Yes an engineer but lets call it a TECH Engineer. Compressed air technology is its main business, develops industrial air compressors and Gas seals and whats more it provides them for the OIL and GAS industry.
Very close to commercialisation now with its compressors and seals and todays deal ( see below ) should bring that very close.

Charges upfront payments, continuing royalties and development contracts so revenues are not lumpy.

It as a market cap circa off the top of my head 20 million(hope my calculator is now working) and as circa of 5 million cash on the books, very nice.

Some very big names as customers.

Heres todays announcement...........

Corac Group Plc
26 May 2004


For Immediate Release 26 May 2004


Corac Group plc ('Corac')

Joint Industry Programme for Downhole Gas Compression

Corac, the intellectual property and licensing company specialising in
compressor technology, is pleased to announce the signature today of a Joint
Industry Programme ('JIP') for the development of its unique, patented downhole
gas compression technology.

Following the recent successful completion of a Shell funded feasibility study
which evaluated both the technical and economic viability of the technology,
considerable industry interest has been generated, culminating in the addition
of a further four major international oil and gas operators to the project.

The participants of the JIP comprise ConocoPhillips, ENI, Husky Energy,
Repsol-YPF as well as Shell, all of whom have gas assets worldwide which they
believe could benefit from this game changing technology. As well as covering
the development costs for the next phase, the participants will also make
substantial resource available to ensure the final product specification meets
the requirements of the industry.

Corac's downhole gas compression concept involves the coupling together of a
number of axial compressor modules in a single compression train for
installation in the well bore in close proximity to a gas reservoir. In this
location, a modest uplift in pressure results in a very significant increase in
gas production compared with conventional methods using surface compression,
thereby accelerating gas production and cash flow from a producing asset.
Potential production rate enhancement of up to 40% has been demonstrated through
the application of downhole gas compression during a number of gas field case
studies carried out over recent months.

Placing the compressor downhole could also have the effect of being able to
lower the reservoir abandonment pressure which in turn would materially increase
the ultimate recovery from a gas field, thereby further enhancing the economic
benefit from the installation of this novel application of existing technology.

Phase 1 of the JIP is scheduled for completion by the end of 2004, with further
engineering and development work leading to the manufacture and testing of a
prototype downhole in a producing gas well within the following two years.

Commenting on the JIP, Professor Gerry Musgrave, Chairman, said:

'The support from such eminent oil and gas companies vindicates Corac's
development to date of the downhole gas compression project and gives the Group
another product line to bring to the market using its core technologies. It is
the start of a major business development opportunity which is expected to have
significant international ramifications throughout the upstream natural gas
industry.'ENDS.

Although loss making at the moment it shouldnt be very long before this one turns the corner.

Outlook

The Company has a loyal, talented workforce dedicated to the innovation and
exploitation of the technology. Successful trials have demonstrated the
commercial performance in Corac's industrial air compressor and its seals. The
Board is striving to deliver the right manufacturing and sales licences which
will yield the best returns in the long term.

We are confident that a number of deals, which have been subject to recent
intensive negotiation, will be successfully concluded in the near term.

Short to medium term investment, and anyone interested should DYOR and please remember you are responsible for the timing of your buying and selling actions.

cheers GF.

goldfinger
see you started this thread 3+ years ago, you a long-term holder of CRA then?
I first bought in around 2 years ago + have added at various times since, I was blown away by the potential of DGC
I can't believe you can still pick up CRA at these levels, with DGC live trials just around the corner.

this was posted on another board, nice link!



http://ior.senergyltd.com/issue13/research-development/smes/corac/

***Game Changing Technology***

-just a quick reminder why CRA is the best risk/reward stock on the market(imo!)
-Here is a link to a report on DGC published by the DTI , maximising oil and gas programme.

-This is something the Government is very keen to do, to reduce our dependence on overseas energy supplies.

-Gas prices are again starting to edge up again and the recent rapid detioration of relations with Russia will only put further pressure on the UK to ensure as much independence on gas supplies as possible.

