“The Secret of the Marcellus Shale” Matt Badiali

By Travis Johnson, Stock Gumshoe, September 23, 2008

If you’re on the email lists for Stansberry or Agora or a half dozen other investment newsletter publishers, you’ve probably seen this ad — it’s for the S&A Oil Report, and it tells us that, for a wee subscription fee, the editor of that newsletter will tell us the secret that he didn’t tell Brian Sullivan at Fox News.

“‘What I didn’t tell Fox News about the biggest money-making opportunity in America for the next 12 months’
~Matt Badiali, U.S. Geology Veteran”

Well, Matt didn’t tell me what his secret is, either — but thankfully, he wanted to entice you to subscribe — so he included just enough juicy detail in his ad that the Gumshoe will do some digging and get the name of this stock for you. Stay with me for a minute and I’ll share.

Here’s some of the ad, in case you missed the excitement:

“On July 28th Fox News asked me to talk about the biggest U.S. natural resource discovery of the last 32 years.

“I told them everything I know… EXCEPT for the one piece of vital information that can make you a fortune in the next 12 months.

“He saw an academic paper I wrote about a unique piece of land in the Appalachian Mountains…

“A 54,000 square-mile swath stretching from West Virginia to New York…

“Brian wanted me on the show because of my experience as a geologist. I’ve studied this area for my entire academic and professional career. I’ve probably done more research on this land than anyone else in my field. In fact, you could say, I’m the “unofficial expert” on this Appalachian discovery.”

So … this is all about the Marcellus Shale, which is a big geological formation that lies under the Appalachian mountains and in those environs, roughly running from West Virginia up through Western Pennsylvania. And the sexiest part of it right now is definitely Pennsylvania, since new technologies in the last ten years have made accessing that gas feasible and affordable.

And Badiali does probably know quite a bit about it — to say that he has done more research on this land is a reality-stretching boast, he hasn’t even really published much as an academic and hasn’t finished his PhD as far as I can tell … there are plenty of geologists who have studied this area rigorously, and Pennsylvania is no stranger to the energy industry. The first oil boom in the United States started in Pennsylvania well over 100 years ago … it’s not a coincidence that you lubricate your engine with “Quaker State” oil. But yes, he has studied geology and he has written a lot about shale oil and gas for investors for many years. If you want a real on-the-ground scholar of this stuff, look for someone like Terry Engelder at Penn State, who released a report in January that stoked interest in the Marcellus for a lot of people. But of course, he isn’t a subscription-hawking newsletter editor, he’s a professor, so he won’t tell you about any companies you should invest in.

Badiali will — and don’t worry, we’ll get to the name in a minute.

Part of the tease for this ad is that Badiali says there’s a big release of information coming from Pennsylvania about the potential of the Marcellus Shale. He goes through the fact that the USGS did their big survey of Marcellus in 2003, and that while other states release this data almost instantly, Pennsylvania lets you keep it under wraps for five years … which would bring us to 2008.

I don’t know exactly what this potential data release is — or why it would be shocking or exciting for investors. The man I mentioned above, Terry Engelder, has been studying the Marcellus with a colleague from a New York university and released some pretty incredible information in January, and in more detail at a petroleum geologists conference in the Spring. Here’s a quote from Engelder’s website:

“The researchers said that America (U.S., Canada, and Mexico) currently produces roughly 30 trillion cubic feet of gas annually. Engelder said the technology exists to recover 50 trillion cubic feet of gas just from the Marcellus, making it a super giant gas field.”

That’s enough excitement for me — and I don’t suppose that there are big numbers of investors who will be surprised to hear that the Ma