Investor Awareness Campaigns: A Look at the Other Side

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So you’ve signed up for a newsletter which promises to give you great stocks picks. Trust their stock picks and you wont miss out on the latest stock market darling. You dont want to miss out on another company who’s shares have moved up over 100%. Follow their advice and you will never have to do your own due diligence again!
investor relations, firm, stock profiles, investor awareness
So you’ve signed up for a newsletter which promises to give you great stocks picks. Trust their stock picks and you wont miss out on the latest stock market darling. You dont want to miss out on another company who’s shares have moved up over 100%. Follow their advice and you will never have to do your own due diligence again!

If only it were that simple!

Stock promotion has been around for decades and when done for the right reasons, can provide potential investors with an opportunity to get in on the ground floor of an up and coming company. Unfortunately, like all good things, there are just enough bad seeds out there to give the whole investor awareness industry a bad name. Far too many investors have been caught in a game of pump and dump. Perhaps a look from the investor awareness side of things will help you avoid being caught.

Why do companies hire investor awareness firms?
Many small businesses are great at what they do. Many have found their own niche and continue to build their company. The problem is, they have difficulties getting the word out about their success story. As such, with no new investors, the share price remain stagnant, and long time insiders are unable to either raise money to finance growth, or to cash out some of their hard earned equity.

An investor awareness firm can help publicly traded companies get the story out to newsletter subscribers. With the facts in hand, these subscribers may decide to turn into investors. The more investors out there, the more opportunity for everyone to make money.

What should you, the subscriber, be aware of?

a) Investor awareness firms are paid a fee. It costs money to generate campaigns, press releases, newspaper articles etc, and the fee helps to compensate for these expenses, as well as pay for the firms time in creating the campaign. These firms are either paid out in cash, or if the investor awareness firm feels strongly about the future of the company, they may become shareholders. If the share price moves up, their compensation moves up also. Quite the incentive to do a great job for the company.

Its recommended that if the newsletter you subscribe to receives shares for their compensation, find out if these are restricted shares, or free trading shares. If they are free trading shares, you may end up buying their shares as the firm sells to cover expenses. Not all firms sell immediately, so its best to make sure. If the shares are restricted, its a safe bet that you and the firm are in it together for at least the life of the campaign or until the shares become unrestricted.

Most campaigns last 1-3 months, but many firms in fact provide coverage past that point.

b) Watch for insider selling. While there is nothing wrong with an insider monetizing their investment, if you see a substantial number of shares being sold at the same time as the campaign is going on, you may find yourself buying shares from the insiders and be left holding them for awhile.

Remember, if the company outlook is so bright, insiders will know better than you, and will hold knowing they will eventually get a much, much higher price.

c) Pump and Dump – its not just insiders you have to worry about. Its in the best interest of a company who has been compensated with shares in the company to see the share price move higher. Watch for an overly bullish spin on stocks that are being promoted by those who have received shares in the company. Find out if the firm has to hold the shares for a period of time, or are they able to sell the shares anytime. If there is a restriction placed on the sale of shares, you stand a better chance of making money on an even playing field.

Most credible newsletters will provide their subscribers with the facts and let the information speak for itself. You dont need to spin a good story: it spins itself!

d) Do your own due diligence – is this company making money? Do they have a product that will be in demand in the future? Is the company creating new products? Investing in penny stocks is no different than investing in large caps; only the risk is different. Ask the questions and only invest when you feel 100% behind the company.

Don’t automatically assume that just because an investor awareness firm accepts shares for compensation means that they are part of a pump and dump scenario. Here are a couple of things to keep in mind from the perspective of the IA firm as to why they might accept shares over cash.

1. Chance for a higher payoff. If the campaign is successful, they stand to make more money. Many of the owners of these firms are also investors. If the future looks good for the company, why wouldnt they want a part of that future?

2. It may have been the only way to make the deal. The investor awareness firm will do its own due diligence before deciding that the deal is worth it. Its their money on the line. For many publicly traded companies, they may not have enough funds available to pay $50 000 or more for a high profile campaign. They may however have enough shares on hand. Once the share price is high enough, they can go after financing, providing the company with cash to finance further growth.