-The article again outlines the substantial advantages that ONLY DGC can provide.

-Don't forget, in the development of DGC, CRA have no competition at all. (even if they did, a 100bn market gives a bit to go for, in any case)

-Interesting also to note in the article that there are developments in hand which would enable CRA's DGC to be applicable to a wider range of gas wells, by increasing the temp. at which the electronics can operate at.

-The current max. market for DGC is estimated at 100,000 gas wells, guess that figure could rise if these developments are succesful!

-but as the recent rhps tip has pointed out,just 0.1% penetration is still 100m at high margins, with recurring revenues chucked in as well!

ps
assuming we make a nice profit, taper relief will come in handy!

Continuing the momentum drive.

Even TB is on this one, the mm's know it too so will wait for a fall before looking to buy in... Further testing and some positive feedback from the field is whats needed now.

Notlob, re your post above, just seen it sorry for the delay...

goldfinger - 15 Jun 2007 10:36 - 90 of 109
Yep. Bought in again to add to my residue stock when a well known and respected PI on finfoex mentioned this one on that site.

no probs, goldfinger
thanks for the reply

CRA going very nicely, looks like they are breaking out >50p

Think Numis have put out a recent update with a circa 1 target-if DGC lives up to its potential, you can add a '0' to that + still be good value!

Have you got a copy NL?.

not yet, GF, but will have soon

Numis have put a price of 2.60 on CRA for 2009, and discounted that back to 96p target for this year


Numis Securities said Corac is getting close to establishing whether its downhole gas compressor (DGC) technology will be a commercial success, adding that it is increasingly possible as Corac comes to the end of the four-year development
programme.
The brokerage has a "buy" rating on the compressor technology company's stock.

now got a copy of the Nuims note, and it ain't too bad
They reckon CRA worth close to a 1 right now, if they discounted at a more reasonable rate they say the now price is around 2.24 or so
If DGC works as it says on the tin, they actually use the words 'no brainer'
ofcourse, the risk warnings are in there as well, to be fair
try to post a bit more detail when I have some time.

Corac heading back up
reading the note, no wonder!
Looks like this is heading for a couple of quid plus, Numis even use the 'no brainer' phrase!

some interesting bits from the Numis report (coined from 'the other side')

Corac is getting closer to realising significant value potential from commercialising its Downhole Gas Compressor (DGC) technology that can accelerate and increase ultimate recovery from depleting gas wells. There are a number of key milestones approaching over the next 6 to 12 months that will give a strong indication of the likely success of Coracs commercialisation strategy. For those investors with an appetite for risk, we suggest that investment now could yield significant returns within a year

Significant DGC opportunity: The financial attractions to industry of accelerated production and ultimate recovery of gas from wells are obvious. For Corac, a small market penetration is very significant. We estimate that a deployment of 500 units, just 0.5% market penetration, equates to revenues of c400m

Numis have a price target now of 96p, which they say clearly assumes DGC is a success but is heavily discounted to reflect an element of the risk. A more normal discount (8%) gives a current value of 224p a share, indicating the potential from DGC.

Numis value the Industrial Air side as 3m. Whilst they say this is conservative, my own view is that is way way to low , as I expect events to prove, plus there is nothing in there for other developments such as refrigeration.

Opportunity

If successful, the scale of the opportunity is very substantial. Corac has worked closely with its JIP partners where from detailed knowledge and data modelling of the fields it has enabled an economic analysis of the value of the DGC units. The companys modelling indicates that wells can yield anything from 20% to 40% improvement in artificial lift of the gas. For example, a field with 30 wells was modelled and it was decided to deploy some 21 DGC units. In the economic model the capital cost of the units, the installation of top side generating capability, work over tubing, as well as running costs were calculated. Additionally the industry decided that the DGC units would be replaced every two years. The deployment of such units resulted in a positive cash flow in the third year because the increase in gas flow yielded an extra return of over $200m per annum.

