Iofina Share Discussion Threads

[superg1] 17/12/2014 11:53

Citadel are in the business of water supply in the bakken. They made these comments this month. They anticipate 3 to 4 times the water needed compared to an average 60 to 80k barrels per well now.

They are facts from the guys actually in the industries. Other facts on the same topic are from the oil companies themselves (it's in their news updates). Slick water is on the way it seems which will multiply the amount of water needed. Given that it produces oil more quickly, the lower the price of oil, the more important the rate per well becomes

'The reemergence of a simple frack design is increasing production, lowering well costs and impacting water usage in the Bakken. Slickwater fracks have become a go-to option for many Bakken operators.'

This Society of Petroleum Engineers paper, released late 2013, provides a lot of technical detail on why the industry is hearing more about this methodology for the Bakken. The authors showed that higher-cost, advanced completion techniques work in the Bakken, using data from a sample of 1,100 wells. Some key Bakken players, such as Oasis, have now bought in. Oasis Petroleum has already said that in the second half of 2014, 60 percent of all new Oasis wells will be completed using slickwater fracks after test results revealed a production increase of nearly 25 percent over wells completed with other methods. Triangle Petroleum Corp. said it has increased production by as much as 40 percent with the combination of cemented liners and slickwater fracks and reduced well-completion costs by $400,000 per well thanks to slickwater. Liberty Resources II, the exploration and production firm considered a leading-edge completion designer, has gone almost exclusively to slickwater fracks. And Lynn Helms, director of the North Dakota Department of Mineral Resources, said earlier this year that one of the major trends his office is seeing is the use of more water (slickwater) in frack jobs performed in the state. Depending on the operator, Citadel forsees this practice becoming standard over the next few years in the Bakken.

What does this mean for Citadel’s model? Supply and reliable delivery of freshwater are the key concerns for E&Ps. With the increased amount of water used, Slickwater fracks are basically tripling or even quadrupling (assuming approximately 60,000 to 80,000 bbls needed for the frack job.)


Those that don't read and research are very useful, as they hand over cheap shares to those that do on many companies.

It's not about being a bull or enthusiastic it's all based on facts. The facts seem to bore most, but they are what make the difference.

Months ago some were complaining about the fracking disrupting iodine production, now the oil price has dropped the same folk panic about lack of fracking.

They also ignore repeatedly that many companies have forward sold a lot of their oil through next year at over $80 and $90 per barrel.

So while the current oil price isn't the price that is being paid for oil for most of it.

In fact on these prices Continental resources are not going to hedge for 2016 oil and take their chances on the spot price then, which I suspect will turn out to be a very smart move.

Who knows what is behind the crash but what I do know is that it severely affects Russia who have been casting eyes back towards old regions. Then the various middle east disruptions, where oil production has been stolen, and don't have forward rates, so their spot price to fund their activities has been hammered.

[stevo2011] 17/12/2014 11:41

Well maca over the hill isn't amused with all your postings ref slick water and is doing a running commentary on where you are going wrong, the boy is putting a lot of effort in.

[superg1] 17/12/2014 11:27

On the other Bakken facts.

They estimate 2000 wells per average over the next 20 to 30 years.

Bob Shaver got his water calculations wrong as he couldn't be expected to include maintenance water per well to clear the salt.

600 gallons per day per well, 14 barrels. 5000 barrels per year per well.

The current count is 12000 wells = 2.6 billion gallons per year on maintenance water. In creasing 216 million barrels per.

In 10 years time it will be 7 billion gallons just on maintenance water, with 10 billion total including fracking.

The forecast for last year was 3 billion gallons to be used in fracking.

By the time they have finished drilling maintenance water will be 3 times what they used for fracking last year.

None of the above includes reworking of existing wells.

Now move onto slick water and what the oil companies are saying then even if they slashed drilling by 50% the method uses so much water the rate of use would rise.. I would imagine they will re work existing wells using that method too.

So in theory looking at the facts, water use is going to rocket in the Bakken as it progresses regardless of the oil price.

[eddyeagle1979] 17/12/2014 11:22

Cheers Angel - very waterlogged indeed! Let's get back to the basics...

[angel of the north] 17/12/2014 11:16

eddyeagle - well said my man. This thread is a bit waterlogged at the moment and a bit confusing for new visitors.

[superg1] 17/12/2014 11:15

Will sort something eddy.

We only had io1 and 2 running when they reported an average of .85 mt per day with some days 1mt hit. That would have been mainly io2. It's the frack boom that has disrupted. Where IOF are has been the highest drilling activity for all the Mississippi play.

So iof fracking stopped tomorrow production would go up, as the amount of brine going to plants would increase and stabilise. The decline rate is no where near what oil does.

Someone did ask.

'not worried on brine to plants at any price' price meaning the oil price.

[eddyeagle1979] 17/12/2014 10:55

SG - just wondering if we can have some info on IOF in the header? Ie. What they have achieved in the last two years in terms of getting plants up and running and targets for the future etc. I just think anyone new to this thread would be confused by the current header focusing on SQM and if nothing else it would remind us all that this company is actually making progress! Cheers...

[naphar] 17/12/2014 10:29

Sg
I don't agree that it's a fact iodine output will go up if fracking stops.
available brine would go up, but it's not a fact the ppm would stay the same or rise. Surely ppms could go down as the mix of Wells supplying the brine changes?

Maybe it's a potential negative you've missed, or otherwise dismissed for some reasons? It seems a perfectly plausible outcome to me though, that I wouldn't want to blind side people.

What am I missing?

[j4ckster] 17/12/2014 10:06

Another interesting read on Slickwater...

