# Fear of Fracking



## humble_pie (Jun 7, 2009)

an interesting company graduated from the capital pools onto the vse in early august. Gasfrac energy services commenced trading less than 2 months ago at $5 & rose effortlessly to $6, where it hovers. Gasfrac offers a proprietary gelled lpg (liquified petroleum gas) technology to fracture shale gas in horizontal wells, and this is said to be less toxic than conventional hydraulic fracturing.

in addition, calgary's trican well service recently introduced its Ecoclean fracturing fluid, said to be biodegradable, for use in well drilling in the controversial marcellus shale depsits in pennsylvania & new york state.

what's wrong with hydraulic fracturing, aka fracking ? it's not the water, it's the chemicals mixed with the water that gets injected under high pressure deep into the bore holes to crack the otherwise resistent shale structures and start the flow of either oil or gas.

local citizens impacted by development of the giant marcellus shales are winning support for their demands for moratoriums on shale drilling. The standard chemical-laced water is said to contaminate the water table. In most shale projects, this water is extracted & either held in ponds like tailing ponds or else, says one source, re-injected back into the earth, although it's hard to make sense out of the latter method.

gasfrac's gelled lpg product is said to be a "native" hydrocarbon that never has to be extracted or treated. Company has been testing since 2007 & says it owns a proven technology.

my take ? i have no way of judging either gasfrac's or trican's technology. One would have to be a highly specialized petroleum engineer. Either or both hydrocarbon preparations could turn out, in time, to present environmental risks that are not yet understood. But we won't know that for a number of years, possibly not for a decade or longer.

what i do see are bright, responsible brokers & analysts already on board the gasfrac bandwagon. Yes, it could be an incredibly sophisticated pump scheme, and in that case it would appear to be one of the best. It's always impossible to draw the fine line between positive endorsement by analysts & underwriters and what is nothing more than a giant sales campaign. Still, there is some smart money betting on gasfrac and my guess is that this number is going to run.


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## MoneyGal (Apr 24, 2009)

Helloooooooo! I am the daughter of a sedimentary geologist (retired professor, former editor of GeoScience Canada, field geologist with the Geological Survey of Canada) and my younger brother is a E&P analyst. I am not kidding you when I say I grew up talking about fracking and EOR at the family dinner table. 

I'll talk fracking with you any time. However, I will never reveal my particular O&G plays.


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## andrewf (Mar 1, 2010)

Have you seen Gasland, MG? What are your thoughts?

I'm somewhat happy that Ontario doesn't have any shale gas. We don't have to worry about doing to our land what some other areas have done to theirs.


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## John_Michaels (Dec 14, 2009)

Since I don't have a background in geo-engineering and can't do an analysis to determine fact-from-fiction, I'll state I'm gambling (not investing) on the fracking is over-sold and will be an environmental disaster which will drive gas prices backup.

No answer to the financial penalties that these companies (CNQ for the moment) will face if the disaster happens to them.


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## Cal (Jun 17, 2009)

On a related note, I had read 'Stupid to the last drop'. It obviously was a biased read, but for the uninformed, it did a great job explaining the process, and experiences of some involved.


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## ChrisR (Jul 13, 2009)

For those who don't like reading so much, there is also a documentary floating around called Gasland. I haven't seen it yet, but the trailer shows people literally lighting their tap water on fire, after land in their area has been 'fracked'. 

That's either really cool... or really not cool. I suppose it depends on whether or not its YOUR tap water!


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## humble_pie (Jun 7, 2009)

cal thanx for mentioning Stupid to the Last Drop, i'm going to read it.

author william marsden is a rigorous, disciplined, experienced investigative reporter, so it's difficult to believe he'd write a biased sentence let alone a biased book. All the reviews say the book paints a doomsday picture of the future alberta environment, with the northern part of the province laid waste by tar sands and the southern part carpet-bombed with frakked horizontal wells. Perhaps marsden is playing the role of an old testament prophet.


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## Berubeland (Sep 6, 2009)

Hmmm, I thought Humble Pie had some kind of weird phobia against Battlestar Galactica. 

You learn something new every day


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## humble_pie (Jun 7, 2009)

*re gasfrac insiders:*

gasfrac yesterday announced results of the fire investigation & it was the lighter, easier, better of the 2 scenarios. It was mechanical failure. An accident. Is being corrected. No need to retrain personnel or recertify gasfrac technology.

co said it will be back in operation by 31 january after downtime of just over 2 weeks.

however, the recent history of insider trading is disconcerting. The company has never identified the exact date or location of the fire. Date is widely assumed to be friday 14 january. However certain reports place it as early as thursday 13 january. Company did not disclose the accident until a terse news release appeared on sunday 16 january.

from january 10 through january 14, five gasfrac insiders sold approximately 190,000 shares at prices ranging from 10.03 to 12.00. No reports of post-accident insider buying have yet appeared, but it is too early to expect these.

there was unsustainable froth in gasfrac share prices during the 2nd week of january. GFS commenced that week at 9.30 & soared to the record high of 12.00 (apparently paid to a selling gfs insider) on january 14, while insiders dropped the above-mentioned 190,000 shares. At some not-yet-specified point in time during that week, the accident occurred. The timing of all this is remarkably coincidental.


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## 50invester (Feb 10, 2010)

*Fracking*

I have read 'Stupid to the Last Drop'. William Marsden is an excellent writer and this book is a very enjoyable and enlightning read and I would humbly agree that it should be a must for any Investor interested in NG or Oil Sands. Investors beware ...there is always a price to pay. I have not seen 'GasLand', but if you check out the website, you can get an idea of the environmental costs of Fracking. Were any of you aware that during the Bush reign, Dick Cheney led a fight to get Hydraulic Fracking exempted from the Safe Water Drinking Act ... and WON. Recall that Cheney was a former CEO of Haliburton, the industrys biggest player. The Obama Admin is now repealing the bill. Hurray!


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## Addy (Mar 12, 2010)

Berubeland said:


> Hmmm, I thought Humble Pie had some kind of weird phobia against Battlestar Galactica.
> 
> You learn something new every day


Well that is much better than what I thought this thread was going to be about. I figured hp was asking for some sort of marital advice....


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## humble_pie (Jun 7, 2009)

there are darker & brighter sides to gasfrac's story that are rivetting.

it may be a dangerous explosion-prone technology.

Q: are haliburton & chevron who hold part of the patents waiting to see how new kid gasfrac makes out w no risk to themselves.

Q: there are gas shales almost everywhere. Even ontario has shale gas. If the propane gel turns out to be a safe technology, what does that mean for north american energy supplies going out the next half-century.

plenty shale gas in northern europe too. Talisman drilling in poland, but not w gfs technology. TLM is hydro fracking.


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## clovis8 (Dec 7, 2010)

I tangentially work a lot with oil companies (I work for an environmental consulting firm) and it looks like fracing is going to be the main way most oil and gas is extracted for some time. 

I am wondering what market plays a person could make now to get in early before fracing becomes the main tech?

P.S. I did see Gasland and thought it was horrible. I am an uber-environmentalist liberal but that doc one so insanely one sided it was unreal. There was not even a single mention of the myriad of techniques used everyday to limit the impact of fracing and other extraction on the environment.


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## dubmac (Jan 9, 2011)

I studied Geology in University - worked at Union Gas (in Chatham, Ont) before becoming a teacher. Having been out of the biz for 25 yrs, I researched the topic of gas fracking - found this link (22 min) that documents the technology (under operation in NY state on the Marceullus shale) & process - quite informative for those seeking information...

http://www.ny1.com/content/special_reports/hydrofracking_the_pressure_to_drill/

Having seen the operation in Chatham, Ont. - I often wonder how much this technology would be used to further develop the storage resevoirs used by Union Gas in Ontario. 

Union Gas stores all of their gas from western Canada in depleted gas wells (which are porous limestone reefs) in their Dawn storage facilities. They fill the reservoirs with gas during the summer, and send the gas from the storage wells in the winter.


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## fatcat (Nov 11, 2009)

this thread confirms for me why i should stay away from anything involving natural gas even though many of us sense that there is a lot of opportunity to be had ..

in addition to researching companies and their various projects

you need to also research and understand the complex picture of supply and demand

and on top of that you need to understand environmental impact which could be significant

and finally, there is the inevitable legal issues which will absolutely be an ongoing part of natural gas exploration and extraction

too many variables for those us who are conservative ...

fortune belongs to the bold on this one ....


