Petroleum Engineering – The Quest to Find and Recover more Oil

Petroleum is basically crude oil or fossil fuel, a naturally-occurring liquid that is found on certain geological formations underneath the earth’s surface. This crude oil is a result of thousands of years of organic dead organisms, often algae and zooplanktons that have been buried, heated and crushed under immense pressure underneath sedimentary rocks. Crude oil is referred to as ‘black gold’ as its value in our modern day world makes it a valuable commodity for any country that is rich in oil and has massive production of this very valuable liquid.

The truth is that crude oil is very important in this modern day era. In fact, petroleum is so valuable for the survival of any country that any oil crisis that leads to the ceasing of its delivery to non-petroleum producing countries can lead to a lot of product inflation. The very reason why product prices will surge up is because the low supply of petrol means that there will be increased demand over it leading to its price increase. Since many products get delivered by cargo ships, trucks, container vans, and other form of vehicles that uses petrol for engine propulsion, the high price in petrol means that product owners and distributors will have to make up for the high price of gas by increasing the prices of their good and commodities.

These days, almost everybody knows just how important petroleum is and how we cannot survive without it as of yet. Currently, oil-rich countries that are major players and producers of oil are slowly starting to deplete their wells and reservoirs. The world’s oil is slowly being depleted as our insatiable appetite for petrol has become even more intense.

Countries in the Middle East along with Canada are known to be the world’s top player in the oil industry. Government assigned and controlled petroleum companies try to seek other means to find and gather oil so that they can fully tap on the reserves that they have. Different technological advancements on how crude oil is mined and obtained have helped in maximizing its production. Many petroleum engineering companies Calgary has have become more adept in taking this challenge. Allocations of different teams concerning analysis, evaluation, assessment, drilling, recovery, and refinement of crude oil has advanced significantly as compared to the days when men were only starting to unravel the usefulness of crude oil.

The petroleum industry is a cutthroat market where different petrol companies try to outdo, outsmart, and beat their competition in their own game. Through the assistance of better and more qualified petroleum engineers along with more state-of-the-art oil drilling and recovery tools and equipment, any site or area identified to have rich oil reservoir can now be tapped to its full potential, avoiding any wastage and damage to the environment.

Soon to come…

I’ll be publishing something cliche to the extent of “Where to Look in 2007″ within the next few days, but don’t expect anything too special. I don’t like touting stocks when I don’t have very many good ideas (and trust me, I may have a few, but not many), and I’ll probably focus more on areas to look rather than specific stocks.

That said, I’m always on the hunt for bargains and ideas, and I research ideas every day. So I’ll continue writing as much quality content on specific companies as I can, but I want to be sure to give them fully deserved attention. Fair warning :-)

See you soon.

Submit Your Own Idea

Given the oustanding quality of readers’ analysis and comments I’ve received on the site and through email, I’ve added a Submit an Idea page to promote more of a community atmosphere. I always love to hear your ideas and research, and I’m happy to publish articles of high quality content and top-notch insight (with a link to your site, of course). Feel free to submit anything you’d like me to take a look at. Looking forward to hearing from you…

Newsletter added.

Bad news is no posts today as I was busy setting up the newsletter with the help of a friend (thanks G!).

Good news is that there is now a newsletter signup. Obviously I encourage everyone to sign up. I promise I will never spam inboxes or send more than 1 email per week ;-)
Cheers!

Who Says You Can’t Value Biotech?

First things first, a special thanks to my extremely intelligent and talented friend and colleague, Brad Hargreaves, who kindly contributes the following insights:

Who says you can’t value biotech?

Outside of supercat bonds and weather derivatives, very few things in the market are stochastic. Some things are harder to predict than others, but even the seemingly daunting waters of biotechnology can be analyzed and priced. Today, I will look at valuation of biotech companies with a very straightforward example—Curagen (CRGN), about as sure a bargain as one gets in emerging technology.

Curagen, a Connecticut-based biotech company, isn’t your typical drug-development firm launched straight out of the lab. Rather, it has a penchant for speculating in other nascent technologies unrelated to its drug pipeline. Most notably among these is a 66% stake in 454 Life Sciences, a small (~120 employee) company that develops technologies to sequence DNA for labs, hospitals, and eventually personalized medicine.

However, the details of the technology aren’t terribly important as long as similar companies exist. Cambridge-based Solexa (SLXA) started marketing a similar product last year, over a year after 454 entered the market. The take-home: Solexa, despite burning cash at the rate of $10 million per quarter, was recently acquired for $600 million by Illumina (ILMN), a biotech powerhouse. With net tangible assets of under $50 mm, Illumina paid a premium for Solexa’s technology and growth potential.