"Although Halcón is pumping the same approximate amount of proppant into the slickwater wells, it is pumping much more water. The result provides the desired outcome pursued by every other Bakken operator that has transitioned to slickwater fracks. “It creates a more complex, intricate frack network,” Cusack says."

[superg1] 17/12/2014 09:55

I work on looking for the negatives just as all do that's how I research any share. Positives are obvious, negatives are not.

Hence many months back I saw the slick water thingy being trialled in the bakken. I didn't know if slick meant less of it needed. I then found it's a system where they use lots of water and less of the expensive gels.

There is data showing in some cases over 250,000 barrels is used to frack a well.

Oasis are one of the biggest in the Bakken and also out put a lot of details. They tried 4 slick water wells, and had great results, then announced they would do 20% that way in H2.

Now they have announced due to the oil price drop that they will do 70 to 90% of previously planned wells next year. most of them using the slick water method.

Oasis had been trialling other methods too. They can afford to tinker around when prices are high, but once prices drop they cut the excess fat and go after the prime spots with the proven best techniques.

So next year if most are slick water, then they will be using a hell of a lot more water than they used this year.

The reports state the slick method is going to be the preferred method over the next few years. Liberty in the Bakken are doing all their wells that way. Not surprising really as they saw 100% to 200% better production rates over other techniques.

The information is out there if you look.

Liberty commenting on the slick water method employed

“Liberty’;s philosophy is ‘reservoir stimulation, not proppant disposal’. To enhance contact area and conductivity, Liberty generally uses plug’n perf, ceramic proppant, and slickwater in its completions.

“Management provided data showing this combination can improve cumulative oil production by 120-200% over 180 days compared to other techniques, while improving EURs nearly two-fold. Compared to the Bakken as a whole, Liberty’s 365 day cumulative oil number is 56% higher than the basin’s average.

“Investors on the call had questions whether slickwater only enhances economics in the lower-quality portions of the Bakken; management provided data showing the exact opposite; i.e., it sees more of an uplift in higher-quality areas. Further, Liberty’s service group works with 10-12 operators across the basin and said it has seen similar improvements across all areas of the Bakken.”

[che7win] 17/12/2014 09:38

Superg,
I didn't want to mention the gas wells :-)

All this fixation on oil, yet you are correct, we receive a lot of our brine supply from gas wells.

[superg1] 17/12/2014 09:25

Che

Once again nice to see someone getting to grips with the understanding. Some think folks are trying to be over confident but all we are doing is researching relevant topics and sharing the facts.

It is a fact that if fracking ceased in OK right now then IOF production would go up.

Some also forget their are a large number of gas Wells in the area that are still throwing out high ppm and high bpd. It's not just about oil that just happens to be a recent trend.

[bocker01] 17/12/2014 09:21

Nicely put Che!

[che7win] 17/12/2014 09:10

Ammons,
I was giving a reply to the quote "fracking wells don't run for 30-40 years".

I can't believe how you twist my post, I thought the article answered that question pretty well and give a good background about fracking and the amount of water needed over the lifespan of a fracked well.

Along with that, it is the salt content and it's well characteristics that is most important.

Why do you think I said "I have better examples for our wells elsewhere"?

I could show you articles with 50 year lifespans, other articles with 20 year lifespans for fracked wells.

You clearly need to do a lot more research rather than whinge all the time on these boards, it seems shareholders that have to question which shale deposit we operate in need to go back to basics.

Each well is different, it is like the iodine ppm, it can vary even with wells in close proximity to each other.

You can't tar wells with the same brush, some wells might be economic for 5 years, some might be economic for 50 years. When the costs are sunk, it takes very little to keep a well producing, some might pump 10 years later at 50 Bpd, but if it makes money it will keep pumping.

That's why I have been talking about the long tails of wells.

You would be better looking at the water cuts if you want to look at IOF in proper context to oil well economics.

I fully expect oil production to level off, oil companies may well struggle, but for us, it makes no difference over the next few years.

One thing is for sure, now I know why the share price is so low 😄

[superg1] 17/12/2014 07:30

As an example the little old Brown J burns have run an oil well near IOF's acreage for many years where they found a small pocket with low flows.

When they talk cost they refer to the cost overall v the anticipated recovery from wells. Wells tick over on very low rates in their later years and they are still viable.

As I put in another post check out the wells of Wiepking Fullerton in Colorado, that state has online access to full well records, most of them have very low production rates.

EG Around half their wells have done under 3000 barrels each this year which is less than 10 bpd, some are doing 2/3 bpd. They are viable.




Che was sceptical and decided to do his own research, you saw the result.

[muffster] 16/12/2014 23:55

Well said ammons. Che and super talk endlessly and lose money every day here. They know very little and their views are just that, views. Poorly informed and losing cash

[ammons] 16/12/2014 22:59

c7w, with respect to your post 28038.



The link you provided refers to wells in North Dakota maybe lasting 30-40 years. IOF do not have any iodine plant in that state. They are all in Oklahoma aren't they?

[che7win] 16/12/2014 22:11

Thanks superg,
Yes, slick water fracking looks an exciting way forwards.
It's interesting that the Bakken producers haven't cared too much about costs when the going was good.

I have heard they have ignored efficiency measures because they were making so much.

[magpie99] 16/12/2014 21:32

Can you please have a peek at half time and give us some good news?

[mr biggest] 16/12/2014 21:30

The difference between you, me and myself is I look at the score and if I don't like it I don't watch the match, otherwise I watch the match knowing the score beforehand.

[muffster] 16/12/2014 21:01

Anyone buying? I am tempted at 24p, but think it will be a penny share soon

[stevo2011] 16/12/2014 20:42

Keep up the drinking