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## humble_pie (Jun 7, 2009)

black mac to the best of my knowledge gasfrac has not carried out any work in the marcellus.

one has to be careful among the technologies. There's gas fracking with water & chemicals, usually called hydro fracking. This is the technology w strong opposition. 

then there's gas fracking with propane gel, usually called gas fracking. It means fracking without water. This is what gasfrac the canadian company does.

re the old storage wells near chatham on. Would the reason for fracking em now be to recover additional gas with the new technology.

i'm also interested in the history of these old chatham wells being used as storage units for gas. To your recollection, were there any incidents of water contamination. Or any other incidents of outright pollution from these storage chambers, or any rumours of the same, during all those storage years.

would certainly appreciate hearing some of this info. Didn't know canada already had a crude history of underground hydrocarbon storage as you describe.


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## dubmac (Jan 9, 2011)

Humble..

My scottish roots and past excesses (fewer neurons) prevent me from recalling much of anything prior to last week, but I do remember some things from my time with Union Gas. I recall that they were very interested in 3-D seismic mapping of underground resevoirs (see http://www.onepetro.org/mslib/app/Preview.do?paperNumber=00039224&societyCode=SPE) to better understand where the most porous and permeable parts of the reefs were located - ergo -store more gas in those areas. As for water contamination, I don't recall this as a problem, as they have so many wells that they probably pump the water out (regularly) to increase storage capacity. Pollution - yes - but we're talking about Sarnia here (sorry if I stepped on toes with that remark) - many farms in the area, not many people. I also recall that they were very interested (then) in obtaining more storage capacity. ENbridge and Gaz-Metro often stored gas in the facilities. http://www.uniongas.com/storagetransportation/aboutusst.asp. 
One problem that I recall was in the types of meters that the compan(ies) used. For example, TRP would send/measure gas volumes using meter "A", and Union Gas would withdraw/send gas using meter "B" - the two volumes would measure different amounts...That they matter has probably long since been resolved

The reefs themselves are remnants of reefs that developed near the shore of an ancient ocean that dried up (leaving behind much of the salt still mined today in Goderich Ont, and used to salt the roads in Ontario in winter). They are smallish, circular, and form a belt through Chatham - Sarnia area. they also extend into Michigan. This pdf file has some good information - but some nonsense as well - in it. 

http://www.jmclawyers.ca/images/jmc-CAFA PResentation.pdf

Hope this helps - I'm going to make more Ginsing tea to improve my memory


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## humble_pie (Jun 7, 2009)

most entrepreneurial stories are fun to investigate. They always become more exciting when the first hints of bigger, sometimes even huge, associations & influences begin to surface.

i see that a rival to gasfrac is a privately owned calgary company called Packers Plus, with a licensed new technology called Quickfrac. It's rumoured that part owners of packers are crescent point & petrobakken. This makes sense. Digging deeper, one finds a fleeting reference to schlumberger of the US.

so here we glimpse, in a glass darkly, two rival transcontinental energy teams in the shale gas drilling biz. Haliburton, chevron, gasfrac. Schlumberger, crescent point, packers.

it doesn't hurt that packers appears to be one lean machine of ripped muscle. I'd buy shares in a packers IPO in a heartbeat if one were offered. But i suspect that cpg has got packers well financed & totally tied up for years to come, so no need of any public offering.


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## OptsyEagle (Nov 29, 2009)

I am not sure if this link will continue to work so here is the article in full.

http://owegopennysaver.com/index.php/2011/04/11/natural-gas-drilling-without-the-use-of-water/

Natural Gas Drilling without the use of water?
Wendy Post 
On 4/11/11 • in the category News

Share|In Tioga County, New York, a group of landowners comprised of 1,826 families that own 126,000 acres of land will be introducing a company that can perform gas drilling without the use of water or chemicals in its process. The open meeting for the introduction is scheduled to take place on April 14, at 6:30 p.m. in the Owego Free Academy Auditorium located on Sheldon Guile Boulevard in Owego, New York.

The company, Gasfrac Energy Services out of Texas, utilizes gelled Liquefied Petroleum Gas (LPG) in place of conventional fracturing fluids (water), according to Nick Schoonover, chairman of the Tioga County Landowner’s Group – a group that was established in 2008 to unify Tioga County, New York landowners.

Schoonover also explained what he described as an “environmentally friendly” process utilized by Gasfrac, and how he came about discovering the company that uses it.

When the Tioga County Landowner’s Group formed in 2008, according to Schoonover, it got off the ground with a couple hundred people. He added that it soon grew to over 500 members.

He talked of the group’s formation, and how in the beginning landowners were reporting that they received about three to five dollars an acre – a small sum in comparison to the $3,500 per acre that was later derived by larger companies who leased the drilling rights.

By uniting together as a landowner’s group, Schoonover explained how lawyers were able to work with landowners that joined in formulating a future lease that could be utilized by all to ensure they were getting a fair deal on their mineral rights and potential land use for drilling. Schoonover additionally noted that they selected attorneys that had knowledge of the environmental and landowner protection aspects as well.

Schoonover also described the members of the group as being concerned for the environment as well. “Eighty-one percent of our members came in to our group with a focus on protecting their land and water,” said Schoonover. “We’re not a group saying ‘Drill Baby Drill’,” he added.

With that mindset, Schoonover began to research, following the formation of the landowner’s group, and soon discovered Gasfrac out of Texas, and their process that claims to utilize LPG versus water.

Schoonover described the current process being utilized in most areas, to include Pennsylvania, in which 99.6 percent of the material is water and sand, and the other 4 percent utilized is chemicals such as hydrochloric acid.

So when Schoonover learned of Gasfrac, it was good news for him – environmentally.

“Here’s a technology that gets away from chemicals and the use of water,” he said. “LPG is from the earth anyhow.” He added that the current process of hydrofracing being utilized, however, can also be done safely under the right circumstances. “This process gets rid of some of the current problems such as waste disposal and increased truck traffic.”

But when Schoonover learned of the company, he didn’t jump into things right away – he gave it time. “No wine before its time,” said Schoonover of the wait to see where the company had accomplished some things. Currently, Schoonover added, the company has done extensive drilling in both Texas and Canada, and is slowly moving into New York.

Schoonover also feels that the stalling of drilling in New York State, while landowners await a release of the Supplemental Generic Environmental Impact Statement (SGEIS) from the Department of Environmental Conservation, has been to their benefit.

“Since New York has stalled,” said Schoonover, “and if we like what we see … maybe this will help us move forward.”

In the meantime, Schoonover has developed a position paper on the prospective use of Gasfrac’s technique, and will be speaking with politicians. Schoonover is hopeful that this water-free process will get things moving forward.

And although Schoonover realized that there would still be issues with truck traffic and other things related to the gas drilling industry, there would be no waste derived from the drilling sites, and no issue on where the water would be coming from.

With that prospect in hand, Schoonover stated that the landowners hope to negotiate a deal on the approximate 100,000 acres available for drilling within Tioga County, New York. Additionally, he hopes to see things begin late in the year, or early into next year.

If they can drill, said Schoonover, it would take about four to five months to set things in place.

To learn more about Gasfrac and their technique, attend the meeting planned for April 14 at 6:30 p.m. in Owego. You can also visit www.tiogagaslease.org to learn more.

We reached out to a representative from Gasfrac for comment on their process, but were unsuccessful. It is understood that representatives from Gasfrac will be present at the April 14 meeting to answer any questions.


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## Cal (Jun 17, 2009)

This article will probably be elementary for some on here:

http://www.thestar.com/business/article/973005--olive-natural-gas-fracking-carries-unexamined-risks


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## PMREdmonton (Apr 6, 2009)

*GasFrac (GFS)*

This small oil services company really appears to be making a move this past week. As the name applies they are involved in the fracking business. Whereas most fracking is done with frac fluids and copious amounts of water to allow oil and gas to pass through the tight oil shale formations Gasfrac uses a form of propane gel that they have licenced from Chevron to do the same job. They have developed a whole closed loop system to do this where the propane gel is recovered.

The first big advantage of what they do compared to hydraulic fracturing is that there is no need for copious amounts of water supply or water disposal. With the world in constant water shortage and much of the oil shale plays occuring in areas where there are major ongoing droughts (i.e. West Texas, Alberta) this is a huge advantage.

The second big advantage from the first sites where they have applied their technology is the rate of production appears to be much, much higher.

Anyhow, I just thought I'd pass the name by those of you who are interested. There have been a few article on Seeking Alpha about them recently. Their technology appears to be a major leap forward with some proven results and they have recently signed some deals with companies in the US to assist them in oil and NGL extraction.

I have gone long 1000 shares this week and may buy some more (ACB: 8.30).

Here is a link to Seeking Alpha:

http://seekingalpha.com/article/358551-gasfrac-energy-new-evidence-of-superior-production-results


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## humble_pie (Jun 7, 2009)

there's an existing thread on gasfrac, perhaps the moderators could connect the 2.

last message in existing thread was posted almost a year ago. Here is the link.

http://canadianmoneyforum.com/showpost.php?p=59018&postcount=20


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## PMREdmonton (Apr 6, 2009)

There is more new recent news - they appear to have signed a MOU with eCorp who will use GFS's technology to do some gasfracs in Western Europe. 

