from w-w-bb:

19.01.2007 - Total Rocketscience

The third and final company making up our Risk / Reward trilogy on shares for 2007 has so many investment negatives that most observers might not even give it more than a cursory glance. Although quoted on the London AIM market, it is based on the other side of the World, has reported revenues and cash flow of diddly squat and, more importantly, operates in an area of expertise so deep in boffinland that you need to be at least a 5 star techie to venture anywhere near it.

What originally persuaded us to give it a second look was the fact that legendary Stockmarket investor, Jim Slater, was pouring money into it via several successive rounds of financing. As we all know, Mr. Slater is a qualified accountant and hugely experienced corporate financier but clearly he is more at home in leafy Surrey than in the technologically rarified atmosphere of Southern California. However, he must have gleaned enough about what the company actually did to get extremely excited about it. In fact, by last Autumn, he had grown to like it so much that, to paraphrase the immortal Victor Kiam, he bought the remaining 51 % of the company that his vehicle, Original Investments, didn't already own.

The company in question was VIALOGY and, ever since it was fully reversed into Original just before Christmas, Slater's loyal band of followers have seen their highly speculative penny punt move on to the calculated risk category and been duly rewarded with a 50% shareprice improvement. We first latched on to this situation last April when we wrote a piece entitled The Cisco Kid ( see news archive ). To recap briefly, the company was set up by some brainboxes who had earlier worked together on supercomputing projects for NASA. Led by Dr. Sandip Gulati, the team appeared to have perfected software to detect and enhance extremely weak signals previously obscured by background noise. This may not seem particularly earthshattering to the layman but, apparently, the applications for this technology are not only revolutionary but almost limitless which suggests that an exponential rise in licensing income could well lie ahead.

Big news clearly travels fast on the Eastern seaboard because global behemoths Cisco and Boeing have already enlisted Vialogy to work on 2 major government inspired projects and these are just the ones that the company have been allowed to talk about publicly. As we reported in April, Cisco has contracted Vialogy to help with its IPICS programme which seeks to make sure that all emergency services and government agencies can communicate with each other quickly via computers and phones. The need to address this obvious requirement was highlighted by 9 / 11 when communications between different departments with different systems proved chaotic.

For its part, Boeing has recently confirmed that Vialogy has delivered a tenfold improvement in the accuracy and efficiency of the types of gyroscopes it uses in spacecraft and missile navigational systems. It is also known that both Cisco and Boeing see a major role for the technology in such areas as border controls and missile defence systems. Elsewhere a much smaller Texan company, Evolution Petroleum, is applying the technology to improving seismic evaluation of oil and gas deposits.

This initial clutch of applications is almost certainly just the tip of a very large iceberg that is going to float into view over the next few years and all that is required is a little patience. At todays price of 5.5p, Vialogy is valued at a mere 22m. To justify this valuation, the company would have to be earning say 2 million pretax. With cash reserves of 3 million and its heavyweight partners funding the projects it is involved in, Vialogy should be able to get through to breakeven without further recourse to shareholders. We would expect this stage to be reached sometime over the next 12 months. Thereafter, profits could / should escalate very dramatically as new applications and licensing income start to snowball.

On a two year view, shareholders could be rewarded extremely handsomely indeed. Vialogy is in so many ways akin to last weeks selection, CORAC. Both are now moving from the development stage to commercialization with the scales tipping away from blue sky risk towards the reality of cash flow. Both have mindblowing upside potential yet both have current shareprice action that makes drying paint look positively orgasmic. Although this presents an opportunity for latecomers, it is a frustrating byproduct of both companies involvement with highly sensitive technology and powerful, publicity shy partners. Moreover, the present lack of any meaningful numbers together with the sheer scale of future potential makes any serious stockbroker research well nigh impossible. All this will resolve itself in due course but, as they say in the Grolsch advert, all good things come to those who wait.

I would make that about 1.2 million purchases and 800,000 sells, so far.

Not 700,000 purchases and 1.3 million sells as quoted.

this is very strong news today, I expect further news releases in the month ahead and good share price appreciation.

This one application of VIY's technology in one market could be worth a small fortune, let alone all the other market areas VIY are active in.

Very strong buy at these levels, imo.

The problem with VIY is it is difficult for the layman to understand their technological breakthrough and its applications. PI's will only be able to judge their significance when the sales figures are announced. However it does appear that the company has a future and it remains to be seen how big that future will be. Worth a punt at this level imho.

strong volume today has hopefully cleared out all/most of the sellers, we will see from here.
These are looking such a good buy right now, imo.
Top up time beckons!

Agree mm's antics today suggest they are trying to control the sp, perhaps more interesting news on the way.

Thinks are starting to take shape . If their products are that good , everyone will be after their technology .

Nice sea of blue this morning .

strong news to come, perhaps?

it's been teasing for a while but everytime it moves up a bit it moves srtraight back down, any ideas as to when it's interims are ?

Year end is 31/3/08 final results due latest 30/9/08.

