Monday, 3 May 2010

We Wish All the Best for NXT Energy Solutions

NXT Energy Solutions Inc.
Basic Shares - 30.6 million
Fully diluted - 42.7 million


On October 16, 2008, we announced NXT Energy Solutions as our latest client. When we started working with this company it was an unknown story in the Canadian investment community (outside of Calgary) and the big appeal was and still is the potential of its proprietary Stress Field Detection (SFDTM) technology. At that time NXT was knocking down contracts with companies, such as Pengrowth Income Trust and Black Goose. As the financial markets began to collapse in 2009, so did oil and gas exploration in Canada. Budgets with money set aside for exploration were slashed; financings for exploration programs dried up and along with it, so did NXT’s business.

Recognizing the need for a change, NXT proactively shifted its focus to Colombia in the beginning of 2009. The company saw tremendous opportunity for its technology within the region and knew that sizable oil and gas companies were committed to large scale frontier exploration programs. Within just a few months of entering the Colombian market, the company secured its first contract with Pacific Rubiales for $2.3 million (USD).

This was followed up over the next year by two other contracts in Colombia, with Hocol and another major player in the region. These SFDTM survey contracts equated to nearly $4 million in revenue. While the company enjoyed early success in Colombia, what the market is looking for is a consistent and steady flow of contracts to satisfy its appetite for a blue sky valuation for this company.

As current shareholders of NXT Energy Solutions and believers in the potential of its technology, we will continue to follow this company and wish George, Ken and the rest of the management team all the best.