Oil Sands Profits — Conrad and Sprott

Friday File look at an oil sands teaser and a potential unlocking of value at Sprott Resource

By Travis Johnson, Stock Gumshoe, October 28, 2011

The interest in the oil sands seems to be peaking lately — not just in a good way, but all around. We’re seeing protests about the proposed Keystone XL pipeline that would bring more Canadian oil south to the US Gulf refineries, we’re seeing renewed concern about environmental impacts, and we’re seeing great interest from Chinese investors and other folks who are interested in getting some energy security now that oil prices area again high … and important, high versus natural gas prices, which helps with oil sands margins (many of these operations, including the steam-assisted gravity drainage underground production, require copious amounts of natural gas to produce oil).

So a couple things have caught my attention to note for you this week: first, a Roger Conrad teaser for his Canadian Edge newsletter about a company that’s helping to “clean up” the oil sands, which seems like a timely idea; and second, if Sprott Resource Corp is anywhere near close in their internal valuation of their heavy oil assets, they may be able to book a huge gain on their planned “monetization” of their Waseca subsidiary, and the market seems to be ignoring that.

First, then, our teaser du jour — here’s how Conrad’s email opens:

“Undervalued, underestimated, unknown to U.S. investors…
and set to take off like a rocket…

“One Waste Buster is Revolutionizing the Cleanup of the Canadian Oil Sands.

“Now, They’re Taking Aim at the “800-Pound Gorilla” of U.S. Energy.

“Huge profits from cleaning up other folks’ “mess”?

“This brilliant outfit may have a permanent solution
to America’s intractable demand for oil and energy.
Profits from oil-drilling cleanups alone are already up 54%.

“When Wall Street wakes up, this stock will explode.

“One single trade positions you for unlimited returns.”

I know that hyperbole flows like water in these parts, but still — that sounds pretty impressive, right? So what is the company that Conrad holds the “billion-dollar solution”

Well, first, what’s the “problem?” Mostly, per this teaser, it’s the nasty tailings ponds of sludge from oil sands production (actually, “ponds” is probably the wrong term — size-wise, these are “lakes”). Here’s how Conrad puts it:

“Traditionally, oil sands operators have poured the waste from this process into holding ponds where it is to allowed to settle. For years, most Canadians were unaware the tailings ponds ...

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