$20 Trillion Report: “Underground Refinery Saves Canada’s Oil Sands”

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This is one that several of you have sent my way in the last few days, a company that has a technology for more efficiently and effectively harvesting oil from the bitumen of Alberta.

The ad is for the $20 Trillion Report, a new newsletter service from Brian Hicks, who’s also hawking his book (Profit from the Peak) along with the newsletter.

And that might be what makes this ad sound familiar …

This one is, I expect, a new copywriter’s attempt to do better than the old ad that teased the same company.

In the old ad, which I wrote about in December, they called this Safe Growth with the Best Oil Sands Play. Not that exciting, right? Doesn’t pique the interest?

So perhaps this will be a more successful ad. If so, we’ll certainly see plenty of it in the months ahead, as long as oil remains at historically high prices.

So yes, this “Underground Refinery” is a technique for liquefying and extracting the oil that doesn’t require mining or digging out the oil sands and processing them aboveground. There are several techniques that have been used for doing this, but this particular ad is talking about the THAI process.

And the THAI Process, as it was back in December when I last covered this one, is still owned by …

Petrobank (PBG in Canada, PBEGF on the pink sheets)

The process is essentially a lower-cost way of generating heat underground to “melt” the bitumen and release something like syncrude that can be pumped to the surface. The current way of doing this, Steam Assisted Gravity Drainage (SAGD) involves using natural gas to generate steam, pumping the steam into the ground to heat the bitumen, and catching that bitumen in a lower cavity or drilled area of some kind. Or something like that. If it sounds like I know what I’m talking about, believe me, I don’t.

The new process just uses the bitumen itself instead of generating steam with natural gas, which is why it’s more efficient. They essentially light the edge of the bitumen on fire, use that the melt the rest of it, and control the combustion to release syncrude where they want it, and when. I have no idea how they do it, but it sounds really, really hard.

So … not much has changed since I last wrote about them, and you can read that older writeup if you’re interested. The shares have been quite volatile in a range from $40-60, but are right now just about at the same price they were in early December. The company did have some positive news in its last earnings release, but is not exactly shooting the lights out and catching everyone’s attention just yet — and it’s certainly not cheap on current income. I know I had a lot of readers who were interested in this one last time around, so perhaps they will have more to share with you … or maybe you’ve got a fabulous idea of your own. Let ‘er rip.


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25 Responses to $20 Trillion Report: “Underground Refinery Saves Canada’s Oil Sands”


  1. I think, this one has very good potential to grow. Recently it had been pulled back and it is a buying oportunity. I do own this one and may buy some more.

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  2. IS THIS EXTRACTION PROCESS SOMEWHAT LIKE THE WATER INJECTION FOR REGULAR OIL FIELDS, IN THAT A CIRCLE OF EXTRACTION WELLS ARE DRILLED AROUND AN INJECTION WELL, THEN SEA WATER IS SENT DOWN WHICH DRIVES THE OIL OUT TO THE EXTRACION WELLS.
    IF THE NEW PROCESS STARTS A FIRE IN THE CENTER THE TAR SANDS TURN LIQUID AND UNDER HEAT/PRESSURE COULD BE EXTRACTED…YOU NEED TO INJECT FUEL AND AIR TO HAVE COMBUSTION. HOW MUCH OF YOUR TAR SANDS CAN BE CONVERTED TO LIQUID??? WHAT IS THE COST TO DRILL ALL THESE WELLS??? WHAT HAPPENS WHEN YOUR FIRE BREAKS TO THE SURFACE AND OBTAINS IT’S OWN AIR SUPPLY??? REMEMBER THE DEEP COAL MINE FIRES THAT CONSUME TONS OF COAL EACH YEAR AND RESIST MAJOR EFFORTS TO EXTINGUISH!!! TECHNOLOGY IS GREAT IF IT WORKS WELL AND CAN BE CONTROLLED FOREVER… WHICH IS A VERY VERY LONG TIME.

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  3. This company DOES have earnings,however their PE
    is high at over 53. I bought in about 10 dollars
    ago(higher) and will not look back. This technology
    makes to much sense, they have reserves, they pump oil, their market cap is 4B. When their reserves
    are restated for THAI with a 20% improvement in extraction,and lower cost,plus environmental
    friendly method. There is something for everyone.
    Buy it in the mid 40s you will not get hurt.