This may be a prelude to some more licencing agreements to use their technology with presumably large gross margins which can launch their earnings faster than they could otherwise by increasing their own pumping supplies. It should also smooth out their earnings as they will not be entirely tied to the actual fracs they are doing. This is important since they only have around 125, 000 hp of pumps in service.

I do actually wonder if they wouldn't be better off to get out of the pumping game altogether if they can get fat margins out of licencing their technology to other pumping companies and just continue to work on improving their own technology which as made major leaps in the last two years. The biggest leap was the development of a closed system whereby they could recycle to propane gel they used to make the initial frac.

Combine this with now rather robust data that shows how much increased production you get (around 50% in the first year) and the fact that there is no need to bring in water (important in drought areas) nor deal with contaminated water disposal after the frac and it is easy to see how this can be a game changing technology in the unconventional oil revolution that is ongoing. They should be able to get large premiums compared to conventional hydraulic fracs from these inherent advantages.

The company made a major run about a year ago which got snuffed out due to a major spring miss due to inclement Canadian weather in the prairies which delayed their projects - just like another recent big riser - Petrobakken which has returned about 150% since its lows in September.


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## humble_pie (Jun 7, 2009)

from time to time i've seen the view aired that gfs should exit the drilling biz & just stick to licensing their technology.

i believe there is some cloudiness around one or more of the patents. I'm no expert here, but i've read something to the effect that chevron developed the liquified propane formula while halliburton has had a hand in technology transfer. In this view, gfs is thought to have a patent right to their particular usage only, as in truck-to-well-bore, but not to lpg fracking in general.


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## PMREdmonton (Apr 6, 2009)

humble_pie said:


> from time to time i've seen the view aired that gfs should exit the drilling biz & just stick to licensing their technology.
> 
> i believe there is some cloudiness around one or more of the patents. I'm no expert here, but i've read something to the effect that chevron developed the liquified propane formula while halliburton has had a hand in technology transfer. In this view, gfs is thought to have a patent right to their particular usage only, as in truck-to-well-bore, but not to lpg fracking in general.


The situation is that Chevron developed the propane gel and has licenced its Canadian use to Gasfrac.

Gasfrac owns the patents or has applied for patents for the technology they have developed to use the propane gel in fracking. 

Anyone can use the propane gel for this same purpose outside of Canada but they don't have the patents on using it to frack. They have developed a closed system to recycle the propane gel as a closed system which is a huge advantage.

So yes anyone can use the propane gel but they would have to develop an independent system for fracking that would not infringe on Gasfrac's patents.

Given this backdrop it would probably make most sense for one of the majors to partner up with GFS or alternatively try and acquire it. Given the value of the IP I suspect it would require a huge premium for GFS to sell out.


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## humble_pie (Jun 7, 2009)

_" Gasfrac owns the patents or has applied for patents for the technology they have developed to use the propane gel in fracking." _

this is what i mean by cloudiness. Ever since gasfrac came out of the venture pools & listed on the VSE, it's been said that they've applied for patents. Some/many think they already have the patents, but the exact fact is not clear & i tend to think not.

how long would it take to obtain a patent ? been 2-3 years already ...


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## PMREdmonton (Apr 6, 2009)

humble_pie said:


> _" Gasfrac owns the patents or has applied for patents for the technology they have developed to use the propane gel in fracking." _
> 
> this is what i mean by cloudiness. Ever since gasfrac came out of the venture pools & listed on the VSE, it's been said that they've applied for patents. Some/many think they already have the patents, but the exact fact is not clear & i tend to think not.
> 
> how long would it take to obtain a patent ? been 2-3 years already ...


Fair enough, but no one else has shown that they can do it and no one else is doing it.

Anyone that ventures into the field has to face the prospect of their operations being shut down in court. 

Given this backdrop why would any E&P company that wants to use gas fracking bother facing a court injunction when they could licence a proven technology to increase their production 50% with less environmental issues to worry about.


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## humble_pie (Jun 7, 2009)

around & around we go.

how can they license the technology unless they have a patent on the technology.

it's one thing to practice a technique, even if it does seem to trigger a few explosions now & then, but's another thing to license a technology on an exclusive basis.

it should not take 4-5 years to obtain a patent. Somehow i believe halliburton may be mixed up in this story.

like i say, it's a bit cloudy.


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## PMREdmonton (Apr 6, 2009)

humble_pie said:


> around & around we go.
> 
> how can they license the technology unless they have a patent on the technology.
> 
> ...


I think there is confusion about who developed LPG - it was from Chevron and not from Halliburton.

As for the licencing, they are already starting to get some partners who will use their technology - Blackbrush:

http://ca.finance.yahoo.com/news/gasfrac-signs-long-term-agreement-224748363.html

Here is another announcement from this past week with eCorp where they will enter a joint venture in Europe:

http://finance.yahoo.com/news/GASFRAC-eCORP-enter-MOU-ccn-2152827346.html?x=0

So if they have nothing to patent why did this deal happen? Why couldn't Blackbrush or eCorp just do the gasfracking and not involve Gasfrac at all as Gasfrac does not own the rights to use LPG exclusively in the US or Europe?

Anyhow, I view this as a gamechanging technology that is just getting started that we can now buy at a large discount from its momentum being broken from a weather quirk from this past Spring in the Prairies. I don't think opportunities like this come along very often so I'm jumping in headfirst at about 3% of portfolio right now but will average in to a 5-10% over the next couple of months. I see huge opportunities for them now that the E&P market has accepted the benefits of the new technology and are willing to pay up for the rights to use this technology. This will give them a huge spike in earnings without the need to hire large amounts of people or invest in large amounts of equipment. They can now continue to work on innovation and leave the grunt work and high capital expenditures to the energy service firms.


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## humble_pie (Jun 7, 2009)

yikes edmonton 10% of portf on a small cap just out of venture stage ... wow.

i tried to think what i hold at present (previously held more). It's barely a sneeze. Not even 1%.

re chevron & halliburton yes chevron licenses the formula. Everybody's clear about that. But the truck-to-well-bore loop which is so critical to operation success & to prevention of fires/explosions, here's where i believe halliburton has a history. One of the gfs technological gurus came from halliburton. The thinking in some quarters was that the big guys - chevron, halliburton - were conducting a dry run in canada before they would take the technology home on a large scale. Please note i did say in. some. quarters. Nobody knows for sure.

i really wish you great success if you do take up this 5-10% position. One thing holding me back is that i was early into gfs, as soon as it came out of the pools, so i've seen it drop from 14 to stagnate so long in the 6s & 7s, all this kinda wears one's enthusiasm down.


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## PMREdmonton (Apr 6, 2009)

humble_pie said:


> yikes edmonton 10% of portf on a small cap just out of venture stage ... wow.
> 
> i tried to think what i hold at present (previously held more). It's barely a sneeze. Not even 1%.
> 
> ...


Yes, investor psychology is extremely important.

I only came to know about this one as it was coming off its lows and some of their test results started to get published on their new closed system and the increase in production.

The water issue came to my attention on some other investing boards when they were talking about Heckmann which has bought a bunch of water trucks and has some water pipelines. They are running a big business right now trucking in water to some of these fracks that exist in drought conditions. Then some people started talking about the huge costs and this company up north that was doing fracks without water. Next thing you know they are publishing results, expanding into the US, signing licencing agreements with a well-known US fracking firm and getting into a venture in western Europe with another fracking firm. Then you look and see the stock has advanced 20% in a week.

I really do think they are going to change the fracking landscape now that they have all their ducks in a row with the new closed loop system and the 1-year results of their fracks compared to hydraulic fracks.

I do suspect they will either get taken out by a major or have some sort of joint venture with a major to really scale out their production in a big way but I am patient to wait.

Right now I have about a 2% position in my portfolio after a recent addition of cash has diluted everything a tich. I will ultimately go for a large bet on this company as I am pretty confident that I have gotten in on the ground floor.

The only other area that I am as excited about right now is the small biotech space in stem-cell technology and immuno-oncology. I see both as being big areas that medicine will be expanding into. There has already been considerable success in prostate cancer with Provenge and some upcoming findings in breast ca, brain ca and ovarian ca. There are also major results coming up in tissue engineering.

I do try to limit the speculative portion of my portfolio to 20% and I know there will be some winners and losers in that pile.

I will take it slow on GFS and will build a position slowly. I actually think it is quite a bit less speculative than Westport Innovations which has really taken off as of the past year.

I remember the board tried to caution me a bunch the last time I was this excited about a company which was Petrobakken as it was coming off of its lows.


