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It's not nearly as magical as spinning straw into gold, but if SulphCo (AMEX:SUF) can crack the code of ridding sulphur from heavy-grade crude oil, it might be just as valuable. Unfortunately, "Sonocracking" hasn't lived up to the hype so far, and that could be why the collective wisdom of the 110,00-strong Motley Fool CAPS community has bestowed a lowly one-star rating on SulphCo.

Out with the old
Forget the management housecleaning that was supposed to usher in a new era of corporate transparency. For all of its communication with investors, SulphCo has no more to show for its efforts than it had under company founder Rudolph Gunnerman.

Oh, sure, it's had deals by the handful -- including an aborted one with Chevron (NYSE:CVX) that came to naught -- but if they're anything like their latest with Amira Group, it all looks to me more like a way to separate investors from their cash.

Wearing many hats
SulphCo's press release describes Amira as a venture-capital firm that's also an oil trader and services provider, but it wasn't too long ago that it was tied to a group bringing cell-phone service to Iraq (IrakCell) and to a Web services and design company (Crown Productions). It's also tied to a major proposed oil refinery, the Gulf King, planned to be operational in Louisiana by 2012.

In fact, if it could turn out 600,000 barrels per day as suggested, that would place it sixth on the list of the world's largest refineries, just behind ExxonMobil (NYSE:XOM)'s largest refinery but above the largest of BP (NYSE:BP) ConocoPhillips (NYSE:COP), and even refining pure-play Valero (NYSE:VLO). This from a company no one's ever heard of! If this is the sort of company with which SulphCo is making its exclusive distribution agreements, then perhaps things haven't changed all that much since Gunnerman was in charge.

The catch? There is no catch!
SulphCo is like cotton candy: It tastes great, but so far, it appears to have little substance. Its oft-touted Fujairah project in the United Arab Emirates -- what started as a 180,000-barrel-per-day demonstration project -- has consistently seen expectations being cut back. Management transferred 90,000 barrels per day to Southeast Asia, where it says better opportunities exist, and has plans to divert as many as 60,000 additional barrels per day elsewhere.

It's no way to run a railroad
And when it comes to getting production running, "delay" is probably the only sound investors will hear. During a presentation last month, SulphCo's CEO Larry Ryan highlighted all of the wonderful projects the company had going in Europe, Southeast Asia, North America, and the Middle East. It seems now that unforeseen circumstances are becoming a regular issue. In the Southeast Asia segment, a customer had a management change that led to delays. North America had environmental and operational concerns. Meetings that were supposed to happen with the European client in April have been pushed back to the third quarter.

Don't get singed
We'll have to wait and see whether these projects amount to anything, but if history is any guide, investors should have low expectations. On Motley Fool CAPS, our research shows that one-star stocks such as SulphCo have underperformed the market by nearly 12 percentage points. Head over to CAPS now -- it's free -- and tell us what you think of SulphCo or any other stock you want to sound out.

Fool contributor Rich Duprey has no financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.