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To: ms.smartest.person who wrote (3032)	3/17/2008 12:40:23 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 3198

&#8362 David Pescod's Late Edition February 29, 2008 WAVEFRONT ENERGY (V-WEE) $2.27 -0.13 GREENTREE GAS & OIL (V-GGO) $0.12 n/c For those who go to the many Cambridge House conferences and other conferences around North America, a frequent speaker and an affable chap you could meet at his own booth is Jim Letourneau, who publishes the Big Picture Speculator. For a long, long time he has been writing about Wavefront Energy and its potential new technology for recovering oil and gas in depleted fields, and he has also been mentioning other potential uses for their process. After reading his letter again and again over this last 18 months with this stock doing sweet-tweet, sooner or later you just get bored and ignore it. Now all of a sudden the market is paying big time attention to this story so we thought why not go to Jim and ask him to explain in baby talk what the heck this story which is suddenly becoming so significant, is all about. Below are his own words and explanation for their new technology: “Whenever you see a prime piece of real estate fenced off and vacant more often than not it was the former site of a retail gasoline station. The underground storage tanks that contained the gasoline had a nasty habit of leaking into the underground aquifers where we get our drinking water from. Describing this can turn into sea of jargon very quickly but the key terms are LUST (leaking underground storage tanks), BTEX (benzene, toluene, ethylbenzene, and xylenes) and MTBE (methyl tertiary butyl ether). BTEX and often MTBE contain carcinogens that we don't want to be drinking. The "safe" concentration levels for BTEX and MTBE are measured in the low parts per billion (ppb) range. So a small spill of gasoline can contaminate vast quantities of drinking water. MTBE is especially nasty. In even trace amounts it makes water smell and taste like turpentine. It is highly soluble in groundwater and a MTBE contaminant plume will it will travel up to 10 times further than the BTEX compounds. Why do we use this nasty chemical at all? MTBE is used in gasoline throughout the United States to reduce carbon monoxide and ozone levels caused by auto emissions. MTBE replaces the use of lead as an octane enhancer since 1979. MTBE contamination has been detected in all 50 states, and a recent study indicates that it could cost between $12 and $63 billion to clean up. This is a big market, in Long Island alone there were 359 spills of MTBE being investigated and over 1200 gasoline spill sites or leaking tanks. Some sites are harder to clean up than others... Prior to Primawave, the site had been subjected to four previous attempts of limited success to inject the remedial fluid intended to neutralize MTBE impacting groundwater quality. In the four previous injection attempts, delivery of the remedial fluid met with difficulty where the fluid could not be contained in the subsurface. In the recently completed injection, Primawave outperformed conventional injection approaches, permitting the entire fluid volume to be injected, while at the same time containing it to the subsurface. It sounds like the contaminated sediment had a low permeability to the remedial fluid which made it impossible to pump it into the ground... until they used Primawave. Back in April Wavfront used its Primawave Process at Vandenberg Air Force Base in California. The objective of the project is to use Primawave, specifically the Hornet tool, to achieve pin-point placement, and more uniform distribution of a remedial fluid into a tight sand formation exhibiting extremely low flow characteristics. Previous attempts to pin-point inject the remedial fluid using other injection approaches met with limited or no success. Based on previous positive results of Primawave where fluids have been injected with pin-point accuracy, up to five times faster and with ten times the distribution distance compared to traditional injection approaches, the client has systematically identified the process as the only alternative to successfully introduce the remedial fluids into the subsurface to meet its targeted goals. Wavefront President and CEO Brett Davidson commented, "The Vandenberg site is one of, if not the most difficult, geological settings that Primawave has been utilized on. Although we hold great confidence in the Hornet tool, the uncertainty of the overall flow characteristics will present a unique challenge to which other technologies have already met with disappointment. If we can achieve a measure of success where others have failed or were at best marginal, Primawave will have clearly distinguished itself from all other injection approaches, which should result in further market penetration and licensing revenue." At some point Wavefront may decide to spin out their environmentally focussed Primawave business into a separate company. That would let the plethora of newly minted "Cleantech" hedge funds to buy in without having to explain away Wavefront's involvement in the oil and gas business. The environmental market sees $US 4.5 billion/year spent on the injection of chemicals in the ground to treat contaminants. The science indicates that Primawave works better than anything else on the more difficult (and more expensive) projects. If Primawave can get a 1% share of that market that makes for $45 million annual revenue in a high margin technology licensing scenario. On the oil and gas side Wavefront laid out a hypothetical opportunity at their recent AGM: • An oilfield with 3000 injection sites at a 40% penetration rate = 1200 Powerwave systems • Revenue potential of $3.6 million/month, or $43.2 million/ annum • Gross profit potential of $3.2 million/month, or $38.9 million/annum Payback on tool capitalization within 2 to 6 months There are 2 paths to reaching ~$40 million in revenue. It won't happen overnight and there will be some big price swings along the way but I still see it as a multi-year hold. I was buying shares at 88 cents in February. Also watch for news coming from the Rodney South project in Ontario. Greentree Gas and Oil (GGO.V) is in a joint venture with Wavefront where they have 6 Powerwave injectors straddling 2 horizontal producers. There were lots of delays getting the project up and running but they turned it on in early January. Good news from this project could create considerable interest in Greentree.” Thanks Jim! If you would like to see Jim Letourneau’s work, just go to www.bigpicturespeculatorblog.com. To receive the Late Edition and be on our daily circulation simply e-mail Debbie at Debbie_lewis@canaccord.com and give your address, phone number and e-mail and we’ll have you on the list tonight.