Can you make money when a stock is being promoted? Of course, and many investors make a lot of money thanks to the attraction of new investors. The key is to find the companies who are geniunely attempting to increase shareholder value versus trying to line their own pockets at the expense of shareholders. Only your due diligence can help you do that. Penny stocks can provide investors with a high return, however, it takes more due diligence than luck to jump onboard the right one.

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Go Stock Trade . com Primer: What is the stock market all about?

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Thousands of people who have money in any type of account for their retirement can consider ourselves participating in the Stock market. But have you pondered about the functionality of how this interesting market works? Imagine being at a regular auction, where instead of nice bits such as cars and antiques are being bidded away, think of bits of public companies being auctioned away.
stock market, ETF, 401K, learn how to trade stock, gostocktrade, gostocktrade.com, go stock trade, stock trading blogs, thomas howell, equities trade
Thousands of people who have money in any type of account for their retirement can consider ourselves participating in the Stock market. But have you pondered about the functionality of how this interesting market works? Imagine being at a regular auction, where instead of nice bits such as cars and antiques are being bidded away, think of bits of public companies being auctioned away.

To make a less confusing analogy, think about the role of an auctioneer. The auctioneer’s role is to get the highest and best price for each product. Well, the stock exchanges around the globe kinda operate in the same fashion. The auctioneer role, is called a Market Maker. In a stock sale, there is no stable, set price for stocks, but instead, setting the price is the role of the Market Maker.

The price will fluctuate greatly, because the ying and yang of the market, the buyers and sellers, will bid on either the stock going lower, or higher. Usually when you see a stock price go up, it means that the buy price of a stock has increased. This is vice versa when a stock declines in value.

Now I am sure you have seen visuals on the major news networks of how a stock floor looks. You know, the floor where tons of stark raving mad folks, scream numbers and look at monitors and make trades all day. The trading day starts at 9:30 in the morning Eastern Time, and stops at 4:00 in the afternoon Easter Time. Depending on business news, market forecasts, world events, and a few other things thrown in between, can dictate how much volume a market can have in a day.

The last couple of paragraphs have mentioned all of the particulars of two major markets, the New York Stock Exchange(NYSE) and the lesser known American Stock Exchange. But there is a third one too! It is called NASDAQ.
Now what makes NASDAQ quite unique from the other two, is that this market is controlled by computers. Despite the technological advances of this stock market, NASDAQ still has the conventional bidding water of NYSE and American Stock Exchange. The buyers and sellers have their own areas to buy and sell stock, and bid through a quote system called Level II.

The great thing with stock trading, is that in order to be successful with trading stocks, you do not have to be in the pit, bidding like a madman on the hunt for their lives. Not at all! You can now use the very computer in your house, or go to a trading office if you live in a big city and trade stocks. Many different internet based brokerages are out there, and have plenty of materials to get you started on your way to becoming a great stocktrader!

PROFIT ON!

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On Volatility and Risk

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Volatility is considered the most accurate measure of risk and, by extension, of return, its flip side. The higher the volatility, the higher the risk – and the reward.
Volatility is considered the most accurate measure of risk and, by extension, of return, its flip side. The higher the volatility, the higher the risk – and the reward. That volatility increases in the transition from bull to bear markets seems to support this pet theory. But how to account for surging volatility in plummeting bourses? At the depths of the bear phase, volatility and risk increase while returns evaporate – even taking short-selling into account.

“The Economist” has recently proposed yet another dimension of risk:

“The Chicago Board Options Exchange’s VIX index, a measure of traders’ expectations of share price gyrations, in July reached levels not seen since the 1987 crash, and shot up again (two weeks ago)… Over the past five years, volatility spikes have become ever more frequent, from the Asian crisis in 1997 right up to the World Trade Centre attacks. Moreover, it is not just price gyrations that have increased, but the volatility of volatility itself. The markets, it seems, now have an added dimension of risk.”

Call-writing has soared as punters, fund managers, and institutional investors try to eke an extra return out of the wild ride and to protect their dwindling equity portfolios. Naked strategies – selling options contracts or buying them in the absence of an investment portfolio of underlying assets – translate into the trading of volatility itself and, hence, of risk. Short-selling and spread-betting funds join single stock futures in profiting from the downside.

