This company makes astonishing returns by helping oil and gas drillers pump more from their wells, says Vivian Lewis of Global Investing.

I just bought shares of Computer Modelling (CMDXF), which also trades in Canada (Toronto: CMG). The quirky employee-controlled Calgary small-cap company makes reservoir modeling software used to get the most out of oil and gas wells...and also makes astonishing profits.

We owned it in the past, and contrary to my worries then, CMDXF has shifted its models to also produce optimum results with non-conventional wells, like oil and gas fracking sites and ones producing tight gas and coal bed methane. It also helps petrochemical companies optimize their use of injection for fracking.

The company sells its technology licenses to drillers for oil and gas, along with support services, a steady income stream.

The stock is rated outperform by Scotiabank and a Buy by Toronto-Dominion. It raised its quarterly dividend by 12.5%, and also issued a special dividend of 5 cents, making its total payout 23 cents (now paid).

In its FY 2012-2013 (to March), its revenues rose 12% to $68.6 million, on which operating profit jumped 9% to $34.29 million. But operating profit came in at 50% of sales. Net income was $6.663 million, or 18 cents per share, up 50% from prior fiscal year.

The company sells 56% of its systems in the US and Canada, and another 17% to Latin America. The rest of the world takes the rest.

Near-term, the company has resolved issues in finding a new CFO. The departing CFO and vice president for finance, Jack Kalman, will be replaced August 1 by Sandra Balic, a chartered accountant who was comptroller and handled the company's conversion to new financial reporting standards.

Schlumberger recently acquired Gushor, another Canadian company that specializes in heavy oil sand exploration by analyzing gunk to help extract it. Computer Modelling offers us a chance to participate in this same market. This is a low-volume stock in the US, so it may better be bought in Canada.

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