RNS Number : 9330X
ViaLogy PLC
01 July 2008




ViaLogy partners with Texas group ASTFS to offer aerial survey services for underground oil & gas pipelines


Significantly reduce costs for underground pipeline location and condition assessment




London, 1 July 2008. ViaLogy PLC (LSE:VIY) announces an agreement with Texas-based ASTFS LLC, an oil and gas pipeline field services and survey company, to offer its QSUB electromagnetic imagery fusion platform to provide imaging of underground metallic pipelines using airborne ground-penetrating sensors to determine precise GPS locations.


This information will be used by pipeline companies to enhance their ability to repair and maintain their primary asset. After the successful completion of a proof of concept study, the technology will be refined to provide imaging of corrosion and leaks from an aerial platform. This will provide critical information to the client concerning the health of their system without affecting operations. This has the potential to greatly reduce the cost of repair and maintenance for the pipeline owner.


Under the terms of this agreement, ViaLogy and ASTFS, which is part of the Advanced Spatial Technologies Group of Oklahoma, will collaborate on a pilot survey deploying helicopter-mounted light detection and ranging (LIDAR), ground penetrating synthetic aperture radar (SAR) sensors and advanced GIS analytics. The objective is to fly over and accurately detect approximately 100km of underground pipeline in rugged mountain terrain. ViaLogy's QSUB software will be deployed to process radar imagery and extract pipe position data, which will be controlled by AST's Spatial Asset Management System (AST SAMS). AST SAMS is a simplified table driven data management software tool with complete compatibility to any database management system the customer may be using. This technology provides the capability to easily locate assets with pinpoint accuracy, mark the location with sub-foot precision, record the condition or state of repair, estimate projections for end-of-life and manage all of the critical asset data events in a simple, ruggedized solution that can be operated by a non-technical field worker. The pilot will be supported by a major pipeline company that intends to purchase the service going forward.


Following success of the pilot survey, ASTFS has agreed to deliver minimum revenues of US$26.5 million to ViaLogy for market exclusivity in North America over a period of five years.


According to the U. S. Department of Transportation's Office of Pipeline Safety - Pipeline and Hazardous Materials Safety Administration (PHMSA), (http://primis.phmsa.dot.gov/comm/) there are over two million miles of onshore underground oil and natural gas pipelines in the US alone, operated by over 3000 companies. While metal pipelines are designed and constructed to rigorous standards, over time ground movement, internal/external corrosion, dents and gouges degrade the pipeline so that spills or releases occur. Also, much of the older pipe was originally surveyed with older systems that were incapable of providing accuracies of less than 30 feet and precise locations are difficult to establish, but necessary for repairs and to contain leakage. According to an April 2008 PHMSA report, human error and excavation were responsible for over 40% of underground pipeline damage resulting from inability to determine precise locations.


All aspects of pipeline construction, monitoring and remediation are highly regulated by Federal Energy Regulatory Commission (FERC) and other state/local agencies. In several US states, there are legal requirements for pipeline operators to provide location information accurate to within 18 inches according to an ADM Inc report. The current process of locating pipeline using handheld electronic location instruments and other intrusive techniques is costly and inefficient; it employs often dated maps of where the pipes were originally placed, and manual ground probes to find it. The work is labour-intensive, and much of it has to be carried out in remote locations or in areas where land ownership issues complicate easy access. The cost to precisely locate the entire system is prohibitive and most companies restrict these activities to 'high consequence' areas such as major road crossings and limited high concentration urban areas. The Vialogy-ASTFS service will greatly simplify the process and be made widely available. It will dramatically reduce costs and enable timely repairs. The companies see an attractive addressable commercial market and anticipate pricing of this service at approximately $2500/km.


'The ASTFS team has a strong presence in the South West energy field services market where it has operated for many years.' Said Robert W. Dean, ViaLogy CEO, 'We're very pleased to have established a business partnership with such a capable and experienced oil field and GIS services company. Their domain knowledge and credibility in the pipeline business should result in early market access and adoption for the new service. QSUB is yet another derivative of ViaLogy's Quantum Resonance Interferometry for application in the burgeoning energy market.'


Jim Muller, President of ASTFS, said; 'The problems and high operational costs that beset the task of locating buried pipeline should be reduced enormously by the simplified airborne survey approach enabled by the ViaLogy technology. AST Field Services' operational experience and the power of the Vialogy technology in this application should be a market-winning combination. We will be looking to refine the technology to offer additional value added services to our customers with ViaLogy such as leak detection, unauthorized tapping and repair planning.'

wow, stunning news, these boys are on a roll!
looks like a $10bn market and a killer technology with strong economic drivers.
A nice piece on the Walters site, trial for this will be done in pretty short order, don't think they would enter this unless they were confident of the outcome. Plenty more news to come. That sounds good to me!

and sp effectively unmoved, tho better than poor news for sure

cynic
there is a seller(s) out there, perhaps not surprising in the current climate, but with more good news to come, I believe the sp is due a bing hoist northwards,imo.

would be nice ...... something cheery to go alongside my short of SOLA

Nice 1 mil buy at the end of the day ?

