Iofina Share Discussion Threads

[superg1] 10/9/2014 15:20

Taking of monthly updates, the curse of that is some knowing roughly when news is coming take a punt a T trades.

Most T trades are going to be closed whatever happens. In fact the T 20's are probably the ones most popular with those that don't have the cash to cover them.

For those that don't understand T trades. It's like a credit card that you have to pay by a certain date.

In the case of a T 20, it's 20 days, but with cash clearing taking 3 days, you have to settle up at the latest by day 17 (17 working days).

Not forgetting of course that most PIs seem to buy on a price rise, so the surge to 63 to 65 probably had some T trades coming in.

Whatever happens on day 17 many have to close as they simply don't have the cash to pay the full amount to roll it over.

So if the price is up, you make a profit on whatever it has gone up by. If down, they you owe that amount.

I thought the steady in recent months had slowed that game up, but it looks like the 40mt and 1.7mt rate has had a few making a bet, the consequences of which we are now seeing as 'sells'.

News good or bad, the T traders without funds, have to close them.

[alphacharlie] 10/9/2014 15:17

Sorry SG. You did indeed but I failed to pick it up.

[bocker01] 10/9/2014 15:03

I worked in Oklahoma for a while. There's some greenery near the main water routes but it's 98 percent desert scrub and dry lands. Agriculture really struggles and large parts cannot support cattle or anything much else. Water's a real scarce item.

[superg1] 10/9/2014 14:58

Alpha

I did explain.

Slickwater is in use in the Bakken and other areas where they have high volume fresh water to do it.

Slickwater methods are not viable for use in OK as they simply don't have the fresh water available. In fact it seems they don't have enough fresh water for normal fracking either.

Oklahoma has the highest cut of water in wells anywhere in the US. In some case 9 barrels of water for every barrel of oil. So in OK with such high water volumes, they use the produced water for fracking.

In the case of fresh water use, the flowback (injected water returning) takes about 2/3 weeks to fully clear from a well.

In OK they using the produced water, and as they will use the nearest supply point, so it's likely the iodine content is the same as the well they are fracking, so no dilution.

As pointed out, if they were using fresh water, then IOF wouldn't get the disruption on flow rates.

OK is a web of pipelines going to SWDs. If you siphon off at any point to grab some produced water for fracking, then it reduces the flow to SWDs and a plant if it is sited at the relevant SWD.

If OK used fresh water there would be no disruption brine flow, just the occasional dilution as flowback water comes through.

If OK has 1000 wells done each year (freshwater)that would be 50 million barrels per year diluting a yearly SWD rate of around 2.5 billion barrels.

Or an overall dilution percentage of just 2%.

So freshwater use is nothing to concerned about, it doesn't disrupt flows, and doesn't dilute it a lot either.

The slickwater point is about the huge increase in water consumption that is likely to appear in North Dakota and Montana, where they do have the freshwater to use. That surge in use should support IOF's water application and enhance the value of the Atlantis asset and the discharge permit.

[alphacharlie] 10/9/2014 14:56

Thanks for the thoughts guys.

[bocker01] 10/9/2014 14:29

Didn't think they had sufficient water in Oklahoma to use the slick method. Maybe it's different hundreds of miles up north where it's started to be employed.

[1madmarky] 10/9/2014 14:27

Initially yes of course, but once the well is producing the concentration will be whatever the concentration would have been. The plus point being that the well will be producing more than it would otherwise have been doing.

[alphacharlie] 10/9/2014 13:28

SG, I can't see if you've given an opinion so I might ask too re mikkydhu's post 24272 - does the iodine concentration in the produced water get diluted because of the greatly increased volume of water used in the slickwater process? TIA

[anger taxes son] 10/9/2014 13:27

Me. Watch this space!

[monkeymagic3] 10/9/2014 13:25

Anyone else bored with this monthly charade of what production might be, when it might be, what it might mean, what it may mean for next month etc etc etc etc

I liked the idea of monthly updates but had no idea it would come with all this "baggage".

[freshvoice] 10/9/2014 13:17

Real tree shake now, or a leak in spite of Super's optimism. Let's hope it's the MMs getting stock ready for a buyer when we hit our target for the month!

[superg1] 10/9/2014 11:06

???

If OK moves to slickwater use, then we don't get the brine flow frack disruption issue.

That happens as they tap into the brine flow pipes to use produced water to frack.

Oklahoma do what they do, because they don't have the fresh water available.

[superg1] 10/9/2014 11:02

From some reports on the topic which sums that point up.


