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.

The new producing well, called Mary Ridgeway #1, is located on the Galba lease owned by ViaLogy's partner Atascosa Exploration LLC of San Antonio. The Mary Ridgeway#1 well is estimated to hold larger recoverable reserves compared to ViaLogy's previously announced Cindy Bartlett#2 well discovery announced in March 2009. As before, Vialogy predicted the subsurface hydrocarbon reservoir boundaries, the porosity of the oil-bearing Bartosh sands, formation depth, and positioned the well. Prospect estimates were confirmed by the well-logging and independent subsequent core laboratory analysis. The companies will be releasing actual figures over the next few days, including dollar estimates of recoverable reserves. As announced earlier, under its current contract with Atascosa, Vialogy will receive 5% Back-In-After-Payout working interest in the well.

BTW I'm a holder of these but I suppose some maybe concerned by the statement "next few days" this normally suggests within a week but it looks like it is going to be longer, they will need to get a RNS statement out soon otherwise people may follow EK (I seriously hope that he is wrong).

I'm in this one and also hope that for once he is wrong, I'm glad that the CEO or the boss is not at his desk waiting for a telephone call...I want him to be out and about doing things not messing around with office work !.

The stock is rising fast, he will be losing money as he puts big punts on things !.

2.35m gone through @ 2.5p.
2517

wrongly reported trade,imo.

"Tech invest" the tip sheet have bought into this....they would not be happy if this went pear shaped.....you must always take notice of EK though !, but this time I'm not so sure : to me this looks very promising and I'm staying in !.

Who would you think that it is a wrongly reported trade ? I wass surprised at the price of the sale but for a trade of that size is probably right. Is someone in the know ?

Oh well been in it for such a long time why worry !!

Again I hope you're right notlob !

pumben, I am right.
Share price up strongly towards the close is yet another indicator.
Next week will be another excellent week for all VIY holders.
Strong sp appreciation and scorched shorts is on the cards!

Of all the shorts to take out : this would not be one !, I would have thought, anyway we shall see !.

seems like we could be in for some fireworks next week.
rf, I concur, it seems to be a very foolish short indeed.

would soom a certain amount of desperation has set in across the road in the zoo.
smells of shorters panicking, this could well help fuel the rise next week and give vertical take-off.

Agree with you notlob you can smell the fear in the zoo.
Never read so much crap in all my life.

Here's an update for you:

Accuracy of latest oil well predictions independently confirmed - RNS today

good news and shorters are being fried this morning!

I'll shall have to check out EK's next update....he might go long....that's his strong point : the ability to change his outlook on a stock in an instant !.

would make more sense
could just have been a ruse on EK's part to try to pick up some cheap stock, that didn't work either!

VIALOGY PLC ('VIALOGY' OR 'THE COMPANY')

Accuracy of latest oil well predictions independently confirmed




London, May 5, 2009. Vialogy (LSE:VIY) Following the announcement on 23 April 2009 that a further oil discovery had been made on the Galba Field, Texas ('Mary Ridgeway #1'), ViaLogy is pleased to announce that it has now received detailed analysis confirming the predictions made using its QuantumRD technology on the oil find. The successful well was drilled by the leaseholders, Atascosa Exploration LLC of San Antonio.

Using industry standard core analysis practices, Atascosa has received independent confirmation that the well will produce 170,000 barrels of crude oil (i.e. 35% primary recovery based on an overall actual volume of 486,000 barrels). Atascosa plans extractions of 50% of the recoverable reserves in first three years. ViaLogy's QuantumRD predictions of hydrocarbon pay zones at depth of 3050 feet with average porosity of 30%, and the oil reservoir's boundaries all proved correct. With a 10% direct working Interest, ViaLogy expects to receive revenues of approximately $650,000, assuming 35% recovery, over the life of the well (assuming an average per barrel price of $50) to be paid monthly and to begin in Q2 2009.

Atascosa's Senior Geologist, Wilford Stapp commented, 'I am very impressed by ViaLogy's ability to combine geological assessment with subsurface seismic interpretation to locate hydrocarbon high saturation zones in consolidated sands. We have concluded that Mary Ridgeway #1 is a new isolated reservoir in the Bartosh formation with multiple pay zones. ViaLogy's optimized drill location has ensured that this new well will not compete with other producing wells, enhancing our total recovery from the field.' Mr. Stapp has Emeritus standing with both the American Association of Petroleum Geologists and Society of Petroleum Engineers; he founded the Publication of the South Texas Geological Society, and was a Fellow of Geological Society of London. He has been an expert practicing geologist for over 50 years working with majors and independents. Besides Texas, Mr Stapp has worked in Asia, Australia, Dominican Republic, England, France, Morocco, Namibia, and the Persian Gulf.

ViaLogy has also agreed terms with Atascosa for the drilling of a third well on the Galba Field and discussions are under way for the application of QuantumRD at a number of other Atascosa lease sites. In addition, Vialogy expects to be working with other customers on additional oil discovery projects in the coming weeks.

Vialogy CEO, Robert Dean, commented, 'The accuracy of ViaLogy's QuantumRD analysis and predictions on these first successful wells is impressive. The technology is widely applicable, and the Company intends to demonstrate its capabilities with an increasing variety of hydrocarbon geological formations and an expanded customer set.'

like the sound of this!

'In addition, Vialogy expects to be working with other customers on additional oil discovery projects in the coming weeks.'

could be in for a couple of good weeks here!

V. disappointing finish after a postive rns, looks like this will drift until they release the next rns hopefully providing details on a new large company. however, good to see that Barclays have been increasng their stake !!!!!