Isn't the 3 week trial testing period up for one of it's technologies ?

its not a testing period
VIY said they would deliver the results to Atascosa within three weeks
Then, assuming VIY have found something of interest in the seismic, Atascosa have to drill hole in the ground and check it out!

this article from the Mike Walters site gives a good overview of the oil initiative

The Old Boys Oil Company - Vialogy (VIY)
18/6/2008 (119264)

The Old Boys Oil Company


Theres a fortune in them there algorithms. And those smart fellas out in California at a company called Vialogy (VIY) have got a pretty good handle on em.

Thats what they believe deep in the heart of Texas at the Old Boys Oil Company, more formally known as Atascosa Exploration of San Antonio. John D. Mullins, chief executive of Atascosa, is pretty excited by the idea that Vialogys Quantum Resonance Interferometry can analyse coarse 2D and 3D seismic signals and spot where the oil is underground, maybe to within a distance of 20 feet or so. If it works, that will make a great deal of money for the good ole boys and the tecchies on the West Coast.

We should know fairly quickly. Mullins says he can get a rig programme rolling in 30 days and drilling should take maybe seven or eight more. If it hits, it hits.

Vialogy can analyse his seismic within three weeks (more likely seven days), and tell him where it thinks he should drill. He has the rigs, and three prospective well sites lined up in Texas (operators tend to take a lease on vast tracts of land carrying the right to drill within two or three years). He plans to offer Vialogy the chance to analyse different structures and different information, 2D on one site, 3D on another, maybe a combination of both on a third.

Whatever happens, he is also likely to drill one well where Vialogy says, and one where his team tells him. He chuckles that Atascosa has a 90 year-old geologist, and hes trying to cut back his working week. But that is one old boy who has become a legend in his own lifetime and knows his way around Texas oil like no-one else, winning massive respect. So Vialogy is not playing with greenhorns here..

The oil is there, Mullins is convinced. He says; Weve looked at the production numbers in a lot of well-known fields an South Texas and a lot of lesser known fields. I have concluded that the major oil companies are liars. You can quote me. The contention that there is nothing left onshore USA is a load of bull. There is still more oil to be recovered than has been produced so far in the US. I think that Vialogys interpretation is going to help us do that.

Atascosa is privately held, so details are hard to come by. Mullins says that with partners they control several millions of barrels of reserves.

More significantly, Atascosa has connections in the industry. If the Vialogy process works, Mullins and his boys have the ability to introduce it to a whole raft of players in the oil game. In a business where they have shrugged off a host of outsiders bringing new ideas, innovations need a credible sponsor to take off. Mullins offers that.

Independents do 90% or more of the drilling in the US, and it can cost $1.5m to $4m to drill a well. Anything which can improve the chances of success has vast potential.

The two companies have formed a joint venture, and that will take a percentage of production in excess of that predicted by earlier models. All being well, they will go on with a business commercialising the project within the United States. Vialogy could take it around the world.

Mullins says; The value to my company and Vialogy will be tremendous if it works. We will charge a small interpretation fee, and if the operator drills hell pay a small royalty. There is potential for several thousands wells a year.

Actual costs to Vialogy are modest. The system has been pretty well developed already, emerging from the days resident boffin Dr Sandeep Gulati spent at the joint propulsion laboratory working on deep space projects for NASA. It ought to work. Mullins says These guys are smart enough. If they say they can do it, they can.

This is the first of what could be a flurry of announcements from Vialogy over the next five or six months, as reported in my Axia piece on May 30. There is much more good news in the wings, some of it involving a large project.

It is not clear whether Vialogys technology will be in the contract Boeing is likely to be awarded any day on the southwest border electronic fence. It might not be right to put too much hope into that, though there is good, big news to come before long.

Figures? Well, the company knows the market wants them, and needs them to drive the share price higher. There will be something a soon as possible, but it is a sensitive subject. It depends mainly on how much bigger partners can sell, and how quickly they start those sales. Vialogy simply takes a small proportion out of the sales by big boys, who hate to see their sales projections revealed.

The shares rallied on the news, but were coming off at the close, finishing at 4.75p to 5.5p in the face of what looks like a sizeable seller.

In the current climate, the shares remain vulnerable because of the lack of defined revenues. Anyone, though, ready to take a blue sky gamble ought to hold tight, and even to buy at around current levels. There are never guarantees in the investment game, but Vialogy increasingly looks like developing into a major revenue earner with massively important intellectual property. Along the way, the share price might continue to struggle for a while. But fans will not want to risk being out as the news rolls out this summer.

I have a holding in Vialogy.

Ends

13.5 million at mid price. Must be buys bearing in mind current news position. 758,700 plus dealing charges, could be an institution coming on board. How come they never pay full price. What happened to market conditions for them. They just mention their price and they get it. Prehaps I shall have to become the institution of oilyrag. LOL.