Unearthing hidden stock value outside of established and large corporations in the global energy sector calls for two fundamental stock investment skills: technology appreciation and evaluation of strategic degrees of freedom. The company under review in this piece, and scores very well indeed on both counts. It has novel technology, and has spread its projects all the way from California to China. The company has many alternatives to leverage the strong world-wide demand and price trends for crude oil and natural gas.
The conversion of natural gas to liquid is a key logistics consideration. Such conversion has even more than business significance when investors consider the global political implications of present natural gas supplies from Russia to European Union countries, and from the Middle East to potential new customers as in the Indian sub-continent. The company has a pivotal strength through its Chinese operations, given the enormous influence of that country on global oil and gas consumption levels.
The company is also able to upgrade some grades of crude for new levels of productivity. It has succeeded in demonstrating this technical capability in the oil sands of Canada, quite apart from its stable operations in California. This augurs well for its participation in the newly discovered and huge natural reserves of North America. The company has built up assets of well over $200 million with the most conservative gearing: total liabilities have been below $35 million at the end of September 2007.
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