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## PMREdmonton (Apr 6, 2009)

Here is another article from the Globe:

http://www.theglobeandmail.com/repo...an-energy-renaissance-at-risk/article2365172/

It seems with all the worries about fracking fluids contaminating water supplies and the issues with wastewater disposal that gas fracking makes a lot of sense. Combine that with the cost of water importation to drill sites, the fact that drill sites are often in drought areas and the fact that gas fracking improves rate of oil extraction suggests gas fracking is about to boom.

Still plenty of room to jump on the gas fracking bandwagon. The price went nowhere last week - first way down and then back up.


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## humble_pie (Jun 7, 2009)

gasfrac plummetted to the 5.40 range today following this news:


*Gasfrac shares slide on weak outlook*

April 10 (Reuters) - Gasfrac Energy Services Inc's shares fell 22 percent after the fracking services provider forecast sequentially lower first-quarter revenue on weak margins, prompting at least two brokerages to downgrade the stock.

The company had posted fourth-quarter results below analysts' expectation hurt by operational delays in its three-year contract with Husky Energy Inc.

"The Husky contract continues to ramp up more slowly than anticipated," BMO Capital Markets analysts Michael Mazar said ...


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## PMREdmonton (Apr 6, 2009)

Yep, really taking it on the chin right now with my GFS position.

The biggest problem that I see is last management was great on the product innovation side but really bad on the business management side of things. They built the system and proved it works but they didn't understand how to operate a fracking company nor did they understand how to market to E&P companies nor did they know how to let the market know what to expect from their operations. This lead to overly optimistic scenarios of revenue growth and profits that were just never feasible in the short-term.

The company is winning the major battles on the technology side of the company - less use of water, able to recycle the LPG, safety record established, increased production, increased recoverable reserves, able to get production where hydraulic fracks and oil foam have failed in the past, able to stimulate old conventional wells for markedly increased production. These bonuses are all available in the data they have collected.

However, on the execution front they have spent a long time demoing their technology without getting contracts, they have poor marketers of their own data and they have not sought out licencing opportunities to expand their reach and leverage their technology. Zergingue, the new CEO who as a big-wig at HAL in the past, has come on board and recognized these issues and is working on turning things around. Already several contracts announced - eCORP in Europe and a new play in NY where there is hydrofrack ban, Blackbrush in TX, Quicksilver in Colorado, Huskey in Alta and a few others on the go. They need to increase the efficiency of their running sets and prove they can execute with their technoogy. The second half of this year is vital to show that they can execute with their equipment and sign more contracts and start the ball rolling on the licencing front.

I am still long here and cautiously accumulating on this dip. I still believe in the company and technology and not much has changed about why I bought the stock yet. If they still can't expand revenues by the next quarter I will probably start to exit the position slowly but I would still hold out hope of a takeover by a larger firm who may be able to utilize the technology more profitably (i.e. HAL or BHI).


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## humble_pie (Jun 7, 2009)

i am certainly keeping what few shares i have left - around 1300 - but would want to see sh price definitely on the mend before i would resume buying. Another person could have an entirely different approach. 

as i once mention i've had gfs & have traded in & out ever since it first emerged from the capital pools. In the past there were truly memorable capital gains, so overall i'm not sorry. Let's hope that getting into fortress NY state will be the start of more successful histories ...


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## JustAGuy (Feb 5, 2012)

humble_pie said:


> i am certainly keeping what few shares i have left - around 1300 - but would want to see sh price definitely on the mend before i would resume buying. Another person could have an entirely different approach.
> 
> as i once mention i've had gfs & have traded in & out ever since it first emerged from the capital pools. In the past there were truly memorable capital gains, so overall i'm not sorry. Let's hope that getting into fortress NY state will be the start of more successful histories ...


Yup, I've got a bunch of shares in here too... so I don't really have much choice but to sit tight and wait for it to come back up now that it's at (what I hope) is it's bottom.


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## OptsyEagle (Nov 29, 2009)

I am in the same boat. Been very dissappointed in the company and share performance but I am torn between the two conflicting stories. On the bad side it appears that there is a slower then expected adoption of the LPG Fracking process and on the other side it appears that it is the best alternative to hydraulic fracking on both production rates and environmental safety. There is indication that they may actually break into New York which would give them almost exclusivity for new drilling in that state and have made a pretty good inroad into Texas.

When I add up everything from above and consider that most of the bad news was pre-new management (have to give them some time between starting (Nov. 2011) and verifyable results) and it does take time for any changes to show up in revenues, especially when you are providing a new process with significant differences from what they have been using. They have a tangible book value of $4.25 per share not accounting for all the patents. A process that only gets more valuable when you consider the experience Gasfrac has with it. Their revenues are still very good and will undoubedly produce a good profit this year. I have a hard time thinking that this company is not worth a lot more then the $335 million it is valued at today.

The 2nd half of 2012 almost have to surpass the expectations the market must have for it after a day like today. Anyway, I am pretty sure I am going to keep the shares I have. Maybe add more.


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## PMREdmonton (Apr 6, 2009)

The last time they had really bad news the stock bottomed the next day by about noon and I wonder if we'll see the same pattern here. We'll have to see how much further it dips but I think the bottom will be hit tomorrow and I'll try to accumulate then before the bulls charge in and push it back up to 6.25 - 6.50 or so before the end of the month.


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## moneyisfornothing (Feb 18, 2012)

PMREdmonton said:


> The last time they had really bad news the stock bottomed the next day by about noon and I wonder if we'll see the same pattern here. We'll have to see how much further it dips but I think the bottom will be hit tomorrow and I'll try to accumulate then before the bulls charge in and push it back up to 6.25 - 6.50 or so before the end of the month.


PMR
i bought .... some.
this one is a tough cookie though
cheers


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## PMREdmonton (Apr 6, 2009)

I bought a tranche at 5.50 - tough pill to swallow for sure.

I may try to buy some more if it falls further in the 5.00-5.25 range.

There is definitely value here - I don't know if this management team will unlock it but I know someone will at some point in the next couple of years because they are so far ahead technologically. Forget North America - there are huge unconventional oil plays in China and Europe that will be amenable to gasfracs. There are huge international plays in the desert where water trucking will be prohibitively expensive so gasfrac can go there. Right now they are trying to unlock NY which has banned all hydraulic fracks in the Tiogoba(?) region with eCORP as the partner in a very funny arrangement where there is a WI with the landholders set up and the landholders have agreed to allow gasfrac in to do the frack. Then there is Quebec.

This thing just shouldn't fail.

They have a big-time oil exec with lots of industry connections in charge now so I think he is going to make this work. He came out of retirement just to make this work. I think he'll get the job done. The last group were great scientists and engineers but they weren't businessman and that's where they failed - execution of their business plan.

I'll try to buy some more tomorrow to lower ACB but I'm starting to get a higher weight than I'd normally like on a smallcap.


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## moneyisfornothing (Feb 18, 2012)

PMREdmonton said:


> I bought a tranche at 5.50 - tough pill to swallow for sure.
> 
> I may try to buy some more if it falls further in the 5.00-5.25 range.
> 
> ...


PMR
by your posts it seems that u diligently do ur homework .
the stocks u r buying now are to be held if u have the stomach for it.
ur buying stocks that are following a commodity that is going through a catastrophic event.
if the mkts dip lower, those values that you and i are entering at will drift lower for sure.
I mentioned that i have time for another junior, FEL and if it drops to the 1.5 range ... i will think about it.
the sentiment in regards to those companies is extremely bearish atm.
by the way AAV hedged some of their production.
I have seen a bit of institutional interest on it , but by far not a lot at all
i am taking a contrarian approach.
I read in another post that you are a doctor.
I am impressed with your capacity to find time to trade since doctor's have a very busy life.
cheers and good luck


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## PMREdmonton (Apr 6, 2009)

You know - I'm actually most comfortable when I'm contrarian. When everyone else is so sure that they are right, they are wrong a fair amount of the time.

The thing I always have to decide if we are talking value or growth and the approaches are entirely different.

For value you buy on fundamentals (i.e. profitability, cash flow, dividend yield) but you have to be careful and make sure you're not entering a value trap. RIM was a value trap in tech because they fell behind the technological curve in their industry. PBN was a value play because everyone was convinced they were using debt to pay the dividend but they weren't paying attention to the low P/E, low P/B, low P/CFO. Everyone was so convinced they were going belly up but I see all that FCF, increasing production and plenty of reserves and all I saw was value.

Growth is different because you have to vision to see what is the potential size of the market, why should this company get a foothold in this market, can they extract enough margin and market size to become profitable. I say yes to all these questions for GFS but is now time for the executives of GFS to execute - get those contracts signed and safely pump out those hydrocarbons for these E&P companies and make them happy customers. If you even just isolate yourselves to those plays where Gasfrac has the only solution to extract the hydrocarbons they should be wildly successful. If they can displace a bunch of hydraulic frackers from their stomping grounds that is even better. If they can convert those hydraulic frackers to become gas frackers and send GFS a cut that is even better.