Market – also known as beta or systematic – risk and volatility reflect underlying problems with the economy as a whole and with corporate governance: lack of transparency, bad loans, default rates, uncertainty, illiquidity, external shocks, and other negative externalities. The behavior of a specific security reveals additional, idiosyncratic, risks, known as alpha.

Quantifying volatility has yielded an equal number of Nobel prizes and controversies. The vacillation of security prices is often measured by a coefficient of variation within the Black-Scholes formula published in 1973. Volatility is implicitly defined as the standard deviation of the yield of an asset. The value of an option increases with volatility. The higher the volatility the greater the option’s chance during its life to be “in the money” – convertible to the underlying asset at a handsome profit.

Without delving too deeply into the model, this mathematical expression works well during trends and fails miserably when the markets change sign. There is disagreement among scholars and traders whether one should better use historical data or current market prices – which include expectations – to estimate volatility and to price options correctly.

From “The Econometrics of Financial Markets” by John Campbell, Andrew Lo, and Craig MacKinlay, Princeton University Press, 1997:

“Consider the argument that implied volatilities are better forecasts of future volatility because changing market conditions cause volatilities (to) vary through time stochastically, and historical volatilities cannot adjust to changing market conditions as rapidly. The folly of this argument lies in the fact that stochastic volatility contradicts the assumption required by the B-S model – if volatilities do change stochastically through time, the Black-Scholes formula is no longer the correct pricing formula and an implied volatility derived from the Black-Scholes formula provides no new information.”

Black-Scholes is thought deficient on other issues as well. The implied volatilities of different options on the same stock tend to vary, defying the formula’s postulate that a single stock can be associated with only one value of implied volatility. The model assumes a certain – geometric Brownian – distribution of stock prices that has been shown to not apply to US markets, among others.

Studies have exposed serious departures from the price process fundamental to Black-Scholes: skewness, excess kurtosis (i.e., concentration of prices around the mean), serial correlation, and time varying volatilities. Black-Scholes tackles stochastic volatility poorly. The formula also unrealistically assumes that the market dickers continuously, ignoring transaction costs and institutional constraints. No wonder that traders use Black-Scholes as a heuristic rather than a price-setting formula.

Volatility also decreases in administered markets and over different spans of time. As opposed to the received wisdom of the random walk model, most investment vehicles sport different volatilities over different time horizons. Volatility is especially high when both supply and demand are inelastic and liable to large, random shocks. This is why the prices of industrial goods are less volatile than the prices of shares, or commodities.

But why are stocks and exchange rates volatile to start with? Why don’t they follow a smooth evolutionary path in line, say, with inflation, or interest rates, or productivity, or net earnings?

To start with, because economic fundamentals fluctuate – sometimes as wildly as shares. The Fed has cut interest rates 11 times in the past 12 months down to 1.75 percent – the lowest level in 40 years. Inflation gyrated from double digits to a single digit in the space of two decades. This uncertainty is, inevitably, incorporated in the price signal.

Moreover, because of time lags in the dissemination of data and its assimilation in the prevailing operational model of the economy – prices tend to overshoot both ways. The economist Rudiger Dornbusch, who died last month, studied in his seminal paper, “Expectations and Exchange Rate Dynamics”, published in 1975, the apparently irrational ebb and flow of floating currencies.

His conclusion was that markets overshoot in response to surprising changes in economic variables. A sudden increase in the money supply, for instance, axes interest rates and causes the currency to depreciate. The rational outcome should have been a panic sale of obligations denominated in the collapsing currency. But the devaluation is so excessive that people reasonably expect a rebound – i.e., an appreciation of the currency – and purchase bonds rather than dispose of them.

Yet, even Dornbusch ignored the fact that some price twirls have nothing to do with economic policies or realities, or with the emergence of new information – and a lot to do with mass psychology. How else can we account for the crash of October 1987? This goes to the heart of the undecided debate between technical and fundamental analysts.

As Robert Shiller has demonstrated in his tomes “Market Volatility” and “Irrational Exuberance”, the volatility of stock prices exceeds the predictions yielded by any efficient market hypothesis, or by discounted streams of future dividends, or earnings. Yet, this finding is hotly disputed.

