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Hedge fund manager, macro, long/short equity, contrarian
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I have been watching Ivanhoe Energy Inc. (NASDAQ:IVAN) develop a novel technology that allows for the extraction of oil from shale rock without the massive economic harm and carbon footprint left from such technologies. In fact, their technology uses the steam re-captured from the shale to continue to recycle its energy and has a Zero Carbon Footprint.

It’s like a tiny miniature oil refinery placed directly at the site of the shale well so that there is no need for massive amounts of water, no carbon emissions, advanced carbon recapture which can be sold as credits. It’s a long and arduous process for this technology to continue being tested and proven. In the meantime, management is buying up concessions all over the world to mine oil and gas from shale from Canada to China to Africa.

Conoco Oil was the original “sugar daddy” for this company, but all the majors sent shale samples from all over the world to see if their technology can be used universally, and it can. If you look at a 5 year chart of this stock, you’ll see a bear raid, then a bull rally, then a bear raid, then a bull rally, over and over again.

But in the process, the stock is being accumulated into long-term hands (including this writers) and I bet it will give me at least a 10 bagger over the next couple of years. Without even having to watch it for a second.

Why mention it now? Because it just closed a huge breakout gap from last week today, and is set to have an interesting 2011, as I expect all equity markets to.

IVAN can sell in the high 20′s if it continues down this path of buying up mineral rights. However, I think their objective, with these acquisitions, is to prepare themselves for a liquidity event, by which time they should be trading in the 20′s, so the buyout would be around the low $30′s.

Disclosure: Author is long IVAN

Source: Ivanhoe Energy Looks Set for an Interesting 2011