expensive, but at least profitable) or the generator makers like United Technologies (UTX — though geothermal is a teensy part of their infrastructure businesses). But maybe I’m just being a wimp.

This is not a recommendation to buy any of those companies, of course, just a little window into my thinking on the sector, right or wrong. I don’t own any company mentioned here.
So what do you think? I know there are plenty of geothermal fans in Gumshoedom … does this get you all hotted up, or do you feel a bit of a chill?

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42 Comments on "“Secret Discovery in Utah Puts OPEC On Notice” Oxford Club"

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destry
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destry
April 30, 2008 11:33 pm

Has anyone ever made a profit investing in geothermal?
You’d think it a “Can’t miss”.
For some reason a geothermal stocks just can’t seem to make the distance…I don’t even bother with them. As long term an investor as I tend to be…Even buying geothermal for your grandkids might be straining longevity.

spreadtrader
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spreadtrader
May 1, 2008 5:26 am

The chart is unimpressive…..can’t they do better than that for a lifetime membership? And of course, “time is of the essence”. When you hear people talking like lawyers it’s time to run……..the other way.

fireandice
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fireandice
May 2, 2008 9:30 am

Having lived in Iceland, where geothermal is how everyday energy needs are met (and the runoff made into an incredible tourist attraction), it amazes me that the US can’t manage to capitalize on its geothermal resources. What does Iceland know about producing geothermal energy that we don’t? Or is it just that everything is so expensive there to begin with?

themayor
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themayor
May 2, 2008 9:47 am

Calpine symbol is CPN………They also have a symbol CPNCW that trades today at 68 cents per share…..Does anyone know what this is?

Elissa Stein
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Elissa Stein
May 2, 2008 10:00 am

To themayor: CPNCW are warrants and can be redeemed for stock. This is on the pink sheets. Hope this helps.Calpine is going through some bankruptcy proceeding, I think. I wouldn’t touch this with a ten foot pole.
Good luck to all. Good trading!

Vaag 2
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Vaag 2
May 2, 2008 10:00 am

GUM-(nothing to do with geothermal)–I love your website because of the remarkable quality of your writing. Interesting, original, creative, and a lot more. Astonishing syntax. Thanks!!!!

EYOUNG
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EYOUNG
May 2, 2008 10:47 am

Elissa, Calpine has been out of bankruptcy now for a couple of months, and the stock is seemingly grown stronger the further down the road it goes. Personally, I like what I am seeing with it, but do need to do more DD on this one.
AND yes, I have to agree with Vaag 2,,, Gumshoe, you are worth more to me than all the newsletters printed. Thanks, Fella, for a Job well done. Keep up the good work; You are sorely needed!

SageNot
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SageNot
May 2, 2008 10:54 am
Yep, beware of those Oxford Club “white papers,” they hung me good with USU, the company that The Oxford Club claimed the US Gov’t was backing with $8 BILLION $$, that’s not a misprint, $8Bil.! http://finance.yahoo.com/q/ta?s=USU&t=2y&l=on&z=m&q=l&p=m50,m200&a=&c= The report was from Q4, ’06, so you can see what a bath us Oxfordians took on that bomb! Alex is too smart, too polished t/b in this mktg ploy type company you’d think, but look at what he charges for his high class products, & you see that fishing in the $79./yr client pool can get you millions from subscribers that upgrade with… Read more »
WALTER O'ROURKE
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WALTER O'ROURKE
May 2, 2008 10:55 am
I recently looked into a firm named Constitution Mining Corp. 6139 South Rural Road, Suite 103, Tempe, Az 85283 Ph:480-820-5877 and 480-237-9985. Now I am receiving email and personal phone calls to let me know what the firm is doing and how super splendidly well everything is with the firm… I am happy for them but did not buy… Is this a new type of promotion directly from the firms which bypasses the newsletter hype and delivers their hype directly? They claim to be holding their assets in gold and silver not paper currency (Dollars) which with the relative change… Read more »
Bluebonnet
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Bluebonnet
May 2, 2008 10:55 am

Thanks Gumshoe. I appreciate your insights. I subscribe to Jeff Clark’s Advanced Income from Stansberry and a few other email stock advice newsletters. I always check your columns to get the whole scoop! Louis Navillier seems to be the only one who doesn’t try to sell me more newsletters using the one I subscribe to. Thanks again! You provide a GREAT service.

Brian B.
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Brian B.
May 2, 2008 11:30 am

Thanks gumshoe for your insight on RZ. Just wait Bluebonnet, Louis Navillier will send ads for other newletters eventually. On a positive note : Louis N. did make me money from some of his aggressive growth recommendations. He would then pull the recommendation or state HOLD on it and thats when I relied on my chart information for a sell signal. NSANY was the stock and Nissan was just introducing the Z350 or is it 350Z and the Frontier truck. The truck has greatly improved as well as the car after 2006. Good investing!

SageNot
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SageNot
May 2, 2008 11:32 am

Louis Navillier? You have t/b kidding Blue, Lou must have a dozen newsletters by now, at least one costs $5K, or did awhile ago.