Some scholarly studies of researchers such as Stephen LeRoy and Richard Porter offer support – other, no less weighty, scholarship by the likes of Eugene Fama, Kenneth French, James Poterba, Allan Kleidon, and William Schwert negate it – mainly by attacking Shiller’s underlying assumptions and simplifications. Everyone – opponents and proponents alike – admit that stock returns do change with time, though for different reasons.

Volatility is a form of market inefficiency. It is a reaction to incomplete information (i.e., uncertainty). Excessive volatility is irrational. The confluence of mass greed, mass fears, and mass disagreement as to the preferred mode of reaction to public and private information – yields price fluctuations.

Changes in volatility – as manifested in options and futures premiums – are good predictors of shifts in sentiment and the inception of new trends. Some traders are contrarians. When the VIX or the NASDAQ Volatility indices are high – signifying an oversold market – they buy and when the indices are low, they sell.

Chaikin’s Volatility Indicator, a popular timing tool, seems to couple market tops with increased indecisiveness and nervousness, i.e., with enhanced volatility. Market bottoms – boring, cyclical, affairs – usually suppress volatility. Interestingly, Chaikin himself disputes this interpretation. He believes that volatility increases near the bottom, reflecting panic selling – and decreases near the top, when investors are in full accord as to market direction.

But most market players follow the trend. They sell when the VIX is high and, thus, portends a declining market. A bullish consensus is indicated by low volatility. Thus, low VIX readings signal the time to buy. Whether this is more than superstition or a mere gut reaction remains to be seen.

It is the work of theoreticians of finance. Alas, they are consumed by mutual rubbishing and dogmatic thinking. The few that wander out of the ivory tower and actually bother to ask economic players what they think and do – and why – are much derided. It is a dismal scene, devoid of volatile creativity.

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Make More Money Trading the Stock Market

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Technical stock traders use technical analysis and stock charts when trading the market. Stock Predictor software goes even further, with hundreds of predefined trading strategies included with it.
stock chart, technical analysis, technical indicators, stock charting
If you are a stock trader, how often do you base your buy and sell decision on technical analysis? If you use technical indicators in your trades, Ashkon Stock Predictor can help you make closer predictions of the stock market. Thanks to the dozens of simple pre-defined trading strategies and literally hundreds of combined ones, there will be no lack of strategy for any stock and any market situation. Choose the right trading strategy and increase your trading profits with Stock Predictor! Download Free Trial (16 MB)

Traditionally, analytical packages for the stock market cost thousands of dollars, and require their operators a high degree of competency in mathematical statistics. Ashkon Software innovative product provided, for the first time, an intuitive and simple to use graphical user interface to the complex process of trading, analyzing data and making predictions. Stock Predictor allows you to make weighted decisions on whether to buy, sell, hold, or avoid a particular stock or stock index by plotting stock charts and technical indicators. You can glance at the charts and make a quick trade decision, or scrutinize them with any of the built-in trading strategies.

Are you sure you are selling your stocks at the right time? Limiting your losses and protecting your gains is a rule of thumb for every investor. Making a trade decision is risky and time-consuming. You can reduce your risks and save time by using proper analytical tools. Stock Predictor saves your time by providing comprehensive analysis of technical indicators for all of your stocks.

Do you have a trading strategy? If you do, how do you know that the strategy of your choice is the most effective one for a given stock and under the circumstances? Stock Predictor helps you choose the right trading strategy for a given stock or group of stocks, supporting multiple pre-defined trading strategies. Running the strategies against a single stock, stock index or a group of stocks makes it easy to calculate and compare cumulative and summarized returns on investment. Choosing the best trading strategy for a particular stock or group of stocks can increase your bottom line dramatically.

Having access to prior performance of a given stock certainly helps developing the right trading strategy. Stock Predictor provides access to historical data at no extra fee with built-in downloader. You can import data into Stock Predictor from a different source, or export data to process it in an analytical application of your choice.

Despite having all the features of advanced analytical packages, Stock Predictor does not cost an arm and a leg. At only $295, Stock Predictor is extremely affordable for any stock trader.

Stock Predictor is available for immediate download. Get your free evaluation copy at http://www.ashkon.com/sp.html and bring your trades to the new level of competency!