This is a high conviction play for me.

Yes, I am a doctor. Investing in stocks is a hobby and a passion for me right now. I find it intellectually very stimulating and enjoyable. I can't believe I didn't get into it earlier in life.


Good luck with your investments.


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## indexxx (Oct 31, 2011)

Some very encouraging articles on Seeking Alpha:

http://finance.yahoo.com/q?s=GSFVF.PK&ql=1


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## JustAGuy (Feb 5, 2012)

Hmm... interesting how it dropped right back down at the end of day


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## humble_pie (Jun 7, 2009)

not really interesting at all, gfs is like that


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## dubmac (Jan 9, 2011)

Read this article about another perspective on the shale gas controversy in the US
This fellow (Berman) is a geologist who says, basically, that there is not as much proof as appears wrt the gas reserves estoimated in the big shale plays of the US.
https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20120418/GIARTHURBERMANPARKINSONATL
who's right? dunno - but sure looks like he's a burr under the saddle of those gas companies!


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## humble_pie (Jun 7, 2009)

thank you for the article, dubmac.

i'm an investor who is passionate about digging out & examining many sides to all big investing stories.

shale gas is a huge story for our times, with consequences - possible earthquake causation for example - stretching ahead for decades or even centuries into the future.

the most interesting & positive paragraph in your article comes at the end, where the natural gas supply association invited shale gas critic Berman to speak at their conference.

kudos to the NG supply association for being willing to involve itself directly in the controversy, apparently without the venom & spite to which Chesapeake stooped.

_"Art Berman clearly has the best intentions," said Skip Horvath, president of U.S. gas producers' group the Natural Gas Supply Association, which invited Mr. Berman to speak to its members at a conference last month. "He's just out of step with the rest of the geological community."_


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## andrewf (Mar 1, 2010)

He was on Lang and O'Leary last night. He had some interesting things to say. I have been puzzled as to why gas producers are drilling so much given the rock-bottom prices in North America. He agrees that it doesn't seem rational, but that it is also sending a confusing message to consumers, inducing investment in natgas burning infrastructure like power plants and heavy trucks. He suggests that in the medium to long term, prices will rise and many of those investments will turn out to have been uneconomic.

Also eye-popping was the decline rates of up to 100% (halving output) per year. That would require a mammoth drilling effort just to keep output steady.


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## OptsyEagle (Nov 29, 2009)

My understanding is that a lot of wells have a high content of Nat. Gas Liquids (NGL) that command a much higher price. As they drill for those they end up getting a crap load of regular natural gas, so they just sell it for whatever they get for it. It is this by-product, so to speak, that is adding to the price decline.


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## PMREdmonton (Apr 6, 2009)

Yes, the guys drilling for NGL or oil don't care how much NG is in the well. It is just a by-product they sell so they don't care at all about the cost of NG so long as it is cheaper to send for processing than to burn off at the site, I would imagine. So no matter how low NG price goes these guys will continue to send their NG to the market.

There are a huge niumber of NG players right now whose wells are uneconomic and they will fail if this environment continues and they don't have the financial strength to continue operations. At first they may sell a few assets to keep up with payments of debt and what-not but eventually they will have to be swallowed up by a stronger company who can then put those assets on ice until the NG environment is stronger. I can imagine XOM pursuing some acquisitions. Ironically, CVE is not pretty strong and ECA is weak and they probably would have been better off as one integrated company. Perhaps they can merge again and then use the financial strength of CVE to buy assets to hold for the ECA side of the division when NG prices are stronger. CNQ is also a mixed producer but they are getting killed by the Cushing discount that has been going on for the past year so they aren't as strong as you would think despite the high oil prices.

Getting back to GFS, regulations keep pointing to better days ahead. There are some comments out there that by 2015 all frackers will have to collect the methane from production. Of course, with GFS's closed loop system this is extremely easy. For everyone else, they will have to develop new equipment to do this and this will add to the expense of their operations. Then there is the fear of frack water use in drought areas, frack water disposal affecting water supplies, frack water disposal causing earthquakes. I am shocked that this stock won't take off from its lows.

All they need is one more major to sign up with them and put their fleets to use and this thing should rocket. It is so obvious they have a bright future in so many of these unconventional fields where they offer better production, higher EUR and quicker payback of wells drilled despite the extra cost of the LPG (which is minimized for most companies which can recycle the propane injected).

I am set to buy another tranche when and if it falls to 4.75 but have a lot of skin in the game already and want to still be able to buy more if Armageddon hits.


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## indexxx (Oct 31, 2011)

http://seekingalpha.com/article/485791-gasfrac-energy-the-intel-of-fracturing?source=yahoo
http://seekingalpha.com/article/502...red-dreams-and-the-u-s-potential?source=yahoo


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## humble_pie (Jun 7, 2009)

won't you please stop with the gasfrac pumping. Speaking as the founder of this thread, i've recently been sorry to see that some novice investors here in cmf forum have been blindsided by this last outburst of rah-rah-gasfrac cheerleading. Unfortunately they have lost a significant amount of their savings. I'd be happy to see the pumping toned down.

here's part of what i just posted on the argex thread:

_" 'nawar alsaadi' is the internet's best-known gasfrac stock pump. His numerous touts infect seeking alpha as well as yahoo finance."_

gasfrac is a surprisingly dogged-by-trouble company. Its brief history has revealed unexpected negatives, some of them accidental & no fault of gfs.

- the procedure is expensive.
- contrary to what some pumps proclaim, it utilizes sand & chemicals as do the hydrofrackers.
- a few explosions have occurred. It is said that decades ago, a similar compressed gas fracking loop was trialled by a major US producer but abandoned after fatal explosions.
- bad weather plus early 2012 spring breakup in canada have confounded gfs revenues; road bans do not occur in the US.
- the state of the gfs patent claims is presently unknown.

i sold most of my gfs holding in the months prior to the husky explosion at robb, alberta. I still have 1300 shares left & i am very happy to hold em. I'm hoping that the recent landfall contract in new york state will start to turn this perilous company around.

in the meantime, gasfrac imho is a highly speculative junior driller affiliate that appears to be suitable for risk-tolerant investors.


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## indexxx (Oct 31, 2011)

humble_pie said:


> won't you please stop with the gasfrac pumping. Speaking as the founder of this thread, i've recently been sorry to see that some novice investors here in cmf forum have been blindsided by this last outburst of rah-rah-gasfrac cheerleading. Unfortunately they have lost a significant amount of their savings. I'd be happy to see the pumping toned down.
> 
> here's part of what i just posted on the argex thread:
> 
> ...


Not intending to raise any ire here- simply posting info for discussion/opinions. "Pumping" is far from my mind, HP; I hold a small tranche of GFS (suitable for risk-tolerant investors, yes?), but couldn't really care less if they thrive or die. If it's a good technology, great! More output with less impact and the shareholders win. If not, I have Peter Frampton on guitar with Humble Pie to soothe my losses...


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## JustAGuy (Feb 5, 2012)

Wonder if the stocks will go down Monday now that this is starting to circulate facebook...: http://priceofoil.org/2012/04/17/its-official-fracking-causes-quakes/


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## PMREdmonton (Apr 6, 2009)

1. There were two fires, HP.

One occurred on a set where GFS had done nothing - it was due to the other company's work. Fires sometime happen at these jobs.

The other fire occurred very early as they rolled out the technology and they had to put in extra layers of safety to prevent such fires again. Since the mods there have been no fires or explosions in 16 months.

Their tech should actually be safer than others because it is closed loop and all the workers stay about 200 feet away.

2. Yes, the procedure is expensive - they have to reduce expense by recycling the propane and most majors can do this. It is more of an issue for small companies which don't have access to the refining to do this. For these companies GFS is working on a way to recycle the propane at the site to reduce cost. There are also cost savings from less trucking of water and there is no need to treat the waste water. Those are two big advantages.

3. The company has greatly expanded into the US and this will decrease the fluctuation in revenues.

4. As for the chemical claims they still need the sand to do the frack with the LPG as the proppant. However, they do not need water or hydrofrack fluids. The beauty of their process is there is no waste.

5. They do have some patents in place and others are filed. Regardless, they do have the exclusive licence to use LPG in NA so no one can follow their path. Anyone who chooses another path risks having to buy licences from GFS to proceed so it is quite risky for anyone to follow them. It is much easier for them to just buy licences from GFS to use a proven product.

There are a couple of things you also have to consider:

1. They may be able to do frack jobs in Europe and NY that are off limits for hydraulic fracs. They would have a monopoly there.

2. There are going to be new rules about capturing methane at these sites, perhaps by 2015. With GFS's setup they will be able to do so at no extra cost. All the other frack firms will have to buy equipment and develop procedures to comply with this and this will add considerably to their expenses.