Economic case is compelling

We agree with the companys view that, for this particular field and the many others that have been analysed, once DGC has been fully proven down the hole, there is an overwhelming case for deployment wether it is recovering stranded gas or just giving the operators a much better return on their investment. For Corac, as well as the capital cost of sales, in this particular example there would be a size from refurbishment of the units every two years.

130m sales opportunity from JIPs in the short term

According to Corac, the JIP partners have identified 170 wells immediately suited to DGC technology. Even excluding engineering fees and replacement/refurbishment potential, which should occur at least once every three years, we estimate that 170 units could amount to some 130m sales and about 80m operating profit. If the DGC extends a well life for say 5-6 years for example, then this estimate could almost double with aftermarket sales.

The report says that the gross margins on the DGC units are 75%-80%, and at an expected 750K-1m per unit, you can see you dont have to sell too many of those to be seriously profitable!

This ones going aginst the trend today.

recent broker note out from Numis...

CORAC GROUP PLC
Current Prior
Price target 96 pence 54 pence

--Numis Securities said Corac is getting close to
establishing whether its downhole gas compressor (DGC) technology
will be a commercial success, adding that it is increasingly
possible as Corac comes to the end of the four-year development
programme.
--The brokerage has a "buy" rating on the compressor
technology company's stock.

PRO REFERENDUM MARCH AND RALLY
LONDON
SATURDAY 27TH OCTOBER

WWW.PRA.UK.COM

Really as got momentum behind it now.

sure has,gf
I think this stock could easily be 2 or 3 in a year or two, provided DGC continues
to develop along the right lines.

Any tech that can extract up to 40% extra gas from suitable wells has to be worth a few hundred mill for starters, CRA is currently valued at around 40m, peanuts!

Looks like a full-blow chart break-out is underway, which should add a few more to the party.

Lets hope so NL.

Are we off on a PDX type run?

think CRA has much, much more potential than PDX, imo and with all respect to PDX, which I think is a damn fine stock with some very interesting tech.

Work out the economic benefit CRA could bring to gas operators, and you will see CRA looks very undervalued, albeit, to be fair, there is still some development work to do on DGC.

CRA also have several other irons in the fire in major markets, eg industrial air and refrigeration, both billion + markets.

nice one!

http://www.worldwidebb.com/news.php


09.08.2007 - The Self Enrichment Society

No-one can forget that memorable final scene in The Italian Job where the coach wobbles precariously over the edge of a ravine weighed down by millions of pounds worth of gold bars. For Michael Caine and the rest of Mr. Bridgers gang, a case of so near and yet so far.

However, this tantalising scenario pales into insignificance compared with that endured daily by senior operations managers at the Worlds largest oil and gas companies. Collectively they are sitting on hundreds of billions worth of gas reserves which they simply cannot access because of a simple lack of pressure.

Next time you pack up your inflatable sunbed at the end of a day at the beach, notice how there is a sudden whoosh of escaping air as soon as you unplug the stopper. Then, once the air pressure inside the bed approaches the same level outside, you are still left with a sizeable volume of air that has to be forced out by a tiresome procedure of pressing and rolling.

Ever since the birth of the natural gas industry, engineers have been grappling with a similar problem of how to extract the trillions of cubic feet of gas left behind once the pressure underground becomes insufficient to force the gas a mile or two up to the surface. The most common approach has been to install compressors at the well head to try and suck up the gas left behind but, even with a decent sized machine, this is about as effective as inhaling on a 50 foot cigarette. If anyone ever manages to crack this problem, it would be almost priceless in terms of the extra volume of gas extracted globally every year.

Well, whisper it very quietly, but a small engineering firm spun out of Brunel University is now on the cusp of this very breakthrough after years of painstaking research and development. Professor Gerry Musgraves CORAC GROUP first arrived on the Stockmarket in 2001 in a blaze of glory that saw the shareprice briefly kiss the 100p level putting a value of over 50 million on an enterprise that had zero revenue and profits.

