Today's Pick is WSCE

Today's alert company is Wescorp Energy, Inc. (WSCE). The company has patented "next-generation" technology for the oil and gas industry. No, they are not a driller, producer or a refiner, but their future is tied into the industry.

There is a huge problem in the oil patch and that is called "produced water". Currently, oil companies have to spend a great deal of money (as much as $12.00 per barrel) to remediate/get rid of produced water.

Just what is produced water that we keep talking about? It is a little known secret (we admit to not knowing this even after all of the oil and gas stocks that we have covered in the past).

Produced water is what is left after the oil or gas is pumped out of the ground. Typically, oil and gas producers pump a highly acidic saltwater mixture into the ground to increase oil flow and retrieve the mixture with the gas/oil produced. The "produced water" is usually heavily contaminated....it either contains significant amounts of oil making it undrinkable or it is so salty (5x saltier than seawater) that it would kill all living things if added untreated to a body of water.

The enormity of the problem (and the opportunity for WSCE) is immense:

Did you know, for every barrel of oil produced statistics indicate that there are as many as THREE barrels of wastewater produced?

The oil industry calls it " produced water" and it is a HUGE problem.

Here are some additional facts about this "problem":
•The produced water industry, in volume alone is 3 times the size of the oil industry
• The world manages and/or disposes of more than 250 million barrels of produced water each and every day

But, it is also a HUGE opportunity for WSCE..... It is estimated that the market for the cleaning and re-use of produced water is in excess of $50 Billion per year

Wescorp’s offers a suite of “Produced water” Solutions for the oil and gas industry. They have a number of products and services available to companies in the oil patch, but the two most promising (and lucrative) for the company are the following:



Environmental remediation Oil/water separation - WSCE has patented a technology that is the "next-generation" remediation equipment. Its H20 Maxx technology focuses on helping oil and gas producers solve their "produced water" issues. The H20 Maxx process incorporates patented aeration technology employing microscopic bubbles several orders of magnitude smaller than conventional technology, resulting in providing clients with cleaner produced water by lowering the amounts of (parts per million) hydrocarbon, providing the option of reinjection, or disposal or off-shore discharge. As well, H2O Maxx provides additional oil recovery, and reduces processing operational expenses
Environmental remediation Solids - WSCE's patented Hydrocarbon Extraction Technology (HCXT) technology can clean anything from drilling cuttings to fine sands or clays from production.

The company is currently producing revenue and has units working in the field in both Canada and the United States. Earlier this year, WSCE signed an agreement with Cancen Oil Canada (A leading Canadian produced water remediation firm) for two H20Maxx units to be installed in existing Cancen processing units (and up to 12 possible).

Cancen is joint venturing these first installations with WSCE and putting up all upfront costs to manufacture and install ( over $1,000,000) both the H2O Maxx and HCXT units in their Alberta, Canada treatment plant. In addition, Cancen has entered into a joint profits agreement (50/50) whereby Cancen will share with WSCE the incremental profits created by the more efficient WSCE machines processing the produced water flow.

Cancen estimates that the JV will return $4.6 million of revenue to WSCE in 2010 and $12.1 million in 2011

The news just keeps getting better!
Cancen recently acquired an additional remediation facility in British Columbia, Canada. The facility based in Fort Nelson is in operation and will require one or two H20maxx units and one HCXT unit for water and oil solids remediation from Wescorp. To read full press release: Click Here

Cancen is the proving ground....WSCE believes the world is its oyster

According to the company, WSCE is currently working with other remediation companies, major oil companies, junior oil companies and oil service firms to integrate WSCE's technology into their operations. All international patents have been filed for the technology and Cancen Oil is allowing WSCE complete access to all of their installed units for the purposes of documenting the benefits of the H2OMAXX and HCXT technologies to other potential customers.

To the chart!
The chart shows that the stock recently delivered a strong multi-day run and is continuing to advance
It appears that the stock is taking a breather today, but the selling volume is miniscule compared to recent buying volume
Upside volume continues to dominate....the volume on up days is much higher than down days suggesting that the stock is under accumulation
The MACD is strongly bullish
Positive stochastics trend, but the stock is not overbought



This is one of those "below the radar" stocks that is quickly gaining a following. The market opportunity for WSCE appears to be massive and they claim to have the next generation technology. The Cancen agreement gives strong credence to their claim.

This is definitely a good stock to radar. Do your due diligence. Here is a link to the company's website that has a lot of good information on it: WSCE Site