Iofina Share Discussion Threads

[superg1] 27/3/2015 13:49

Octopus

I like the humour. :-)

[freshvoicem] 27/3/2015 13:42

Our seller is still plodding away. Wonder how many he had/ has left?

[superg1] 27/3/2015 13:18

Briley

re

1. I don't agree that investing on the basis that no one is there to stop firms shipping the water into ND is a viable proposition. If our permit says we can't do it then this seems a reasonable starting point.

Neither do I but some have made a big point re Montana sales.

The objection by the town of Culbertson provoked some thinking when they were complaining about the process being useless as water just gets taken over the border.

Good point, so how would that impact on IOF, if Hal and others started taking the water over there.

IOF's obligation is to have it in contracts that they won't take the water over there, and have signs up saying that. Obligation over, if Hal or others then did that not it's not their problem. In the main the depot would be self-serve keypad supply.

So let's say Hal did do that, what next, and how would anyone know. There is no policing of it.

Not content with that I went on the hunt for any example.

Case of Theil in a hearing the objector raises that point. The hearing examiner says nowt to do with the hearing and that's for the future. The hearing examiner states that is best dealt with by a water complaint.

Aha

So I looked up the water water complaint form which doesn't fit those circs. It's for water use by another which affects your own permit.

It then goes on to state that the bureau normally won't get involved unless the complainant has already tried to sort out any issue with the permit holder.

I went a little deeper to find the exact answer from the experts to be hit with 'I dunno'. I suspected the Montana policy is just that, a policy with no legal back up, a toothless tiger.

So I won't be surprised if much of the water supplied from an IOF depot ends up in ND.

To prove that is happening you would need surveillance and water samples, stopping trucks etc etc etc. It isn't happening, there is no power to do it or legislation covering it.

That's why I say don't worry about the Montana rule.

[octopus100] 27/3/2015 12:37

Can someone give me the montana website link and also the claim number so I can monitor what is going on

[brileyloucan] 27/3/2015 12:29

Thank you all for your answers I agree with the point that number of rigs and number of wells are not necessarily correlated and also the point around a 15 year time horizon rather than 1-2 years but sometimes it is hard to get a deal over the line when the economics aren't there on day 1. I don't agree that investing on the basis that no one is there to stop firms shipping the water into ND is a viable proposition. If our permit says we can't do it then this seems a reasonable starting point.

As to why I am worried about water, I feel it is priced in UNTIL I see a significant increase in Iodine production delivered, but this may come with the Q1 numbers. I am invested but the upside case for me rests on the following:

Water granted AND business viable allowing JV/payment to strengthen balance sheet/allow Io growth.
Production growth continues/stabilizes into 2015 and H1 target of 220-260MT is met.
Iodine pricing improves over the next 18 months or so.

I think these are all likely but definitely not certain and my original question related to the validity of the first point.

By the way am going to Montana this summer (the other side of the state in Glacier National Park). Lovely place.

[superg1] 27/3/2015 12:07

On another point.

Yes wells drilled will drop short term as the marginal folk struggle, but there are a number of wells drilled awaiting completion. It's only a month or so ago that there were reports of lack of fracking crews to do that.

The the other point which will start to kick in now is the reworking or refracing of wells and no doubt many will want to use the new high volume techniques..

Then consider that ND has emergency legislation in place where irrigation water against water laws is temporarily being allowed for oilfield use.

So if demand drops then the irrigation lot will start to lose their temporary permits.

That isn't fanciful speculation as an irrigation permit holder has just applied to sell his water to an oil company that needs it, in Roosevelt county, in Montana.

Obviously if IOF lose their case that permit will have to be refused and so will every other permit applied for in the area in recent times.

It's about understanding the industry. The reason I dig is that I come up with the same negatives and seek to support those negative perceptions by actually looking to see if I'm right. Perceptions are of no use, facts are, the market seems to work on perception 99% of the time.

The Bakken because of the high prices was throwing in wells everywhere trying all sorts of new techniques. When the wheel was coming off they switch to what they know gives pay back. Just before the oil crash they found the slickwater method was enhancing recover from 30% to 200%.

It's not speculation as the largest well study in the bakken of 1100 wells showed slickwater gave the best returns. As those returns are immediately elevated, that's they way they will go to pay back loans.

Liberty have gone all slickwater, Oasis went from doing 4 last year to most of them now. A host of others have followed suit, I'm guessing reworking will take the slick water route too.

I was half hoping some selling recently was to do with Chile getting loads of rain. The perception would be that the rain in the driest place where the struggling mines are would be a good thing. The fact is it isn't and causes losses and problems.

They need the rain in the south for the hydro power and it's very dry there.

[bazzerp] 27/3/2015 11:18

Sorry - late posting

[bazzerp] 27/3/2015 11:17

YouCanRellib - read the past posts. This topic has been discussed several times.
The demand for water IS & WILL be there.

[che7win] 27/3/2015 10:56

BrileyLoucan,
a state of the art water pumping station will not be built on a 1-2 year horizon.

You are treating it as that, yet any partner will be looking on a 15 year horizon.

Apart from different and more efficient methods of drilling, there is refracking needed and ongoing water use for wells.
Perhaps you don't know about the Ames case? If that happens, water becomes a lot more valuable.

Look at OPEC production growth over then last decade (no increases in oil production) as opposed to rest of world.
Then look at what has made up the supply in demand for oil - it's due to US fracking.
Oil demand has increased nearly every year at a relentless rate - investment in US fracking should have been suppressed by OPEC much sooner but the genie is out of the lamp.

The Saudi's are astute enough to know that oil is needed from fracking, otherwise oil prices would soar and alternative energy sources would quickly replace oil (it's already happening with solar panel costs and electric cars).
They want to keep oil high enough without killing the economy but not so low as to price themselves out of their own markets.