I do agree GFS is highly speculative. It could go to 0 tomorrow. You don't invest money you aren't prepared to lose in a company like this. It is risky. But it could also be a 10-bagger if they end up revolutionizing the frack market. I actually feel a bit sorry for all the people investing in the pumpers because their business is rapidly losing margins as the pumping ability is commoditized and more pumping power is coming onto the market. SLB's margins were so low now on the pumps that they want to spin off the business and focus on higher margin products. All these companies that pump - HP, CJES, FRC, TCW .... they can all see marked contraction in their earnings over the next while. I would be quick to sell these plays if earnings start to disappoint.


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## PMREdmonton (Apr 6, 2009)

Actually this would be very positive news for GFS as the component of the process linked to earthquakes is not part of a gasfrac. There have been similar rumblings about this in Ohio. I would view this news as probably strongly favorable for GFS in the long run although there could be some short-term move to the downside.

The other concern about leakage of methane is also a problem potentially solved by the gasfrac technique. There are rumours that all frackers will have to have a system to capture the methane by 2015. Since GFS does a closed-loop frac there is no problem being compliant with this.


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## humble_pie (Jun 7, 2009)

just before 3 pm today, gasfrac plummetted to new lows of 4.85 cad, 4.88 usd while recovering slightly to close around 5.00 on combined volume of 1.7 million shares.

the ugly plunge was thought to have been triggered by a block dump by leading GFS tout nawar al saadi, often mentioned - no, let's make that warmly mentioned - by certain gasfrac enthusiasts in this forum.

here is al saadi's message posted late this afternoon in a semi-private yahoo discussion group focused on gasfrac. At least, it appears to be his message.

_" The decline today was caused by a large block I sold later in the day; my action
was 100% unrelated to Gasfrac, I needed the capital to take a 5% ownership
position in another company in order to execute on an activist plan I had. "

Regards,
Nawar_


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## PMREdmonton (Apr 6, 2009)

Hmmm..... I wonder if that is capitulation I smell in the air.

I bought some more on the drop - got to lower my ACB by a bit but I"m still keeping dry powder because who knows how low this can go from here.


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## humble_pie (Jun 7, 2009)

edmonton as a young doctor only 6 years out of his residency, aren't you supposed to be on Grand Rounds in the hospital at this hour.

seems a bit strange, the way an alleged junior MD would spend so many of his mornings researching & posting about trashy stocks.

did you rush from the bedside of a dying glioblastoma patient to send in your frantic gasfrac buy order ...


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## OptsyEagle (Nov 29, 2009)

My personal opinion is, that if a person is on this site to learn more about investing, they are eventually going to have to grapple with the fact that when a person owns a stock, they are most likely going to be very optimistic about its future and will appreciate it very much if everyone they tell the story to, decides to buy it as well.

We call that pumping, and it is, but it doesn't have the conspiratorial underlay that many site. Most people who pump do not dump. They hold the stock because they believe completely in their thesis. Now, like many stories and this speaks for many of mine as well, the story does not work out and the stock declines.

My point is that anyone new to investing will eventually have to learn to read a posters opinion with the grain of salt it requires. They will most likely learn this lesson by loosing money, but in investing, most lessons are learned that way. Personally I still like to hear the opinions. I learned quickly to give Nawaar's posts the bias they deserved but still got some useful tidbits out of them.

I own Gasfrac as well. I believe in the technology, but I personally have never seen it used, I have no idea about the true financial metrics it offers that would be analysed by a legitamate drilling engineer. It is a very speculative play, but like others would be more then happy to have everyone pile into it by this afternoon. I don't mean anyone financial harm and if they lose money they can take comfort in my losing money along side them, but at the end of the day, they need to learn this part of investing. Most will learn it the hard way. I am sure I did.


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## Toronto.gal (Jan 8, 2010)

Filtering the positive from the negative facts about penny stocks, the most speculative & dangerous of all, requires tremendous knowledge/research skills/time, etc., that only a very, very few possess, and when people go out of their way to talk daily/weekly about several penny stocks on a forum like CMF & with over-the-top convictions, I also get suspicious [regardless of information provided, good or bad]. 

Sharing information about a new technology, stock, etc., is one thing; promoting/pumping and forever sharing one's ACB and DCA strategies is another.

The dangers of penny stocks are many [liquidity, manipulation, just to name a few] & probably the worst & most painful decision that some have/will have made. 

HP is trying to protect the gullible/novice investors here and I support the comments even when everyone is responsible for their own investing/failures/successes.


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## HaroldCrump (Jun 10, 2009)

My main concern with these couple of threads (GFS, Argex, etc.) is that other than a small one-line disclaimer buried among 2 pages of posts, there is no balanced view presented.
The stocks in question have been described with hyperbolic language as if they were a sure-thing.

This is not a big bank or big telecom stock we are talking about here, which can be easily research by almost anyone with a computer and a pulse.
It is one thing to say that _Bank of America stock is about to go through the roof_, and quite another thing to talk about these types on companies in the same manner.

These stocks are arcane, and the technology they deal with requires specialized knowledge.
The owners and backers of these companies are shrouded in mystery and often located abroad, pulling the strings through a myriad set of holding companies.

The degree of optimisim and confidence expressed about some of these stocks obviously leads to suspicion of various kinds.

Evidence the fact that as a result of these discussions, at least one poster has already bought into these stocks - possibly more silent ones could have, and we just don't know because they don't post.


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## OptsyEagle (Nov 29, 2009)

What about the investors that buy into the stocks that are talked about, that go up. Where's the discussion about that.

My point is that I read these discussions to hear about stocks that I have not really looked at too closely. Obviously if someone owns it, they will be optimistic about its potential (if not they would not own it anymore). This will always create a bias, that the reader will need to understand. I don't believe that the lions share of positive posts are from someone hoping to have others pile in, just so that they can sell immediately. I am quite sure they would like to see others pile in, why else would they have bought the stock in the first place.

In summary, if posters did not give their opinions on the stocks that they own, which undoubtedly will be very bullish, then you will find that the ability to find any information about any stocks would severely diminish. I also appreciate the negative opinion as well. As I do my DD I tend to be able to find it fairly quickly, before I make my investing decision. I suggest others work hard at doing the same. It is about the only part of this lesson that I learned, that can at times, be very helpful.

The bottom line is. Anyone who is going to read a post, from someone who owns the stock (you can usually tell from the post) and buys it on that information alone, was destined to lose their money in the end. Their experience was obviously not high enough to preserve it and there is little anyone here could really do about that. All that being said, I appreciate all comments, positive or negative. It helps me discover new ideas and see alternate viewpoints.


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## Toronto.gal (Jan 8, 2010)

HaroldCrump said:


> The degree of optimisim and confidence expressed about some of these stocks obviously leads to suspicion of various kinds.


Like for example saying that a drug in Phase II trials *"will* rock the world when it comes out." While I'm a fan/investor in the pharma sector and appreciate knowing what companies are researching what, NOBODY knows for sure until the FDA results come out. Case in point, many drugs have failed even with outstanding Phase III data. The one that was mentioned to rock the world, may very well be the case, but to say that it will succeed for sure, is simply false.

Interestingly enough, when I commented about being careful with such stocks to the above mentioned, I received NO reply. :smile:


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## HaroldCrump (Jun 10, 2009)

Perhaps the best parallel example we can draw are the RE pumpers on here.
Many of them are genuinely optimistic and bullish about RE.

But it is one thing to be an experienced, knowledgeable RE investor, fully aware of the nuances of property selection and management, the risks involves, the legalities and regulations, etc.
It is another thing to egg on newbies, with stars in their eyes, into an extremely competitive and risky market, fraught with unscrupulous brokers, agents, loan sharks, tenants, etc.

We have this situation described above come up very often.
And each time someone or the other questions the motives of the poster.


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## PMREdmonton (Apr 6, 2009)

Toronto.gal said:


> Like for example saying that a drug in Phase II trials *"will* rock the world when it comes out." While I'm a fan/investor in the pharma sector and appreciate knowing what companies are researching what, NOBODY knows for sure until the FDA results come out. Case in point, many drugs have failed even with outstanding Phase III data. The one that was mentioned to rock the world, may very well be the case, but to say that it will succeed for sure, is simply false.
> 
> Interestingly enough, when I commented about being careful with such stocks to the above mentioned, I received NO reply. :smile:



If you don't believe blank company and their new drug which is actually a vaccine against several tumour markers of cancer stem cells is going to be a revolutionary product because results are limited I can accept that. This is a condition that I treat and I know what the results are for the cancer involved - quick death. People don't live 3 years with this condition. The vaccine allowed 40% of patients to achieve this status. This is a cancer that affects young people - in their 20s and 30s. The initial study was done under controlled conditions and should be repeatable.

