We’re getting a little bit off the beaten path here — this one was sent to me by a few British readers, though with the enthusiasm that I’ve seen from many of my readers for new energy technology companies I thought there might be some broader interest.
The teaser (it’s here if you want to see the whole thing) is an interesting indicator of the fact that newsletter and stock tout services use pretty much the same style in every country, so we’ve also got our outsize claims for possible returns, mysterious but colorful descriptions of the company, etc. They also put their disclaimers up front and center (“This isn’t financial advice, forecasts are not reliable, and so on), which must be required on that side of the pond. US ads that include disclaimers almost always hide them way down at the bottom of the page in tiny print (just like the Gumshoe, whose disclaimer is way down at the bottom of this page).
But getting to the point:
The newsletter being teased is Red Hot Penny Shares, edited by Tom Bulford, and it will cost you 29 Pounds a year, about $57. Or if all you want to know about is the name of this “torpedo technique” company, you can just read on a bit and the Gumshoe will oblige.
The main tease here is right at the top: “You could see gains of 127% to 2,171% when
this company’s ‘torpedo technique’ gets deployed FOR REAL in 2008.”
They first explain that a large portion of the natural gas in the world is impossible to reclaim with current technology — once you extract the pressurized gas, the pressure starts to drop in the gas reservoir and extraction gets slower and slower until the well “dies.” They say that up to 40% of a well’s reserves are left behind when they close off a well that stops performing.
And, I bet you guessed it, this company has a device that will enable drillers to extract more of that “stranded gas.”
We also hear about the inventor of this device — a man named Gerry who works in an old warehouse building in a town outside London, who calls this a DHG Compressor.
And to add color (this is my favorite part):
“Besides hundreds of technical devices, flashing and blinking and a constant humdrum of electrically powered generators… walking into this small red-brick building feels like you’ve stepped back to the 1930’s… Podgy men in blue overalls with crazy hair pour over intricate details on design maps drawn in pencil… their half eaten ham and pickle sandwiches left stale on the side of the worktops…”
Doesn’t that sound like an undiscovered gem of a company? Feel like you’re visiting a company so far behind the curtain that no other investors will be wise enough to recognize it’s value? That is, of course, the whole idea.
What does this company actually do?
They’ve developed what they call a “downhole gas compressor” (that’s the DHG bit that they teased) — a compressor that goes down the drill pipe and increases pressure in the well, to help increase output. Apparently they’ve tested this and it increases output by 40%.
A few more teaser bits to get you riled up:
“at this very moment four of the world’s largest energy conglomerates are funding the third and final stage of test work before this company’s technique gets deployed FOR REAL in 2008.”
“Behind-the-scenes, a frantic race against time is on to find an innovative and financially viable way to suck ‘stranded gas’ out of the ground … within the space of the next few months – this race will be won. And if you buy shares in the winner today, you put yourself in the running for an absolute killing in 2008 and beyond.”
So what is this company?
The Thinkolator had to re-spell itself Thinkolatour in order to decipher our clues, but this firm is …
Corac Group (trades in London as CRA … there is technically a ticker symbol for this one in the US, but it’s on the “Grey Market”, not even on the pink sheets, so don’t bother — you probably need to buy it in London if you want it)
For what it’s worth, the company and their technology do sound interesting, but I have absolutely no idea whether other innovators are also working in this space. I would assume that they are, since getting a compressor down the well somehow is probably the most obvious way to increase gas pressure that I can think of, and I’m largely an idiot when it comes to engineering. I’m sure it’s difficult and that they have lots of intellectual property rights on their particular design, but I wouldn’t be surprised if there are other “down hole compressors” out there being developed or tested.
Oh, and that professorial “Gerry” character? That’s Gerry Musgrave, executive chairman. He really is a professor, too, apparently.
Here’s the page that explains their technology and progress in brief, if you’re interested. And the company is all about compressed air — they are about ten years old and are structured to be just an innovation and intellectual property holder, so I assume that any work on actually developing and using these devices, if they continue to work, will be farmed out to licensees. They say that “Field trials of a commercial demonstrator in a live gas well are planned for 2008.”
So, for those who live in or can trade in London, maybe something worth looking into for a few minutes. Sales are increasing, though are still quite small in relation to the company’s size (market cap is about 50 million pounds). They are still losing money, but apparently this tout is getting some attention rolling for the company or the , as at one point the shares were up close to 10% today. Shares are now at a six-year high at about 68 pence ($1.35 or so for us Amurricans). They report earnings on February 17th.
Personal Capital is an advertiser with Stock Gumshoe, but Travis also uses it every day for his personal accounts and finds it invaluable. Here's what he said: "They offer a great (and genuinely FREE) 'second opinion' for your financial plan, but what I love most is their automated financial dashboard -- it will look at all your assets and debts, tally up your asset allocation, project where you'll be at retirement, and suggest ways to manage risk or improve returns. It's free, I think their free tools are great, and I think it's worth checking out -- you can do so here.