MORE FRACKS MEANS MORE WATER:
The availability of water in the Williston Basin has made slickwater frack designs feasible. In Texas, the use of such completion design has to account for the availability of water.


The slickwater point raised is to do with a probable big demand increase in the Bakken.

The method in the last year or two uses 2 million gallons per frack in the Bakken. With slickwater is can be 4 mill to 8 mill gallons and more per frack.

Looking at the results, reported by various companies, it seems logical that operators will use the method on reworking wells too.

That Halcon report summed it up with the two types of method on the same well pad

IP, record of 4,381 barrels of oil equivalent per day. An adjacent middle Bakken well on a spacing of approximately 660 feet came in with an IP of 3,551 boepd. In comparison, two earlier middle Bakken wells on the same spacing unit that were gel fractured had IPs of 2,675 and 2,174 boepd. Halcon saw similar improvements in wells on its neighboring Blanca North pad.

Old method total 4,848 boepd

Slickwater 7,932 boepd

It speaks for itself.

[superg1] 10/9/2014 10:50

Mik

The voting system is weird, as 2 voted that up, probably the trolls.

In OK they use produced water to frack, so it has iodine in it anyway.

But the whole point of slickwater is the word slick.

Less chemicals and gels make the water less viscous. Hence they find with slickwater the flows are better.

Produced water, will be more viscous than fresh water due to the oil and other contaminants in it. So imo it's useless as for the slickwater process.

The whole point of slickwater is high volume low viscosity fluids.

It seems the Oklahoma folk get great results anyway, and the main reason they re-use produced water is due to the high water cut from wells (highest in the US), and the lack of fresh water being available.

[mikkydhu] 10/9/2014 10:21

With slickwater fracking, will the iodine concentration in the produced water be diluted because of the greatly increased volume of water?

[engelo] 10/9/2014 10:16

SG to steal a bit of your post, 'you have no idea how the next month is going to go'. Just about sums it up ATM.Can cope with that, but no idea how the last month has gone is a bit wearing ;-)Perhaps they will combine the August figs with the date for the interims. Don't think they will slip them into the interims themselves.

[superg1] 10/9/2014 10:01

The speculation amuses me.

For July production news the price climbed from around 45p to 60p, a 30% plus hike and nobody was jumping up and down thinking it must be a great month.

The news was 25mt, so if you go on the chart indicator, it was way off.

Now it slips a few pence off highs, and the assumption is all is not well. :-)

The 45p dip looked down to 3 MMs selling to zero (1 mill shares between them), once thy were done it moved up.

It has felt recently like it's that game once more.

For all we know a supply deal could be very close, and they want to hang on to add that into news.

I haven't the slightest clue what the figure is for August.

I do know I like the look of India imports as they still seem very active, some prices in the 38-39 range in the last few days from Chile look promising.

[superg1] 10/9/2014 09:37

No date yet, but we are not far off the period they normally announce it.

As for news this week or next re production it's a swings and roundabouts scenario.

If you get a an update early in the month whether good or bad, then you have no idea how the next month will go.

If you do it mid month then you can give a guide re have the current month is going.

EG In this case have IOF hit 1.7mt ??

Well if they told us yes right at the start of the month, then can they sustain it.

So if they report mid month like last time, they could say 1.7mt hit for 2 weeks, or hit some days and not others etc. Perhaps they can get higher due to tweaks near term.

Obviously it's nice to have good figures, but personally I'm long term while the story stays roughly the same. It would take a significantly material shift in the business plan, or iodine market circs to cause me to reconsider my view here, and I doubt wither of those will happen.

I think some rely on news to meet trading timelines, such as T trades. IE they don't have the cash to cover it and become forced sellers, be it on good news, bad news, or no news. Where the cash isn't there to cover it, it has to close no matter what.

If anyone does that, then it's just tough when it doesn't work out.

[square1] 10/9/2014 09:26

Not yet, but will be at least a week or 2 away I guess

[tackems] 10/9/2014 09:24

Has a date been announced for the interims, square1?

[square1] 10/9/2014 09:12

I would expect that they'll provide update with the Interims so wouldn't expect a near term announcement, but that's just me.

[freshvoice] 10/9/2014 08:59

Not too happy with no update and drifting price, always a worry that the news has leaked to those 'in the know'.

[roundup] 10/9/2014 08:58

It looks as if TB is prepared to let the share price drop before he shows his hand.

[naphar] 09/9/2014 20:25

Che, concerns about Scottish independence won't be helping on the exchange rate front.

[che7win] 09/9/2014 19:32

Pound still falling, even with Carney mentioning interest rates might rise first quarter next year: