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Nawar Alsaadi

 
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  • Gasfrac: Superior Production Results [View article]
    It is true lower NG prices have hit the fracking sector; even though in the case of Gasfrac virtually all of their business is tied to NG liquids and crude fracking; specifically their business is currently focused on liquids in water sensitive reservoirs, low pressure or depleted reservoirs where water fracking is not compatible or not as effective; this specialized feature of LPG fracking and the lack of competition for it, should support their pricing and margins, should the industry takes a downturn.

    Regards,
    Nawar
    Jan 21 09:27 PM | 2 Likes Like |Link to Comment
  • Is China Entering A Shale Gas Boom? [View article]
    The solution to the China water shortage is waterless fracking, Gasfrac has done over a 1000 fracks with gelled propane, no potable water is used, and no waste water is produced and on top of that oil/gas well performance is improved; it is a win-win solution for both the industry and the environment.
    Jan 20 10:53 PM | 1 Like Like |Link to Comment
  • Gasfrac: Superior Production Results [View article]
    rk, I guess I will just report what I just wrote to john:

    There is nothing specific that caused the stock recent weakness, the volume of traded stock is quite low, a large investor exiting or entering the stock can easily push the stock one way or another; it is important to keep in mind that this is a long term investment and will take sometime to play out.

    Another point to keep in mind the whole fracking sector has been very weak recently, this is also weighting on the stock to some extent.

    Regards,
    Nawar
    Jan 20 06:52 PM | 1 Like Like |Link to Comment
  • Gasfrac: Superior Production Results [View article]
    John, there is nothing specific that caused the stock recent weakness, the volume of traded stock is quite low, a large investor exiting or entering the stock can easily push the stock one way or another; it is important to keep in mind that this is a long term investment and will take sometime to play out.

    Another point to keep in mind the whole fracking sector has been very weak recently, this is also weighting on the stock to some extent.

    Regards,
    Nawar
    Jan 20 06:51 PM | 1 Like Like |Link to Comment
  • Gasfrac: Superior Production Results [View article]
    The LPG gel has been developed by Chevron/Halliburton (HAL) in collaboration with Mr.Robert Lestz, Gasfrac’s CTO who was working with Chevron at the time. Chevron awarded Gasfrac an exclusive licence to use the LPG gel in Canada and a general licence to use the gel in the US. The company eventually developed its own methods to gel propane.

    However, gelling the gas is only the first step in the process, using the gel in a fracking operation is a whole different ball game.

    Gasfrac has developed its own nitrogen closed looped system in order to be able to use the gelled propane safely in a gas or oil well fracking operation. The company also developed the process of injecting the propane with Proppant (sand). Gasfrac also developed a host of automated safeguards and remotely operated modules to undertake LPG fracking from a distance (to minimize risks).

    The company has submitted over 17 patent applications relating to the gel and the fracture stimulation process; ten patents have been issued and seven are outstanding.

    Regards,
    Nawar
    Jan 19 11:16 PM | 2 Likes Like |Link to Comment
  • Gasfrac: Superior Production Results [View article]
    If I may add a further comment Craig, I think while we analyze Gasfrac LPG frack results; it is always important to keep in mind the environmental benefits associated with the technology; meaning even if in certain reservoirs the technology is equivalent to water based fracking in terms of production results; it will still have an edge in terms of lack of waste fluid; reduced flaring & CO2 emissions; reduced truck traffic (900+ per water frac, 30 for LPG). Also in certain areas enough fresh water maybe lacking to undertake water fracking. Mexico shale development has been mentioned as being hampered due to lack of water, and likewise for South Africa, The Middle East, Australia, parts of China and even areas in the United States.

    I wanted to make the above point, in order for the discussion not to be framed only in terms of superior production; but the other superior features of technology needs to be included in the discussion; of course those other superior features come at a higher price; thus in the end an operator may choose to ignore them unless environmental regulation is strengthened or water access is clearly lacking.

