Iofina Share Discussion Threads

[superg1] 04/12/2014 19:12

I sense a margin call forced sell for that little run at the end there.

I say that because at the same time a similar thing happened over at FUM. So someone with those 2 in their portfolio had to sell. Maybe they got caught somewhere else in their portfolio as neither of those shares would have triggered it today.

Mooching about now to see if there is anything similar on other shares I see mentioned on both threads.

[che7win] 04/12/2014 17:41

Very interesting article:

[freshvoice] 04/12/2014 17:35

Better than ambidextrous!

[mister market] 04/12/2014 17:16

Joestalin - I'm not oblivious, just ambivalent

[che7win] 04/12/2014 17:15

superg,
thanks for posting that, so it looks like they can produce at ~$40 to $52 costs all day long.

So we can say that Mid-States looks safe, although they have a lot of debt. In any case, their properties look very attractive, that's all that matters to us.

It would also show that IOF operates in a very attractive area for the oilers which is good to see.


What about the others, I assume with our plants all in close proximity of each other, costs will be similar for the other suppliers?

That helps a lot.

[roger melly] 04/12/2014 17:01

Bloody hell Fresh, I wouldn't call a handful of small punters "the market"!
Ffs the volume was under 200k shares today, what's that about £70ks worth?
For once I agree with Netters, you need to look at the volume traded, any shift in price with big volume tells a story. The rest is just bored punters.

[joestalin] 04/12/2014 16:59

Mr Market is oblivious to the company - all the sector is down. I cannot see anything in my list that is not red today.

[freshvoice] 04/12/2014 16:49

Not a good end to the day, market doesn't believe the company. Period.

[cyberbub] 04/12/2014 16:36

PS I am an LWRF holder

[superg1] 04/12/2014 16:12

Have a read

It's the last Midstates update in November, io2 is with Midstates. I expect more plants/pods in the future with them.

They include details of actual operating expenses per barrel taking out the initial costs. From that you'll see why they let wells run for many years
as opex is very very low.

[cyberbub] 04/12/2014 16:00

People might like to take a look at LWRF... risky but the medium-term reward could be very high if the management can get their act together...No advice intended DYOR etc

[che7win] 04/12/2014 15:31

"ammons 4 Dec'14 - 14:14 - 27484 of 27489 0 0
Surely there comes a point when so little oil is being produced that the oil company is no longer
interested in the well and kisses it goodbye??"

Ammons - I have read fracked wells can continue to pump oil for 30 years, albeit probably a trickle at the end.

You have to remember that a fracked well might be drilled vertically for 10,000 feet, then the drilling moves horizontally along the shale being fracked.

The costs are sunk in the well at this stage, every few years a new horizontal drill will be done to exploit a new area of the shale from the same vertical shaft.

superg, I'm not convinced that the water volumes don't decline, but this is all hypothetical and only because I want to guage the risks to existing plants.

My own conclusion is that the risks are minimal.

The fracking where we are I believe can continue right down to $42. Other area's have development being pulled such as Canadian Sands, Norway, North Sea, Artic and higher cost shale plays.

With ongoing fracking these past few years, the plants should be well supplied for the next number of years regardless, but I always want to look at possible scenarios.

The mobiles of course, can move around - why they haven't got one of these in the field is beyond me.

[superg1] 04/12/2014 15:01

Here is another reference, note the last paragraph, wells typically go on for between 20 and 30 years at which point the economics cease so they are shut in.

As shown many older US wells produce 50 times more water than oil, which tells you the water doesn't decline like oil does.

The US average is 5 times to 8 times water v oil due to many older wells.