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Blue chip stocks – not a poker game

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Investing in conservative blue chip stocks may not have the allure of a hot high-tech investment, but it can be highly rewarding nonetheless, as good quality stocks have outperformed other investment classes over the long term.
blue chips, stocks
Investing in conservative blue chip stocks may not have the allure of a hot high-tech investment, but it can be highly rewarding nonetheless, as good quality stocks have outperformed other investment classes over the long term.

Historically, investing in stocks has generated a return, over time, of between 11 and 15 percent annually depending how aggressive you are. Stocks outperform other investments since they incur more risk. Stock investors are at the bottom of the corporate “food chain.” First, companies have to pay their employees and suppliers. Then they pay their bondholders. After this come the preferred shareholders. Companies have an obligation to pay all these stakeholders first, and if there is money leftover it is paid to the stockholders through dividends or retained earnings. Sometimes there is a lot of money left over for stockholders, and in other cases there isn’t. Thus, investing in stocks is risky because investors never know exactly what they are going to receive for their investment.

What are the attractions of blue chip stocks? 1. Great long-term rates of return.

2. Unlike mutual funds, another relatively safe, long term investment category, there are no ongoing fees.

3. You become a owner of a company.

So much for the benefits – what about the risks? 1. Some investors can’t tolerate both the risk associated with investing in the stock market and the risk associated with investing in one company. Not all blue chips are created equal.

2. If you don’t have the time and skill to identify a good quality company at a fair price don’t invest directly. Rather, you should consider a good mutual fund.

Selecting a blue chip company is only part of the battle – determining the appropriate price is the other. Theoretically, the value of a stock is the present value of all future cash flows discounted at the appropriate discount rate. However, like most theoretical answers, this doesn’t fully explain reality. In reality supply and demand for a stock sets the stock’s daily price, and demand for a stock will increase or decrease depending of the outlook for a company. Thus, stock prices are driven by investor expectations for a company, the more favorable the expectations the better the stock price. In short, the stock market is a voting machine and much of the time it is voting based on investors’ fear or greed, not on their rational assessments of value. Stock prices can swing widely in the short-term but they eventually converge to their intrinsic value over the long-term.

Investors should look at good companies with great expectations that are not yet imbedded in the price of a stock.

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Canadian Coalbed Methane Stocks: 7 Things to Know Before Investing

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One of Canada’s leading petrogeologists, Dr. David Marchioni, cautions investors on what they should be looking for, before investing in the red-hot Canadian Coalbed Methane (CBM) Stocks. There are 7 Key Ingredients that make up a successful CBM play. He warns that some Canadian CBM plays are pricey and mature, although many investors are still climbing onboard the bandwagon. Dr. Marchioni also names his favorite CBM stocks.
coal, china, coal bed methane, natural gas, stocks, investing, canada, exploration, mining
More investors are now inquiring about Coalbed Methane exploration companies. Just as uranium miners were flying well below the radar screen in early 2004, coalbed methane exploration may very well be the next very hot sector later this year and next. Historically, coalbed methane gas endangered coal miners, resulting in alarming fatalities early in the previous century. This is the fate suffered today by many Chinese coal miners in the smaller, private coal mines. Typically, the methane gas trapped in coal seams was flared out, before underground mining began, in order to prevent those explosions. Rising natural gas prices have long since ended that practice.

Today, coalbed methane companies are turning a centuries-long nuisance and byproduct into a valuable resource. About 9 percent of total US natural gas production comes from the natural gas found in coal seams. Because natural gas prices have soared, along with the bull markets found in uranium, oil, and precious and base metals, coalbed methane has come into play. It is after all a natural gas. But because it is outside the realm of the petroleum industry, coalbed methane, or CBM as many industry insiders call it, is called the unconventional gas. It may be unconventional today, but as the industry continue to grow by leaps and bounds, on a global scale, CBM may soon achieve some respect. Please remember that a few years ago, there was very little cheerleading about nuclear energy. Today, positive news items are running far better than ten to one in favor of that power source.

CBM is the natural gas contained in coal. It consists primarily of methane, the gas we use for home heating, gas-fired electrical generation, and industrial fuel. The energy source within natural gas is methane (chemically, it is CH4), whether it comes from the oil industry or from coal beds.