    Regards,
    Nawar
    Jan 18 02:06 PM | 2 Likes Like |Link to Comment
  • Gasfrac: Superior Production Results [View article]
    You are absolutely right Craig, I very much appreciate your even handed analysis of the company and the objective approach you have chosen in appraising Gasfrac and it is technology.

    I do fully agree with you, we should not extrapolate from this document alone; but the company and it is engineers are privy to much more information than we do; based on all the research I have done, I am quite confident that Gasfrac has encountered similar results in alternative reservoirs; but unfortunately and as I stated earlier most of their clients are not keen on SPE submissions.

    Having said that, it is certain that LPG fracking results will vary from reservoir to another and there is a fair chance that they wont be superior in every formation; I have been unable as of yet to quantify the addressable market for the number of reservoirs and formations where LPG fracking will prove to be superior; but preliminary indications signal that the opportunity is substantial, the deep basin in Alberta and Colorado shale are examples where LPG fracking appears to be very promising.

    Regards,
    Nawar
    Jan 17 11:56 PM | 2 Likes Like |Link to Comment
  • Gasfrac: Superior Production Results [View article]
    Craig, please refer to the presentation related to Document 144093 filed with the SPE (starting slide 16) you will have information on fracture length in the McCully Gas Field:

    http://bit.ly/A0bFxU

    It is worth noting that most of Gasfrac clients refuse for the company to share information on well performance after application of LPG fracking; They were working on a paper for the Marcellus, and this is what happened according to the company CTO:

    "That operator approached GasFrac about preparing a technical paper for the industry on the results of those wells. GasFrac was more than pleased to share those results and have them known by everybody. …However the operator's parent companies — who owned the well — did not want that work shared broadly. So one can draw their own conclusion to how that work came out. Unfortunately through confidentiality agreements with our customers, which we value, we're not at liberty to share the actual results.

    http://bit.ly/zWYNTa

    I take operators refusal to share results as a bullish sign.

    Regards,
    Nawar
    Jan 17 11:36 PM | 2 Likes Like |Link to Comment
  • Gasfrac: Superior Production Results [View article]
    g8, please refer to the presentation of document No.144093 filed with the society of petroleum engineers, (starting slide 16), you will see the relevant information regarding the effective fracture length in the McCully Gas Field:

    http://bit.ly/A0bFxU

    Regards,
    Nawar
    Jan 17 11:03 PM | 1 Like Like |Link to Comment
  • 3 Picks And Shovels Companies To Play The 'Fracking' Boom [View article]
    I agree fish, Gasfrac offer excellent potential; their technology continue to gain acceptance, Q3 was a record quarter and Q4 is expected to be even better; however 2012 should prove to be the real breakout year for the company.

    Regards,
    Nawar
    Jan 17 10:42 PM | Likes Like |Link to Comment
  • Gasfrac: Superior Production Results [View article]
    There were quite few reasons for the decline in the stock price last year, a couple of reasons were related directly to the company; in Q1 they had an incident which halted their business for three weeks, and resumed at only half capacity for the rest of the quarter; in Q2 western Canada where most of their clients were located experienced the wettest season in 33 years, thus preventing the company from accessing customers well sites; as a result the company had a very weak first half in 2011; in Q3 the company had a record quarter, but by then the whole fracking sector took a hit; other then that there were some other minor issues; those have been largely addressed with the management and staff changes that took place in late 2011.

    In terms of new green fluids, there are several companies working on those, one of the products is CleanStim developed by Halliburton; I am not familiar with the technical specifications of those fluids, but there are concerns about their efficacy and their availability; I don't perceive those to be more than PR tool at this point.

    Finally, I do believe Gasfrac is a possible and a likely takeover target; the company technology could be very appealing for larger competitors, the fracking industry is experiencing fast secular growth and Gasfrac offers an attractive venue to tap further into this growth; as a matter of fact TD Waterhouse has Gasfrac as the most likely candidate to be taken over in 2012 in their oil service coverage universe.

    Regards,
    Nawar
    Jan 16 06:54 PM | 1 Like Like |Link to Comment
  • Gasfrac: Superior Production Results [View article]
    Craig, I appreciate your feedback.

