There’s no such thing as a risk-free investment, particularly if you’re browsing among publicly traded oil service companies.

Historically, the sector has been on the spooky side, like a highly strung quarterhorse.

But that doesn’t mean bargain-hunters who respect an intelligent, no-frills business plan shouldn’t consider taking a flyer now and then.

Pulse Data Inc., a Calgary-based seismic company with 20 employees and sales of $35 million last year, may be a case in point.

Shannon Oatway photo, Business Edge
Pulse Data CEO Ken MacDonald has built up a profitable seismic-information library as his firm acquired two companies in the last two years.

Since acquiring a much larger company (ReQuest Seismic) in early 2002, and recently completing the $9.7-million purchase of Mosaic Mapping Corp., Pulse Data (PSD-TSX) finds itself sitting on a vast and profitable library of two-dimensional seismic data. Like a lending library, Pulse licenses and relicenses this information to mid-sized and junior oil companies for about $600 a kilometre. Its growing collection of 3D data is also available at a much higher price.

OK, it’s not a hoard of gold bars. But some believe it’s even better – because seismic information is an asset with an enormous shelf life. And with oil prices so buoyant, Pulse’s data is in demand, as corporate geologists and geophysicists use new technological tools to take a fresh look at seismic imagery shot in the fields of northeastern B.C. and Alberta.

Much of the data is more than 20 years old. But even an old piece of seismic information can lead to new prospects and new profits.

“Ten years ago, the big companies kept their seismic data to themselves,” explained CEO Ken MacDonald, a University of Calgary-trained geophysicist.

“Now companies don’t mind sharing the data. The correct interpretation of the data is what’s valuable.”

While actively seeking buyers interested in licensing data from its stockpile, Pulse Data continually acquires fresh information at low cost by organizing what’s known as “multi-client shoots.”

Long ago, MacDonald and his team decided not to tie up capital by purchasing the expensive equipment that’s required to gather and process raw seismic data.

Instead, they prefer to round up five or six interested clients and ask them to share the cost of the shoot.

Pulse then hires experienced sub-contractors to handle the field work. Once it’s complete, the partner companies enjoy lifelong access to the new data while Pulse retains ownership. After an agreed period of time passes, Pulse gains the right to re-license the information to its customers outside the partnership.

“Our net cost for 100-per-cent ownership comes out to about 30 per cent. We make our money by reselling it,” said MacDonald, who stressed that the key to making such partnerships work is respecting confidentiality while simultaneously building close relationships with reliable sub-contractors.

By licensing seismic information from the Pulse Data archives, meanwhile junior and mid-sized clients do themselves a favour by acquiring access to data at a fraction of the original cost of gathering and processing.

“We sell it on average for a tenth of the price for older data and about one-third the price for brand new data,” MacDonald explained. “We all win.”

After a 15-year career in the acquisition and processing side of the business, MacDonald and a partner co-founded Pulse Data in 1987. By the time the company went public 12 years later, it had accumulated a modest stash (1,800 kilometres) of two-dimensional data.

Now it owns a storehouse of 240,000 kilometres of 2D seismic data, plus an additional 6,000 square kilometres of 3D seismic.

But MacDonald’s priority continues to be the original business plan, which stressed flexibility, minimal capital expenditure and effective cost management.

“We wanted to develop a model that would help us survive the ups and downs of the energy industry,” he reflected. “We did $35 million in business last year. The nice part is, we could still make money if we did only $20 million.”

At least one expert has taken a close look at Pulse Data and likes what he sees ($1.60 a share as of June 3), with the usual caveats.

“The service business has been volatile in the past and I don’t expect that to change,” cautioned Calgary-based analyst Miles Lich of Peters & Co.

But Lich says the fact that Pulse hasn’t tied up its cash in expensive equipment cuts down on the risk. He thinks the company is a good buy. “I have a ‘sector outperform’ rating on it, which is as strong a buy as I’ve got in my arsenal.”

Could be a bargain. These days, that’s not a word most investors associate with energy stocks.