It all points to a recovery - perhaps to the level you suggest, but fracking costs are down 25% recently and the ludicrous prices paid for staff will be falling quickly.
US fracking can live well below $60 in this climate, hence ongoing capital spending and ongoing increases in US oil production...so far.

One last thing - why on earth are you worrying about the water application when it's not priced in at all at current levels (never mind iodine prospects)?

PS: The US foreign policy is so successful it has nearly all the Middle Eastern countries at war (well done Obama).
We have Libya in civil war, Yemen proxy war between Shiite (Iran backed) and Sunni's (Saudi), Syria/Iraq fighting Isis, yet the oil market is currently focussed on US glut.

Oil predictions are guesses - no one knows.

[superg1] 27/3/2015 10:28

Personally I'm not particularly interested in the water revenue but any up front payment for a JV which would kick the iodine side on short term.

[superg1] 27/3/2015 10:27

It was only posted about a week ago and not lost in a sea of posts on the tips thread.

superg1 21 Mar'15 - 09:53 - 1190 of 1195 0 0 edit

For those that follow or invest in oil shares.

I note the US goes on about rig count levels, but that is not the lone factor you need to consider for any oil share you are invested in.

EG

Halcon in the Bakken in 2012 took an average of 35 days to complete a well.

In 2014 the average is down to 16 days, so they would need as many rigs to complete their planned wells.

The picture will be the same with many operators, rig count drops don't necessarily mean less wells will be drilled/completed. They just don't need the extra rigs which in general are leased. Rig count down = lease cost savings.

[superg1] 27/3/2015 10:26

Briley

Quite a lot as pointed out on the tips thread.

Slick water methods which uses far higher volumes up 250k barrels of water v 50k to 100k. One company report a combination of methods taking the slick water volume down 35%. so still over 150k barrels which is near 4 times what the objector quoted.

From a report by Halcon

Halcon in the Bakken in 2012 took an average of 35 days to complete a well.

In 2014 the average is down to 16 days, so they would need as many rigs to complete their planned wells.

The picture will be the same with many operators, rig count drops don't necessarily mean less wells will be drilled/completed. They just don't need the extra rigs which in general are leased. Rig count down = lease cost savings.


I don't want to sound off but the spoon feeding does get a little frustrating, why don't folks do their own research or just simply read what has been pointed out many times.

I wouldn't worry too much about what Montana is using either, as if you check for the legislation to deal with water taken over the border, there isn't any.

The onus of the seller is to stick signs up and to have it in contracts that the buyer can't take it over the border.

If the buyer does take it over the border who is going to know, there are no water police or laws to stop it.

In any case if Ames gets his use for exactly that then it opens the door for everyone.

3 votes up tells me 4 don't read, and the spoon is getting cramp.

[brileyloucan] 27/3/2015 09:33

Hello, can anyone tell me why I shouldn't be concerned that a reduction in the number of rigs and a new normal of, let's say, $70 - $80 oil means that if the water permit is granted, which I expect, there will not be a demand for 3,600 acre feet of water per year in Montana. I know they have letters of intent but if there is no drilling in Montana then there is no need for the water.

What am I missing here?

BL

[superg1] 27/3/2015 09:31

rh

That's why I mentioned it. I could see it was very bad and perhaps relevant. I left folks to do decide whether to look or not.

Certainly IOF have paid attention as they know if the rains are bad enough it can deplete the iodine in the caliche as water use is exactly how they remove it.

Then there is the matter of power cuts land slides and roads wiped out. It could disrupt them for just a few days, but it could disrupt them for weeks. We can only guess.

They say the worst in 80 years. That's the trouble with the location, heavy rain in the driest place on earth which is destructive. I would imagine transport routes local to the mines are just like a muddy soup at the moment.

[angel of the north] 27/3/2015 09:30

BBC News and video

[monkeymagic3] 27/3/2015 08:14

The economic viability of Chile is clear for all to see.

I make it an almost 12% reduction this week.

[rhwillcoll] 27/3/2015 07:43

SG - the Chile flash floods have just come up as a main item on the BBC TV news. They mentioned worst in 80 years, a number killed, and mining operations severely affected. I don't have a link right now, but surprised to have heard it on the main BBC news.

[superg1] 27/3/2015 07:37

Antofagasta have suspended mining operations temporarily due to the rain. They are in the region where some of the iodine mines are.

I would imagine the iodine mines would suffer as their Caliche would just turn into a muddy soup with that much rain.

For those interested in copper I note Anto include the mention of the Michilla mine. They had plans to close that by the end of 2015 so I wonder of they will bring it forward. Just something to monitor for those interested in Anto or copper. It's a 40,000 mt a year mine.

[superg1] 26/3/2015 21:48

bIjatlh e yImev yIDoghQo tlhIngan maH!

Believe it or not that is Klingon and it can be translated on the web. SQM use it to write out their invoices.

[serratia] 26/3/2015 21:44

Gad,

Clingon makes more sense.

[superg1] 26/3/2015 21:38

It seems to work ok other than the 'you' should be an I.

أني;ن است;را8;يج10;ة أني;ن أني;ن، أني;ن أني;ن أني;ن، سعر; الس;همš8; أني;ن أني;ن أني;ن الش;رك7; تدي;ن لي وأن;ا تجر;أ على; الا;ست9;ما85;، أني;ن أني;ن أني;ن لأن; كل ما فعل;ه هو أني;ن

[superg1] 26/3/2015 21:30

I did like the one headline. When translated it said they had been given the go ahead to pave the offices of SQM HQ. I was going to email the Fox marble CEO to see if they could do a deal.

[freshvoicem] 26/3/2015 21:19

Gad, if you know a better translation service please let me know.