The beauty of the technology is that they developed a methodolgy to creating these vaccines very cheaply and can produce a tremendous supply of them just from one sample. This was a giant leap in the field compared to Dendreon and their drug Provenge for prostate cancer which was very expensive and provided minimal gain in life expectancy. Yet that durg has taken off. The company I have been following also has agreements in place regarding licences for several other tumour markers for different cancers so they may be able to develop a pipeline of similar vaccines.

I know several other drugs look good in early studies only to fail later on but this treatment almost certainly won't have major side effects because it is a vaccine against tumour markers. It is not really a drug as much as it is your own immune system tweaked to kill the tumour. The next reason why the results were significant is they were looking at a very hard data point - death. The 3rd reason it is important is it didn't just barely beat placebo - it crushed it. The 2-year survival was 80% on treatment versus 27% from typical standard of care (radiation and chemo). That is a stunning achievement. They now just have to finish off the next phases of trials in placebo trials and then go into production.

Their current pipeline has a number of upcoming targets. They are actively developing a treatment for ovarian cancer at the moment. They may soon be going onto colon or breast cancer.

I like the company's chances but early biotechs are always a big gamble. That's why I haven't written about them much.

The board does not appear receptive to open talk about promising young companies so I won't bring any of them up again. All I wanted to do is stimulate conversation about the companies but all I got was a kick in the nads and ridicule. The only thing I might do is give relevant news-based updates about threads I have already started like I did this week on Argex only to be attacked again for quoting a news release.


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## humble_pie (Jun 7, 2009)

edmonton this is a decent forum. If i were in your place i would be ashamed of myself. Here is just one of your lurid statements. This one is from 18 april/12.
_
" ... IMUC ... are in phase II trial of a product that will rock the world when it comes out. GBM is a devastating brain cancer that strikes young people and I hvae treated many people with this condition. Their results in phase I were earth shattering - 40% survival at 3 years compared to usual hx of 12 months."_

you are implying here that the new IMUC product in Phase I trial showed a human 40% survival rate after 3 years.

the problem here is that the IMUC trials to date do not include one single human subject.

all Phase I & Phase II testing involves laboratory animals or in vitro studies only. A principal reason is to protect human subjects - who are nearly always suffering from a major disease to begin with - from unknown dangerous side effects associated with an untested chemical.

Phase I & Phase II studies are designed to show that it is probably safe to proceed with human subjects. It is not until Phase III that actual human test subjects are used for the 1st time.

Immunocellular Therapeutics confirms that testing to date does not include any human subjects. Testing has consisted of computer algorithms, human cells in vitro, and live mice studies.

http://www.reuters.com/finance/stocks/IMUC.OB/key-developments

to post up purple prose as you have done in this forum, forecasting that a Phase I result is "earthshattering" or that a new drug "will rock the world when it comes out," is imho unspeakably irresponsible.


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## PMREdmonton (Apr 6, 2009)

Yes, it was a phase I trial.

Yes, it did involve human subjects.

Yes, they are doing a larger phase II trial.

I absolutely do not recommend anyone on this site ever invest in this company. It is far too risky - I only gave some information to defend myself about my terrible results on the companies I have picked. The last couple of months have been a terrible time for high risk companies and many have been crushed.

I really feel like I am being attacked about these small companies and I don't want to talk about them anymore. I won't bring them up but what you said about this company is 100% false.

You can read about the company here:

http://www.imuc.com/imuc-10-05-2011

HP, when they talk about patients they mean humans. We don't refer to mice as patients.

Here is some more information for patients interested in participating in phase II of the study:

http://www.imuc.com/about-ict-107.php


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## PMREdmonton (Apr 6, 2009)

Here is a proper description of the different phases of clinical trials for those who are interested. Notice that phase I and II involve humans.

http://www.nlm.nih.gov/services/ctphases.html

Do you have anymore falsehoods to spread?


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## PMREdmonton (Apr 6, 2009)

I looked at your link HP. I see no evidence there that IMUC has not used its treatments on humans. You'll have to find another website source with your "evidence".


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## londoncalling (Sep 17, 2011)

I see nothing wrong with you posting your opinions PMREd. I myself choose not to invest in penny stocks but I have been following your threads with great interest to see where these stocks will go much like I am following the thread on Africa Oil. Do I plan to buy any of these stocks listed? Most likely not. I was curious with Poseidon but only because I have a bit of understanding in the business as I used to work in the oil industry and often talk to people still in the industry. I meet with a process engineer at Husky every few weeks just to keep up with trends in the industry. (and the beers are good too. :encouragement.

I take most posts on most threads with a grain of salt. If people want to DIY they should be far advanced enough in their learning curve then to jump on the first "pumped" stock they read about on a forum. If they are dumb enough to invest in that manner than it makes me wonder why they still have any money to invest. I think if people are willing to purchase a stock based on what they read on a board they deserve to fall to the same fate that they would on playing roulette. As the old adage goes "a fool and his money are soon parted". This is not to say that I know if the stocks PMREd has been posting about are good bad or otherwise(I haven't taken a closer look to make that decision for myself).

Those who feel that they need to come to the rescue of these fools, feel free to post about how risky these investments are, why they are risky etc. We are very lucky to be able to live in a country where we can express our opinions, there are many people that have died or are willing to die for that opportunity. Please keep posting no matter what your opinions may be(provided they follow some line of reasoning and are respectful) and let the readers decide.

Cheers and good luck out there


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## humble_pie (Jun 7, 2009)

IMUC is far & away edmonton's best pick.

it's a class apart from loser shockers like gasfrac, argex, catch-the-wind.

let's hope for canada's sake that edmonton's gains in IMUC will offset his penny stock losses. We need high-performing medical specialists in this country.


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## PMREdmonton (Apr 6, 2009)

Time will tell, HP.

I've held most of those for only a month or less in a market that has not been liking risk. I'm down a lot on GFS, and about 15% on CTW/RGX. I still believe in my thesis on all these companies and am patient with them right now. They are extremely volatile and collectively make up about 7% of my holdings. They are my "gambling" money on some micros where I like the thesis. I ventured in prepared for a possible loss or possible gain. I want to figure some things about myself early in my investing career before I am putting down huge sums of money on these things. I write about them only because I find them very interesting and am hoping to spark some conversation or get some opinions from those more learned than myself.

However, I still don't know why you are saying false things about them? RGX does have a controlling interest in the extraction process known as CTL to get TiO2 out of their ilmenite ore and IMUC has done a small trial of 16 patients on humans with their new vaccine technique for glioblastoma multiforme. Whether or not you agree with the investments, those are critical elements to my investing thesis that you seem to believe are false.


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## moneyisfornothing (Feb 18, 2012)

PMREdmonton said:


> Hmmm..... I wonder if that is capitulation I smell in the air.
> 
> I bought some more on the drop - got to lower my ACB by a bit but I"m still keeping dry powder because who knows how low this can go from here.


welll.........
do not tell me that i did not tell u so
actually today was the lowest low i have seen so far.
tough cookies those natty companies:hopelessness:


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## moneyisfornothing (Feb 18, 2012)

PMREdmonton said:


> Hmmm..... I wonder if that is capitulation I smell in the air.
> 
> I bought some more on the drop - got to lower my ACB by a bit but I"m still keeping dry powder because who knows how low this can go from here.


r we there yet?
do u really have the stomach for this tough cookie?
alll time low today of 3.92.
closed at 3.99.
just wondering here.
i have bought no more ......yet:hopelessness::rolleyes2:


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## PMREdmonton (Apr 6, 2009)

I haven't bought any for awhile now.

I won't buy anymore until they get closer to reporting Q3 as they likely won't have a catalyst until then unless a major decides to sign with them. All the land based drillers have been hit to some degree but none worse than GFS.

I still haven't sold any and no plans to sell any.

If anything I am more convinced of my investing thesis than before. The bad news keeps piling on with hydraulic fracturing with more fears about water contamination, more fears about earthquakes from injection of contaminated frack water, pending legislation about need to capture methane from fracking sites, worsening drought conditions around the globe, the giant amounts of shale gas that likely exist in China and Saudi Arabia.....

So I still think there is a future with this technology even if it doesn't occur with this company. They are well priced for a takeout offer now by one of the big wigs like SLB or HAL.

If only they could go out and execute this technology and develop the on-site propane recycling bit of the technology they could appeal to small E&P companies and begin to take off from there. That really should have been the number one priority for them over investing in more HP for pumping or hyping their stock before they were ready to become a mass provider of energy services - previous management bit off more than they could chew. The sad part is they were so good on the technological front and developed a ton of IP in this field that I am convinced is worth a small fortune.