CBM has several strong points in its favor. The gases produced from CBM fields are often nearly 90 percent methane. Which type of gas has more impurities? No, it isn’t the natural, or conventional, gas you thought it might be. Frequently, CBM gas has fewer impurities than the “natural gas?produced from conventional wells. CBM exploration is done at a more shallow level, between 250 and 1000 meters, than conventional gas wells, which sometimes are drilled below 5,000 meters. CBM wells can last a long time ?some could produce for 40 years or longer.

Natural gas is created by the compression of underground organic matter combined with the earth high temperatures thousands of meters below surface. Conventional gas fills the spaces between the porous reservoir rocks. The coalification process is similar but the result is different: both the coalbed and the methane gas are trapped in the coal seams. Instead of filling the tiny spaces between the rocks, the coal gas is within the coal seams.

One of the past problems associated with CBM exploration was the reliance upon expensive horizontal drilling techniques to extract the methane gas from the coal seams. Advanced fracturing techniques and breakthrough horizontal drilling techniques have increased CBM success ratios. As a result, a growing number of exploration companies are pursuing the early bull market in CBM. Market capitalizations for many of these companies mirror similar “early plays?we mentioned during our mid 2004 uranium coverage (June through October, 2004). Industry experts told us there would be a uranium bull market. Now, we are hearing the same forecasts about CBM.

SEVEN TIPS BY DR. DAVID MARCHIONI

We asked Dr. David Marchioni to provide our subscribers with his 7 Tips to help investors better understand what to look for, before investing in a CBM play. Dr. Marchioni helped co-author the CBM textbook, An Assessment of Coalbed Methane Exploration Projects in Canada, published by the Geological Survey of Canada. He is also president of Petro-Logic Services in Calgary, whose clients have included the Canadian divisions of Apache, BP, BHP, Burlington, Devon, El Paso Energy, and Phillips Petroleum, among others. He is also a director of Pacific Asia China Energy and is overseeing the company CBM exploration program in China.

Our series of telephone and email interviews began while Dr. Marchioni sat on a drill rig in Alberta foothills, the Manville region, until he finished outlining his top 7 tips, or advices, on how to think like a CBM professional.

1) COAL SEAM THICKNESS

Is there a reasonable thickness of coal? You should find out how thick the coal seams are. With thickness, you get the regional extent of the resource. For example, there must be a minimum thickness into which one can drill a horizontal well.

2) GAS CONTENT

Typically, gas content is expressed as cubic feet of gas per ton of coal. Find how thick it is and how far it is spread. Then, you have a measure of unit gas content. Between coal seam thickness and gas content, you can determine the size of the resource. You have to look at both thickness and gas content. It of no use to have high gas content if you don’t have very much coal. The industry looks at resource per unit area. In other words, how much gas is in place per acre, hectare, or square mile? In the early stage of the CBM exploration, this really all you have to work with in evaluating its potential.

3) MATURITY LEVEL OF THE COAL

This is the measure of the stage the coal has reached between the mineral inception as peat. Peat matures to become lignite. Later, it develops into bituminous coal, then semi-anthracite and finally anthracite.

There is a progressive maturation of coal as a geological time continuum and the earth temperature, depending upon depth. By measuring certain parameters, you can determine where it is in the chemical process. For instance, the chemistry of lignite is different from that of anthracite. This phrasing is called “coal rank?in coal industry terminology.

4) PERMEABILITY

When you are beginning to think about CBM production, this and the next item must be evaluated. How permeable is the CBM property? You want permeability, otherwise the gas can’t flow. If the coal isn’t permeable at all, you can never generate gas. The gas has to be able to flow. If it is extremely permeable, then you can perhaps never pump enough water. The water just keeps getting replaced from the large area surrounding the well bore. The water will just keep coming, and you will never lower the pressure so the gas can be released.

5) WATER

In a very high proportion of CBM plays, the coal contains quite a lot of water. You have to pump the water off in order to reduce the pressure in the coal bed. Gas is held in coal by pressure. The deeper you go, typically the more gas you get, because the pressure is higher. The way to induce the gas to start flowing is to pump the water out of the coal and lower the “water head?of pressure. How much water are we going to produce? Are we going to have to dispose of it? If it fresh, then there may be problems with regulatory agencies. In Alberta, the government has restrictions on extracting fresh water because others might want to use it. One could be tapping into a zone that people use as water wells for farms and rural communities. Both water quality and water volume matter. For example, Manville water is very salient so nobody wants to put it into a river; this water is pushed back down into existing oil and gas wells in permeable zones (but which are also not connected to the coal).

