I haven’t written about Keith Schaefer in a while, so with oil prices dropping and scaring all the oil investors I thought we’d take a gander at the stock he’s teasing as “one of the safest, long-term growth investments I have ever come across in my investing career.”

The pitch is that this company is bringing nanotechnology to the oil patch, and that they also pay a large and growing dividend (and a monthly dividend, which many people prefer) — and he says he’s owned it for years and calls it his “Money Machine.”

So… what’s he teasing to entice us to subscribe to his Oil & Gas Investments Bulletin? Let’s check out his clues:

“I think nanotechnology will be the next Big Thing in the North American Shale Revolution. And it’s no surprise to me that the company delivering it is my all-time favourite stock.

“This company has a track record of innovation and growth that is un-matched in North America. In fact, I’m stunned it hasn’t been bought yet by one of the Big Boys.

“Even before its new nanotechnology product, revenue, cash flow and DIVIDENDS have been on a steep curve. Nanotechnology is just the icing on the cake—but this product works so well, I expect it to be very thick icing.

“I expect this one product to result in a dividend increase for this company—that would be its TWELFTH dividend increase in the last four years. It’s a Money Machine like no other….

“I think it will produce monthly cash flow for me and my subscribers for at least 30 years.”

That rings several bells — new technology, dividend increases, growth far into the future… I admit, now I want to know what this “Money Machine” is. Some more clues:

“My Money Machine Makes a Fortune off Every Bit of North America’s Massive Production Growth

“That’s because tens of thousands of wells have to be drilled to bring all that oil to surface.

“This one company helps make that happen better than anybody else.

“They’re so good at what they do, they have doubled their US market share in the last two years.

“Even more compelling is the fact that they’ve done it almost all organically.

“And they’re quickly capturing even more U.S. business… while the size of the industry has been growing!”

And apparently this company is making money from ongoing well production, not just from drilling new wells:

“the drilling part doesn’t take very long… often between 8 days and 30 days.

“It’s what happens after the drilling that makes my Money Machine so much more profitable.

“You see, oil and gas wells produce for the next 30, 40… even 50 years.

“The entire time they’re producing, the wells require constant servicing to maximize production.

“That’s where my # 1 company positioned itself so smartly…

“They went out and bought a company that ‘manages’ these wells for their lifetimes, and the revenue potential is monstrous.”

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“Monstrous.” I like that. Not getting real specific here yet, though, so let’s dig for some more tidbits in the ad pitch:

“The company is proposing a stock split. Stock splits are generally very good for stocks.

“But what a split means for this stock is…management sees their high margin cash flow increasing for years to come. They own almost 20% of the stock.”

And… well, that’s about it.

So… the clues are not that specific, but I fed ’em into the Thinkolator anyway — it chugs away for a bit, cogitating on the clues like “stock split” and “growth from acquisitions” and well management and supplies for the oil and gas drilling and fracking businesses, and growing US market share, and that dividend growth history and monthly dividend… and there’s but one answer that comes out the other end: This must be Canadian Energy Services & Technology Corp. (CEU in Toronto, CESDF on the pink sheets).

With one caveat… this is a match for all of the clues, including the specific number of dividend increases, but it’s not contemplating a stock split — it already had a stock split. So I suspect that this original ad is a few months old, though he has also been touting the stock and linking to that same ad in free articles as of yesterday.

It looks like Canadian Energy Services was one of the “busted” Trusts in Canada — essentially, it had been set up as a cash pass-through company that paid out all its earnings as dividends and was tax-exempt, like a REIT or a MLP. That structure was torpedoed in Canada back in 2010, so they converted to a corporation and started paying taxes, but they continue to have a dividend focus and to pay out most of their cash flow (and more than their profits) to shareholders in the form of rising dividends.

And yes, they do pay out monthly, and they have raised the dividend 11 times in four years — so the next time, which could very well be imminent, would be the twelfth. This is really a dividend growth story, the current yield of 3% or so is not high enough to get you excited about a company with such a dramatically high payout ratio (the dividend is much higher than earnings — that has been sustainable in recent years because of non-cash depreciation and share-based compensation and working capital adjustments, but it gives little “wiggle room” if cash flow deteriorates for a few quarters.)

They are really an oilfield services chemical supply company — the develop and sell drilling fluids, muds, anti-corrosion coatings, and that kind of stuff to drillers and producers. And I guess the “transformational acquisition” was probably JACAM, which they acquired last year and which apparently has more of the production/stimulation/maintenance chemicals to supplement what had been a stronger mud/drilling chemicals business from CES. It was a pretty big acquisition for them, $240 million for a company that now has just a market cap of $1.6 billion or so. They’ve acquired lots of other chemical and supply businesses over the years, but most of them have been substantially smaller. I did not locate specific data about the test they say they did with a U.S. company on six wells to prove the improved flow using their nanotechnology, but their nanotech product for fracking is called Revive, you can check it out here.

And… I have to run to a meeting, but I wanted to get you this name so you can talk about it amongst yourselves — they pay out a huge proportion of their cash flow so they have to sell stock or borrow if they want to grow (which they’ve done), and the stock is down a bit in recent months probably mostly because falling oil prices are hitting all oil services names… and perhaps in part because the company had a pretty weak quarter on the revenue front when they announced in mid-August. I don’t know how steady or reliable their business is when oil prices are in decline, but I’m pretty sure the Thinkolator is on target in naming Canadian Energy Services as Schafer’s longtime favorite dividend growth stock. Sound appealing to you? See problems with this one? Let us know with a comment below.