Google him, have your abacus handy, Lou used to allow AG Edwards, among others, to offer his managed accts. services, that BOOM you heard after the Tech bubble burst were the bomb shelters his faithful found shelter in, right Gumshoe?

Ole Berentson
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Ole Berentson
May 2, 2008 1:04 pm

I’m not getting any responce about my inquirey on
(AETE), do’s anyone thing they’ll come back? I hear
said: (don’t case the stock) what does that mean? I
guess the tells you what a rookie I am.

MikeTheKnife
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MikeTheKnife
May 2, 2008 6:29 pm
Re: RZ and geothermal power generation: The plants are subject to incredibly corrosive stuff in the water they suck up, and they emit H2S, the gas that smells like rotten eggs and is also somewhat poisonous to humans. Plants have been tested in Hawaii (Big Island, near the active volcano) and we looked at it 10+ years ago. Maybe things have improved by now, but then it was nasty. Re: Louis Navellier. I was a managed subscriber to his service with an account at Dain Bosworth (Now Dain Raushcer RBC). The ONE THING he didn’t do was to SELL when… Read more »
Donal McNally
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Donal McNally
May 2, 2008 8:22 pm
For one reason or another, I am constantly bombarded with these “wonderful” newsletter offers. After reading and researching them for two years, I now trash them unopened. The Oxford Club is a great moneymaking machine for its operators. It looks like they charge the BS-peddlers to pump out their stuff and then charge their members to have it dumped on them as a “membership benefit” . The copywriting that comes with this junk is an offense to one’s intelligence with all its overhyped “secrets”. What a racket – I wish I had thought of it! But the mysterious Gumshoe –… Read more »
destry
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destry
May 2, 2008 11:54 pm
To be fair, I find some of the finacial letters to be helpful. There are some I’ve dropped; More because their recommendations and style didn’t fit my personality (If that can make sense). The Oxford Club is very good (Along with Investment U.) I have done pretty well with several ideas from Financial Intelligence as well. Stephen Leeb has been around for twenty years…His newest letters, are good for a lot of people; Just not me. Not his fault,or mine. These people have only their ideas to sell. But not all of their ideas…And not all of the time…You have… Read more »
destry
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destry
May 2, 2008 11:58 pm

P.S. I wondered where those two words at the end went.You are obviously not dealing with the
computer literate mental giant of our time.

G IMBURG
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G IMBURG
May 3, 2008 12:42 am

I think that geothermal has tremendous potential once the companies get off the ground,barring some unforseen unknown. I like the fueless concept and low reoccuring costs. Once the smaller companies are up and running,profitability seems clear. Calpine is doing well. The warrants discussed above give the holder the right to buy shares at $23.75,but expire in August. Calpine is the biggest wholesaler of electricity in the US.

Myron Martin
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Myron Martin
May 3, 2008 3:54 pm
TAKEPROFITS: I admit i was a novice and naive when I purchased my first financial newsletters and now take them with the proverbial grain of salt but I also note that the comments of Gumshoes readers run the gamut from those who are inexperienced and naive and those who have let bad experiences turn them into total cynics. The simple truth is that some analysts are better than others and ALL of them no matter how experienced will have some blockbuster picks and on occasion be totally wrong based on unforseeable factors. One of my favourite analysts is Chris Mayer… Read more »
Dividends4Life
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May 4, 2008 2:16 pm
> Unfortunately, the oil’s running out, and the good > times are coming to an abrupt end… unless something > can be done immediately. By 2050 – at present rates > – China alone will consume all of the world’s oil. Nothing like a little fear mongering to reel to sell a newsletter. 🙂 Geothermal will only be one piece of the solution, albeit maybe not even a large piece. I suspect the primary solution, whatever that may be, is not even being publicly discussed at this time. Historically, our ingenuity has allowed us to persevere over insurmountable odds. It… Read more »
newshidden
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newshidden
May 5, 2008 12:50 pm

can someone please send me the original tease or a link for this report? I cannot find it on the oxford site.
geckbiz@aol.com

Crazy B
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Crazy B
May 5, 2008 11:57 pm

Any real information about the teaser”$2000 gold from Addison Wiggins’ this came recently.
Thx

themayor
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themayor
May 6, 2008 4:58 am

Gum….I still get the 801K teasers…..Did you look into that one?

Gravity Switch
Admin
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May 6, 2008 9:02 am

Yep, a couple times — check the “greatest hits” tab at the top, it’s been a popular one.

Olaf Olafsson
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May 6, 2008 6:13 pm

As a native of Iceland and seeing the great benefits of geothermal I am glad to see the growing interest in it in N-America. One of our companies (Geysir Green Energy) aiming to export the know-how in this field has invested in in the Canadian company Western Geopower(WGP) and I am thinking to buy there on the Canadian market.