6) FUNDING

To be able to access land and do some initial drilling, i.e. the first round of financing, it would cost a minimum of C$4 million. This would include some geological work and drilling at least five or six wells. In Horseshoe, that would cost around C$4 million (say 1st round of finance); in Manville, about C$9 million. This is under the assumption that the company doesn’t buy the land. The land in western Canada is very expensive and tightly held. Much of the work is done as a “farm in?drilling on land held by another for a percentage of the play. (Editor note: During a previous interview, Dr. Marchioni commented about his preference for Pacific Asia China Energy land position in China because comparable land in western Canada would have cost ?100 million or more.?
7) INFRASTRUCTURE

The geology only tells you what there, and what the chances of success are. You then have to pursue it. Can we sell it? Gas prices are “local,?meaning they vary from country to country, depending whether it is locally produced and in what abundance (or lack thereof). How much can we extract? How much is it going to cost us to get it out of the ground? Are there readily available services for this property? Will you have to helicopter a rig onto the property at some incredible price just to drill it? Will you have to build a pipeline to transport the gas? Or, in China as an example, are there established convoys for trucking LNG across hundreds of kilometers?

One addition, which we have mentioned in previous articles, and especially in the Market Outlook Journal, “Quality of Management Attracts PR,?it is important that the CBM company have experienced management. This would mean a management team that includes those who have gotten results, not only a veteran exploration geologist but a team that can sell the story and bring in the mandatory financing to move the project into production.

There are two primary reasons why many of these coalbed methane plays are being taken seriously. First, the macroeconomic reason is that rising energy costs have driven companies in the energy fields to pursue any economic projects to help fill the energy gap. Coalbed methane has a more than two decades of proof in the United States. The excitement has spread to Canada, China and India, where CBM exploration is beginning to take off. Second, the fundamental reason is that exploration work has already been done in delineating coal deposits. There are, perhaps, 800 coal basins globally, with less than 50 CBM producing basins. In other words, there is the potential for growth in this sector.

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How Risky is Stocks And Other Relative Investments?

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Just as the saying goes, we live in a risky world. Almost everything we do involves some degree of risk. Generally, to invest is to risk… since one is not certain about the outcome of the investment.
Stock Investing, Stock Investment, Stocks, Stock Market, Stock Trading, Penny Stocks, Buy Stocks, How To Pick Stocks, Bear Share,Share, Investment Risk, Risk Free, Business Risk,Investing Risk.
Just as the saying goes, we live in a risky world. Almost everything we do involves some degree of risk. Generally, to invest is to risk… since one is not certain about the outcome of the investment.

According to Wikipedia, investment or investing is a term with several closely-related meanings in business management, finance and economics, related to saving or deferring consumption. An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it.

Today, many don’t like to hear the word investment merely because it involves risks. Apparently, to invest is to risk; but we should not because of the risk avoid investing.

It will be much better for one to learn how to manage risks associated with investment rather than avoiding investing totally. A good investor should learn how to manage the various risks associated with every investment. It will not be wise for one to avoid investing merely because of the risks associated with investment.

A potential investor should also know that the risks associated with every investment varies. For instance the risk associated with Stock Investment or Stock Trading is not the same with that associated with forex trading. Likewise, the risk associated with real estate investment also defers from the risk associated with transport business. Every business we do, no matter how small has its own risk.

What is the major fear an investor faces? The major fright investors face is the fear of losing money. Each time you give investment a second thought, the next thing that may come to your mind is that you may be losing your money.

Also, if the assets you invest in are held in another currency there is a risk that currency movements alone may affect the value. This is called currency risk. To venture is to risk and it is very difficult for one to do without risk in life, since every thing in life is all about risk… even life its self is quite very risky as well.

Finally, to invest is to risk, look for a good financial adviser before embarking on any investment, or read more on how to avoid some mistakes in the investments through the author’s links below:-

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