    Like(0)

  4. Thanks sniper, will fix. And glad to hear many folks are still interested in this one — if they can really make oil sands extraction less polluting, in particular, maybe they’ll have a chance. It looks like the backlash against the oil sands for environmental reasons, both local pollution and global warming, might be really getting going now. We’ll see.

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  5. This one sounds like it could be a winner. Given the price of oil, there is certainly a lot of focus on efficiencies and alternatives. These will always make for a good tease.

    Best Wishes,
    D4L

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  6. Am I the “Loyal Opposition?” All this sounds so difficult and technologically daunting and dangerous. I own several Canadian Oil Trusts that appear to be using just the old standard ways of doing things. The sources I depend upon for evaluating them say these trusts are good for 10 to 20 years or more, and I get a better than 10% return in the form of a cash deposit to my brokerage account every month. I have great confidence that market forces will cause a gravitation to the best technologies by all players. So why fight for a questionable edge when I already feel like I am enjoying a (almost) free ride?

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  7. It could be a process that is being tried on shale oil, they bury huge electrodes that cause the heating. The electrical load is rather huge and it still takes energy to extract energy, or anything else for that matter.

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  8. Wayne, I’ve been in the Canadian Trusts for about two years now. They pay good dividends and have no negative tax implications.

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  9. Is anyone familiar with a company called Ivanhoe Energy. They claim to have a better process than the THAI process ussed by Petrobank . On Mar 7, 2008 PetroEcuador offered Ivanhoe 20% of a 4 billion barrel reserve to use ivanhoe’s HTL (heavy to light) oil processing technology. Ivanhoe has stated that they have so many offers for the technology that they are carefully choosing who to contract with first. It is hard to figure who is telling the truth.

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  10. I agree in mid 40′s it is a reasonable buy just based on conventional oil production. I consider the Oil sands tech to be the cherry on top.

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  11. Who might this be o wise one?

    Right now, almost all of the world’s supply of rare earths comes from China, which is why our investment opportunity is so appropriate. Unfortunately, I cannot let you know the specific investment opportunity I’m talking about. That simply wouldn’t be fair to the readers of my Energy and Scarcity newsletter. But now you at least know where to look.

    Until we meet again…
    Byron W. King

    Like(0)

  12. Peter Mac Isaac – Carnac the Magnificent believes the rare earth play to be Lynas Corp (LYSCF). Observing for almost a year but the shares have shown little levitation. The Western continent (Austalia) remains on fire-keep your RMB’s (Yuan) close at hand.

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  13. regs1955 – Can’t comment on the efficacy of Ivanhoe’s statements regarding HTL and GTL. November 5, 2007, EFE via COMTEX reported Ivanhoe “wants to invest” $6 BILLION in Ecuador’s Amazon region. But, $11.4 “Million” is the cash position Ivanhoe recently reported as of December 31, 2007. Recommend you also study the comparative quarterly income statements and production reports for all periods available on Ivanhoe’s website. Finally, the company states they received a “going concern” opinion from their Registered Chartered Accountants as of December 31, 2007. Enough said?

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  14. This article about Petrobank is from mid-March, but it explains why the stock has been so volatile lately. They have been unable to book new oil reserves based on the THAI technology, despite probably overly aggressive market expectations. I think Gumshoes idea of longer term calls is good one, because this may take many months or even years to play out on the positive side.

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  15. What do you know about Martin Weiss’s “Safe Money Report” and the International ETF’s he recommends? Also, Do you know anything about NHPR National Health Partners?

    Like(0)

  16. RE: regs1955

    Looks like IVAN is off to the races, again. It’s now at its 52 week high. I was in at $4.60 (10/2003) out at $5.75 in 3 weeks, and back in at $4.01 a month later. Still holding (losing), but maybe this time it’ll work out?

    Like(0)

  17. Petrobank’s (PBG.TO) forward P/E is close to 10 on the strength of their (Bakkan etc) production. Shareholders are getting the THAI technology for free. Not much of a gamble if you ask me.

    Like(0)

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