Leofi
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Leofi
September 17, 2008 3:51 pm

Can you tell anything about the low temp boiler(160F) that is being developed by -www.matterandenergy.com

Rod - Ocean Yorktown
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Rod - Ocean Yorktown
November 12, 2008 12:49 pm
We all know the oil story, there is a nice price dip right now and all should be bargain hunting, and do not forget the oil sands projects in Ft McMurry Albeta, as we are traders, and we look for profits, near and long term. geothermal without a doubt will have it’s day in the light in the future, but for now I’m aligning myself for Oil profits on long term steady producers that are on sale, and will cash out, and go green when the profit wave is coming in for that sector, but the near term reality is… Read more »
Don Routledge
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Don Routledge
November 12, 2008 2:08 pm

RZ did just complete the purchase of 27 geotherm generating units from UTX. Must be gonna make something. When RZ got around $10 the shorts beat it to death on 2008-09 revenue numbers.

Bruce
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November 12, 2008 2:30 pm
Hi Folks — 90% of the energy we consume comes from the Big Three of oil, natural gas and coal. The Little Piglets (hydroelectric, geothermal, nuclear, wind, solar, etc.) account for the remaining 10%. Except for nuclear (which uses a fuel source), the Piglets’ energy has the advantage of a limitless supply. The downside of Piglets’ energy is that the sources of energy are not necessarily near the locations where we need energy. Draw a 100-mile circle around Buffalo; that area has benefited from Niagara Falls hydro power for years. But don’t try to sell solar in that very cloudy… Read more »
tt tan
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tt tan
November 13, 2008 12:04 am

Gumshoe I’m glad I stumbled upon your website and
now have the opportunity to read your unbiased teasers. I subscribe to Oxford as well as to Taipan
but so far I am still deprived of benefits from their teasers – only paid much for the fees!
I will treasure reading your analysis everyday.
A special Thank You

twinprism
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twinprism
November 13, 2008 11:47 am

I do some work with the consultant who did the geology consultation for Raser sites in UT, WY, ID, and OR. I’ll see what I can find out. Sounds like they are getting some great results from explorations in Thermo, Utah but I don’t know if they can put all the pieces together.

cd
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cd
December 17, 2008 4:32 pm

I just got this teaser again today. Dec 17th. your article is dated may 1. back then RZ was trading $9-11. today it closed $4.50. good call? I think not.
I am an Oxford subscriber, but a much poorer one since I joined in May ’07. now I want to short their recommendations!
thanks for your good work, gumshoe!

MachineGhost
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MachineGhost
January 12, 2009 1:32 pm

RZ wasn’t a portfolio pick.

In fairness, most anything bought circa July 2007 onwards would have been a losing proposition. Market timing and valuations do matter.

LOBO
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LOBO
January 26, 2010 10:26 am

CD…wish I had shorted their recommendations…I’d still have a portfolio.

Walt Relja
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Walt Relja
July 19, 2008 10:19 pm

Bravo to you Myron

Walt Relja
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Walt Relja
July 19, 2008 10:27 pm

Good comments and analysis on the multiple publications you and I seemed to share over the years, I too have been frustrated with the wudda, shudda, cudda scenarios of taipan,oxford,agora. It takes some time to fine tune ones own expertise of analyzing whats possible good and whats hypped by 2bit promoters and copywritters. Time, experince,perserverance and errors yield knowledge if we learn from our mistakes….good luck to You and others who perservere and learn progressively. rgds Walt

Veronika Csillag
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Veronika Csillag
November 12, 2008 12:57 pm

Enjoy every line of it….

farley 5
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farley 5
November 12, 2008 3:36 pm

This power source has already been perfected:

Dilithium typically occurs as an extremely hard crystalline mineral, which occurs naturally on some planets. When placed in a high frequency electromagnetic field, magnetic eddies are induced in its structure which keep charged particles away from the crystal lattice. This prevents it from reacting with antimatter when so energized, because the antimatter atoms never actually touch it. Therefore, it is used to contain and regulate the annihilation reaction of matter and antimatter in a starship’s warp core, which otherwise would explode from the uncontrolled annihilation reaction.

Gravity Switch
Admin
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November 12, 2008 3:42 pm

Now THAT will make OPEC nervous — good thinkin’!

LOBO
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LOBO
January 26, 2010 10:30 am

So, Farely…does that mean Dilithium might not be a good source of energy for us here on planet earth?

Aiden
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Aiden
November 12, 2008 5:07 pm
Re UsGeothermal: I saw this one teased a couple of years ago, and easily found it with Google. They plan three 13Gigawatt units for the Raft River site. Unit one has been in operating for about a year. Unit two is under construction, and is expected to be on line 1n Q1, or Q2 of 2009. They have contracted with Bonnyville Power for a powerline of 66 Gigawatts, which would allow for at least four Units. Much of the power units are made by Razer Industries, with electrical switchgear by Allen-Bradley. The plants are Binary cycle, with condensate returned to… Read more »
Bigg Fredd
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Bigg Fredd
October 30, 2010 12:22 pm

OK, I'll buy that as an explanation of why it got down to $3.25. Care to take a shot at why it's at $0.19?

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