BTW, a new avenue of business may be open to them soon. Two of the GFS board are now acting as technical board advisors to a small E&P Texas firm who plans to buy up old wells and stimulate them with modern fracking techniques and extract more oil. I had remembered earlier reading about some good results they have had with old well stimulation and maybe they have themselves a partner now in the USA who will put them to work and increase the utilization rates on their sets.


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## dubmac (Jan 9, 2011)

How cool is this!
GasFrac is developing a way to frack without the use of water - and (so they say) all those nasty chemicals - this could be quite a step forward and perhaps help reduce the many/mulitide of environmental concerns that are part of the fracking debate..
read on.....
http://resourceinvestingnews.com/36090-waterless-natural-gas-fracking-method-unveiled.html


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## PMREdmonton (Apr 6, 2009)

Gasfrac has popped up a bit after the last two trading sessions and is now back up to 4.61.

The earnings weren't disastrous so it looks like some people decided to jump back in to drive the price up.

The utilization rate was horrific in the first quarter and was somewhere around 18%. I know they are targeting 45% utilization so if they can get up to that there is a potential for large gains. It does sound as though they are still charging a lot for each frac job at about $500K per day per set so the margins are still there.

They seem to have found a couple more customers which is important as the vast majority of their revenues in the last quarter came from only 3 sources. Their deal with Husky is still on and they will be doing more jobs. They are still working with Blackbrush and Quicksilver. It sounds as though they have done some work now for CHK. There are rumours that jobs have been done for Chevron and maybe Shell. According to CEO the companies are watching production rates over the first 9-12 months to decide if the process makes economic sense.

The other big thing to come out of the conference call is it sounds like they have completed a technique for capture of about 90% of the LPG. They claim this could be reused for another frack or alternatively sold on the market as LNG. This should dramatically reduce costs for smaller E&P companies which lacked this capability and thus were paying higher effective rates for GFS's services than a major who could recapture the propane with their infrastructure further upline. I also think this will be a boon when doing jobs in more remote locations.

There apparently was a lot of heated discussion at the shareholders meeting as many were upset with the CEO's leadership and communication abilities. They were upset about low utilization rates. They were upset that current share price was not reflective of the value of the technology they have. Apparently the board was not ready for the reaction they received.

Well, the stock has stopped hemorrhaging for now. I do like the political backdrop that we are experiencing right now with more and more heat being applied to the environmental side of fracking. I am hopeful that if we are close to cost neutral once correcting for all other associated costs of hydraulic frackers that some companies will start hiring GFS and touting that they are trying to be as environmental friendly as possible - less trucks, no water consumed, no dirty water to dispose, no earthquake risk.

I am still hopeful with this one and am still overweight. I'll continue to wait before buying more but I might bite if we go down below 4 again.


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## PMREdmonton (Apr 6, 2009)

Since we have been talking about all the wastewater that comes out of these hydro frack jobs, I thought I would remind everyone that there is another play in this industry called Ridgeline Energy Services. They essentially have developed a process to efficiently treat wastewater that is low cost and superior to anything else currently out there. Now with all the noise about deepwater injection into these frack jobs of the toxic brine that they produce causing earthquakes there will be pressure on the E&P companies to treat the water and possibly re-use it due to water shortage issues. This is where Ridgeline services comes in. They have recently been pummelled from a top of 1.30 to 0.70 now. They are still in freefall and they recently had an announcement of a private placement to generate more funds to build a treatment plant in Texas for treatment of wastewater from frack jobs. This is in addition to a similar announcement in April. I really see this one as a growth play on the shale plays. Here are a couple of recent new bits about them:

http://www.ridgelinecanada.com/s/Ne...line-Executes-Industrial-Waste-Water-Contract

http://www.ridgelinecanada.com/s/Ne...-Agreement-for-Six-Water-Treatment-Facilities

My usual proviso of these small cap plays applies. These stocks are very volatile and have been getting killed recently. This stock has dropped almost 50% in the last two months. There is a virtual guarantee that this stock will collapse if you buy it and you could be staring at a 80% haircut. Only buy this stock if you are very bullish and can afford to lose all the money you invest in this company. I believe the company has major potential but another competitor could come in and steal some of their business or they may not be able to charge adquate margins to be profitable. They are selling at 5 times sales presently and still have negative EBITDA so they are not profitable. The stock may be further punished for doing this placement at 0.70 to raise funds as this will cause further dilution of existing shareholders.

Disclosure: I don't own any of it and probably won't buy any of it as I have too many risk plays right now. However, I may change my mind if it continues to drop like it has been.


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## FrugalTrader (Oct 13, 2008)

Are you guys still following this stock? It's down in the $1.20's right now.


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## HaroldCrump (Jun 10, 2009)

I thought I'd revive this thread based on the recent news of proposed hydro fracking near the *Gros Morne National Park*

_Gros Morne, with its glacier-carved fjords, waterfalls, sandy beaches and spectacular cliffs, is a hiker's paradise that was designated a UNESCO world heritage site in 1987.

But there are growing concerns about a proposal by Shoal Point Energy Ltd. (CNSX:SPE) and Black Spruce Exploration, a subsidiary of Foothills Capital Corp., to hunt for oil in shale rock layers in enclaves surrounded by the park. 

The plan involves using hydraulic fracturing to drill several exploration wells on Newfoundland's west coast in the Green Point shale near Gros Morne._

http://ca.news.yahoo.com/potential-fracking-gros-morne-raises-concerns-uns-world-093930297.html


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## Feruk (Aug 15, 2012)

The issue is not hydro fracking and despite media portrayal it never has been... It's always been shoody workmanship on the wellbore itself.


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## Hawkdog (Oct 26, 2012)

Feruk said:


> The issue is not hydro fracking and despite media portrayal it never has been... It's always been shoody workmanship on the wellbore itself.


and how much water is used. this is a big concern during drought years. obviously not a concern in Calgary right now.
there are companies online and coming online with water recycling purification technology which limit the amount of water than needs to be extracted from rivers etc.


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## junior minor (Jun 5, 2019)

*What I wonder is, what are the long term consequences of all this?*

I spoke with a person that went in Calgary twenty years ago, personally I worked in the city yet flew around it on my way to British Columbia, a decade or so ago. The surroundings were somewhat akin to a checkerboard, with lots of what seemed to be tar pits. 

The remote regions are apparently full of places like this Fox creek, which host sometimes more people in the work camp than the actual city. (as told in the financial post article)

The money is good right away, yet what consequences will it leave in the future? While working in BC, I found that the Alta gov made up its own panel for site inspection, meaning that no one else could have their say regarding the situation.

I'm not a citizen of this province yet the effort it is doing to keep this country floating are quite amazing. Can't really afford the shell(and other big players) stock, nor would I want to work for them. Still, there is hope that this will grant Canada a future, albeit perhaps a very grim one in terms of environmental health. Suzuki hotlinked a book back in the days mentioning that it would take one ton of oil sand to make a single oil drum.

And if I read from this other source, it tells me it takes two. source: theoildrum website


The remaining 20% can be extracted by open-pit mining techniques. After the excavation or drilling, bitumen is extracted from the remaining mixture of sand and water. About two tons of tar sands are required to produce one barrel (roughly 1/8 of a ton) of oil.


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## AltaRed (Jun 8, 2009)

The checkerboard pattern around Calgary (or any prairie region) is hay and grain fields (in Kansas they are circles of hay and grain fields from circular irrigation systems)! The ones in the boreal forest are simply wellhead leases where production comes up via the wellhead and may have some pre-treatment before going to a processing facility. Each lease with any kind of pre-treatment must have a flare stack in case of over pressure so that the over pressure burns off rather than causing an explosion (flare stacks are at every processing facility including gas plants and refineries). So there must be a certain sized clearing to avoid a flare stack causing enough heat to catch nearby trees on fire. Everyone of these are engineered according to regulatory guidelines.


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## doctrine (Sep 30, 2011)

Thankfully we do have massive oil extraction in this country. It prevents us from being wholly reliant on corrupt foreign countries such as virtually every one in the Middle East. 

North America is effectively energy independent. Certain areas, even in the US, are exporting crude oil. Unthinkable even a decade ago. And the massive transfer of wealth that occurred from the Western world to the Middle East is now wholly in reverse as those countries run deficits and borrow money from those same countries to whom they used to sell oil. All due to fracking and oil sands. 

Now if powers that be want to transition to a low carbon economy, we can do it on our terms, and not under the grip of foreign dictators.


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## AltaRed (Jun 8, 2009)

NA is not oil independent yet, but it is not that far away. As of today, the USA still imports, on a net basis, about 7 million barrels of oil per day. Some from Canada, some from Mexico, but still about half of the 7 million from across the Atlantic.

Perhaps in 3-5 years it will be balanced as we get our 2-3 pipelines in service, and all the pipeline space needed to move Permian oil gets built.

NA does have a net surplus of gas production and hence LNG export facilities that are both in service, and getting built.


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