Produced water is by far the largest volume byproduct or waste stream
associated with oil and gas exploration and production. Approximately 21
billion bbl (barrels; 1 bbl = 42 U.S. gallons) of produced water are generated
each year in the United States from nearly a million wells. This represents
about 57 million bbl/day, 2.4 billion gallons/day, or 913,000 m3
/day (Clark and Veil 2009). More than 50 billion bbl of produced water are generated each year at thousands of wells in other countries (Figure 1).
Early in the life of an oil well, the oil production is high and water
production is low. Over time the oil production decreases and the water
production increases. Another way of looking at this is to examine the ratio
of water-to-oil volume:

• Worldwide average estimate – 2:1 to 3:1
• U.S. estimate – 5.1 to 8:1, because many U.S. fields are mature and past
their peak production (Clark and Veil 2009), although the ratio may be
even higher as water is not always measured directly.

• Many older U.S. wells have ratios > 50:1

At some point the cost of managing the produced water exceeds the profit
from selling the oil. When this point is reached, the well is shut in.

[superg1] 04/12/2014 14:47

Going down the road of creating a problem that doesn't exist.

Why not just go with the data from the US survey and various other references.

I just checked Wiepking as it can be done in just a few minutes.

About half of their oil producing wells for this year are running at between 2 barrels and 10 barrels per day.

Their current average production over their 65 wells is 32 barrels per well.

[chapv] 04/12/2014 14:38

worst case scenario surely we could drill our own wells!!

[rogerbridge] 04/12/2014 14:34

All pretty low key at the moment, it takes a lot of patience waiting for the better times ahead.
I have been thinking about the brine wells and concerns about long term brine flows.
I am not in the slightest concerned about the future remember that we have patented technology and those with greater vision can see the possibilities for using pods that can be situated in any country where the conditions are favourable

We have the probable Japanise connection that is very exciting for the future of us all.

Currently, the chemical division is expanding and requiring more and more brine and the low iodine price should make margins very healthy. All added value.

The water will come and who knows what else, I am looking forward to 2015 and beyond.

[superg1] 04/12/2014 14:31

Ammons

You would think so but they keep them going. I picked up the details of that from close examination of Wells owned by a company called Wiepking Fullerton as in the relevant state full well records are available.
Take Northcote they exploit and rework such well producing very low bpd per well.

If it's 25 cents to dispose of 1000 barrels of brine (250 dollars) and you are getting 10/20 barrels of oil worth 700 to 1400 then it's economical to leave wells to run.

[joestalin] 04/12/2014 14:30

When the recoverable oil runs out, the well would be decommissioned. While there is a flow of oil from a well, it would be extracted up to the point where it becomes unviable. This does not necessarily depend on the spot price. The oil could be hedged for instance.

[ammons] 04/12/2014 14:14

""Oil companies don't turn off producing wells they just cut back on new wells.""

Surely there comes a point when so little oil is being produced that the oil company is no longer interested in the well and kisses it goodbye??

[arlington chetwynd talbot] 04/12/2014 13:06

Hey Che,

Ask Graham to pop a volume chart in the header, if he doesn't know how I will help.

The fact he will read this and pretend to ignore it is why I am playing charades.

[superg1] 04/12/2014 12:37

As mentioned on the only comprehensive survey on produced brine. 28 states replied including OK.

The brine cut increases and up to 98 percent of the liquids produced are brine when the well is near it, so end of life.

980 barrels of water for every 20 barrels of oil

The decline you may have read is the Atlantic aquifer. They showed no decline, medium decline, and heavy decline, to give an example of the economics.

[che7win] 04/12/2014 12:26

superg,
I would like to read some of those old IOF reports as I read that water volumes do tail off.

I also read that oil/gas production can continue for up to 30 years on fracked wells, albeit with a long tail of small volumes.

I understand what you are saying about the fracked wells - the capital to sink the well has been spent, they will keep producing.

I would also expect that the horizontal drilling lines from the vertical well will be drilled over a period of time, so there is ongoing refracking.

I'm still not clear on the stats here though.

I expect oil exploration will slow down for a while.

[gadolinium] 04/12/2014 11:23

Hello Engelo,
You need a readers pass. I am just off out for an hour or so, I will reply with some details when I return.