    I do agree the company is quite young, they did their first frac in January 2008, so we are talking four years only; however within those few years they have certainly demonstrated commercial viability, while an observer can dive in the technical details; I believe their financial results and commercial contracts demonstrate the technology is superior in a number of basins; the Husky contract which will produce $150m-$200m in revenues this year has the potential to generate $1B in revenues at the high end if renewed for the optional 2 years beyond the first 3, and this excludes any potential expansion of the yearly run rate. I don’t believe an oil company will make such kind of commitment if they could achieve similar results with an alternative technology.

    In my previous article, I linked to a Baker Hughes EPA submitted document that highly praised LPG fracking, in that document Baker Hughes senior researcher affirmed a lot of LPG fracking advantages, his only qualifier was “if the process can be done safely”, which I believe the company has demonstrated and further improved upon after the January 2011 incident.

    I do agree that there are quite few fracking approaches, one reason that there are different approaches is due to the varying geological characteristics among reservoirs; this actually underpin the fact that there should be room for LPG fracking in a number of reservoirs, this was one of the arguments I made in my previous article, where I explained that Gasfrac technology does not need to go mainstream for the company to grow; it may very well end up as a niche product focused on a number of basins and jurisdictions where it can deliver superior results.

    As for the competition, most certainly each technology company is always subject to competition, this is the nature of the beast; if technology investors were to be paralyzed by the risk of another technology entering the market place, no money would be invested in the sector; in the end an investor needs to make her or his judgment on this issue; but I might add this added competition is also an opportunity since it may render Gasfrac as an attractive buyout target for a competitor trying to have an edge in this fracking arms race.

    In the end returns and certainty are correlated, if Gasfrac was an absolute sure thing, it would not be trading in the single digits; some investors may would like to see more contracts and further acceptance before entering the stock, this will certainly reduce their risk, but proportionally increase their entry price.

    Regards,
    Nawar
    Jan 16 03:42 PM | 4 Likes Like |Link to Comment
  • Gasfrac: Superior Production Results [View article]
    Firstly thank you for your kind words; I am glad those posts have been useful and informative.

    In regards to the higher initial cost, I understand your concern, while O&G companies are sensitive to cost, they are also interested in increased production and increased reserves, if you have to pay more for an LPG fracked well, but report a significant increase in production and an increase in the life of your reserves, you will go for the Gasfrac solution regardless of the higher initial cost; only a short sighted management will purposely lower production and diminish reserves in return for a lower fracking cash cost. The Gasfrac solution offer a lower total cost solution; this is the real benchmark that counts.

    Another reason for using Gasfrac is not related to cost, it is related to the technical nature of the reservoir; there are several basins where water fracking is not even an option due to the fact that the reservoir is water sensitive (meaning the injected water could damage the reservoir and hamper production), The Colorado shale is an example of such basins, areas to the west of the Permian Basin in another example; there are also other basins with low pressure or extremely tight where water fracking is not effective such as frederick brook shale in eastern Canada; and finally you have oil and gas in arid areas where there is no access to water for fracking.

    There are many economic, technical and environmental reasons why an operator may choose Gasfrac.

    Regards,
    Nawar
    Jan 16 01:16 PM | 3 Likes Like |Link to Comment
  • Gasfrac: Superior Production Results [View article]
    You are spot on Foolster, Gasfrac calls it effective frac length; based on that metric the cost for a Gasfracked well is $1500 per foot, vs $2500 per foot for a conventional frac.

    Regards,
    Nawar
    Jan 16 01:03 PM | 2 Likes Like |Link to Comment
  • Gasfrac: Superior Production Results [View article]
    Thanks for your comments buffalo; unfortunately I don't follow PBKEF; but another smallcap I like is Equal Energy (EQU), you may read my article on that company here:

    http://seekingalpha.co...

    Regards,
    Nawar
    Jan 16 09:39 AM | Likes Like |Link to Comment
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