With that in mind, Curagen’s roughly $250 million market cap is surprising. Even making the very conservative estimate that 454’s weak intellectual property portfolio cuts its value to two-thirds that of Solexa’s, it’s hard to believe that Curagen’s drug pipeline is worth negative twenty million dollars. Rather, I believe that investors have simply overlooked the value of Curagen’s subsidiaries by relying on traditional pipeline-based biotech analysis.

The Month of June

Clearly I checked out from writing in June. But I’m back from that little hiatus, and I’ve decided to write more concise, to-the-point articles that will allow me to be more prolific in July. I’ve been thinking that I’m at the point where I have a bunch of ideas, but just don’t have time to share them in the the standard, longer article format.

How to Spot Investing Frauds, Scams, Ponzi Schemes, and Other Rip Offs

I was having a conversation with a reader earlier this week, and we both got to talking about the vast number of investment schemes peddled everywhere from newsletters to the internet to television. There’s a surprising lack of good advice on how to spot it and a disturbing failure on the part of many consumers to research products and advice. So I’d like to provide my own checklist of things to look out for when considering the purchase of advice, services, or products promising to make you tons of money. These are a few telltale signs of ripoffs and garbage that simply isn’t worth your time or money. The list is not exhaustive, but offers what I believe are some good things to investigate or think about when considering the purchase of investment advice or education.

1) Promises or guarantees of excess returns, especially in a short period of time. Whenever you read or here some charlatan sharing his “magic formula” for investing success that made him millions or some “testimonials” from “average folks” going from rags to riches and making a fortune in the market, be aware. If you believe their claims are genuine or you’re not sure, always ask yourself both how long it took them to do it and how much they started with. After all, anyone could make a hundred thousand dollars in a year if he started with $2 million. But if someone says he started with $1000 and in two years turned it into $1 million, run and run fast — never trust claims of 100,000% returns. There is simply no method that yields huge returns which is not extraordinarily risky and leveraged, meaning that that person could just as well have been in debt $1 million.

2) Lack of SEC registration as an Investment Advisor. A really simple way to spot something that might be shady is to check whether the seller has registered with the SEC. It is illegal for anyone or any entity to directly sell investment advice without notifying and filing with the SEC as a Registered Investment Advisor (RIA), and, trust me, anyone who is legit will surely share it with their customers, usually upfront and center. Now, things get a bit fuzzy because general investing education programs, newsletters, etc. usually do not require registration and can still charge for services. Nonetheless, if you don’t see the SEC’s stamp of approval, consider avoiding it. It’s also important to note that the presence of RIA status should likewise not be taken as a green light — plenty of registered advisors are not to be trusted. In any case, it’s just another clue to take a look at.

3) Lack of documented and verifiable returns or success stories. If an investment advice peddler is charging for services, be sure to get or ask for a track record, study, or other verifiable data demonstrating that the system or advice is sound and, well, works. Any idiot can start a website with a stock-pick newsletter, or a “system” for large, imaginary profits, but of the many, many programs out there, few will show you documented or audited results and even less will share any study indicating that their way works (for instance, by back testing). Of course, it’s easy to fudge numbers and take some liberty in creating phony returns, so the more rigorous and verifiable the data, the better.

4) Lack of a free trial. If someone is offering a “system” or regular newsletter for investing success, they’ll usually offer some sort of free trial period if they are legitimate, to allow you to test out the product before committing to buy it. If they want to get you locked in to the product and don’t offer the opportunity to test it, think long and hard before buying it.

5) Money back, satisfaction guarantees. I’m honestly a bit conflicted on this point, but here’s what I think. On one hand, if a company is not willing to put its own money where its mouth is, why should you? On the other hand, because around 70% of products are never returned even when fraudulent or stupid, even a scam artist can make such a guarantee and come out on top. So while most companies offer either a money back guarantee or a trial period (but not both), all things equal, I prefer the trial period. If it’s missing either, don’t bother.

If a company does offer a money back guarantee, it’s important to note that they should be guaranteeing “satisfaction” and not excess profits, since, as we discussed above, that’s usually another sign of a ripoff. No legitimate source — not even the best investors themselves — would ever tell you they can promise excess returns. Remember, you can still lose a ton when someone promises you profits, and simply getting your $200 back from the guarantee won’t recoup the $10,000 you lost using crappy systems, advice, or stock picks. And in some cases, the company may never even respond to your request to get your money back. Which leads me to the last point:

6) Check the BBB. The Better Business Bureau is a great resource for consumers looking to investigate the actual satisfaction of customers. It’s not perfect since many dissatisfied customers fail to report (indeed, many consumers in general don’t even think about reporting). But it’s another indicator. A fair number of irate customers is a definite red flag, so keep an eye out.

I’ll try to edit and fill into the list based on reader’s suggestions and anything else that comes to mind. So if you can think of anything you’d like to add, contact me.