Since those heady days the shares languished as investors grew bored with the inevitable wait for the protracted R & D programme to run its course. Musgraves small team had already redesigned the conventional air compressor so that it required fewer moving parts and subsequent maintenance but the real breakthrough came when he persuaded several oil and gas giants that it was possible to produce a compressor small enough but strong enough to travel the full length of a 7 inch diameter gas well and suck the invisible gold up through the well. This process would mean fields could be exploited with fewer wells and therefore capital expenditure. Gas recovery could be accelerated meaning faster payback times and, most vitally of all, those billions of pounds worth of stranded reserves left behind by weak pressure could finally be brought to the surface.

Convinced of the undoubted value of such a technology, these major gas producers went away and did their own research into the feasibility of Musgraves idea. One by one, they stepped up to the table and clubbed together with Corac to form a joint investment programme to which they would contribute both cash and gas industry expertise. These partners read like a Whos Who of major European producers, Conoco Phillips UK, Repsol of Spain and Italys ENI. Mindful of the strategic as well as financial desirability of recovering stranded North Sea reserves, the Department of Trade is also grant funding the project on an ongoing basis.

The research, testing and planning that has gone into this programme almost makes the Normandy Invasion look like an impromptu barbecue. The star of the show, the Downhole Gas Compressor itself, is now just over half way through a year long final rehearsal at the Spadeadam test facility in Cumbria. This is probably the closest the DGC can get to operating a mile or two underground for months on end in extreme conditions. Last minute snags are being ironed out prior to actual deployment in a real gas field early next year.

Meanwhile the gas industry partners have been busy identifying suitable sites for this initial deployment and have so far earmarked 170 wells in their existing portfolios which is a tiny fraction of the 100, 000 + potential candidates worldwide. All this is scheduled to come together in the first half of next year when the very first actual field trial gets underway. This will be crunchtime for Musgrave and his shareholder fan club. If, despite success in artificial trials, the first downhole experience proves intolerable for his magical box of tricks, Coracs shareprice ( currently back up to around 50 p ) will probably halve to a level where it can be supported by growing non-gas compressor revenues. If, on the other hand, the deployment encounters no more than teething problems, it will be bonanza time for everyone involved.

Gas companies whose wells could accommodate Coracs DGC could see a 20 40 % uplift in total production worth billions. Corac itself will be subcontracting manufacture of the units but will handle final testing and assembly. The mathematics are simply mindnumbing. Each DGC unit will gross around 1 million to Corac with perhaps 400 k in operating profit. Furthermore, we have now learned that each unit will need replacing every two years so there will be a growing repeat demand in addition to each fresh sale.

As you can see from the News Archive, we have probably devoted more column inches to this one company than to any other. Never in our experience have investors had so much advanced notice of a share capable of rising 20 or 30 fold over a reasonable period of say 5 years. We base this on our ultimate target of DGC sales eventually hitting 1,000 p.a. which looks even more achievable now in the light of the replacement market. Without ANY contribution from Coracs industrial and refrigeration compressors, this would equate to annual sales of 1 billion and net profits of several hundred million.

With the company currently valued at only 38 million, a market capitalisation of 1 billion would imply a 26 fold rise in the shareprice if the company hasnt been taken over in the meantime. The timetable is critical. Anyone buying now at 50 p risks the temporary loss of say 30 p if the initial downhole deployment fails irretrievably. We should know sometime between next Spring and the Autumn. If all proceeds smoothly, the stock will most likely go into virtual ascent.

The best tactic is to secure a worthwhile foothold now leaving the option to average up at even 2 or 3 if and when success is verified. Hopefully, many of you are already in at between 30 p and 40 p as the result of earlier articles.

On paper the product potential is undeniable, but why is it taking so long to obtain firm commitments from the end users? Tests can only go on for so long before either the product is acceptable or not.