Iofina Share Discussion Threads

[gadolinium] 03/7/2013 09:47

Here it is:

hxxp://minerals.usgs.gov/minerals/pubs/state/2004/okstmyb04.pdf

In 2004, Brine Electric, Inc. was founded to support the iodine industry in two ways. The first was to generate electricity by
recovering geothermal energy from subsurface brines used as feedstock for iodine production. Brine temperatures at the wellhead
were near or above 80° C (176° F). To process brine cost effectively, the temperature must range between 35° C and 40° C. Thermal
energy was lost from the feedstock brine during the cooling phase prior to iodine production. Brine Electric planned to apply
commercial technology that used the Kalina cycle to recover low-level thermal energy for power generation. Others participating in
the Brine Electric power generation project included Iochem Corp. (Oklahoma City, OK); Nathaniel Energy (Denver, CO);
Northwestern Electric Power Cooperative (Woodward, OK); and OG&E and High Plains Resource Conservation and Development
(Buffalo, OK). Plans were to develop a 1 to 2 megawatt demonstration plant near Vici, OK, during the next few years.
Brine Electric's second phase called for designing mobile ion exchange units that could extract iodine from production wells,
reinjection wells, or other spent-brine sources from current iodine producers. The basic concept was to extract iodine at remote sites,
and ship the iodine.

[gadolinium] 03/7/2013 09:38

I sort of assume from comments made by Jeff Ploen at the investor presentation that Arysta carbon filter based method failed because it was not robust enough to handle the heavily contaminated Oklahoma brine streams. Jeff emphasised the Iosorb process was able to take very dirty brine streams.

Interestingly Terry Brix's process also involved thermal recovery from the hot brines to generate electricity, which one would think offered some additional economic benefit. The process is described in WO2010033945 and also used electrochemical production of hypochlorite (HOCl not HCl macca!) from the brine stream as the iodide oxidant.

There is an additional link here which I posted some time ago.

hxxp://www.ok.gov/ocast/Public_Information/Success_Stories/Success_Stories:_Brine_Electric.html

Edit: sorry posted wrong link, this is the one I meant to post:

hxxp://minerals.usgs.gov/minerals/pubs/state/2004/okstmyb04.pdf

[maca1212] 03/7/2013 08:48

superg,

I hate to be controversial, but given that:

1) The iodine adsorption test is a standard method for measuring the efficiency of adsorption in activated carbon (100% efficiency in adsorpion is just a matter of how good/deep/well formed your filtration system is and how you handle 'breakthrough').
2) Ion exchange capture on basic resins has been around for yonks and can provide similar efficiencies to those quoted.

I find it difficult to believe that this is a really difficult area of industrial chemistry. Various other companies have done it over time (and on oilfield brines) - only ceasing when the production of iodine became uneconomic.

I fail to see what the difficulties could be - failing to filter and condition the input brine? Oil and solids filtering is a well trodden path, even electrochemical production of HCI from the brine stream is, I believe, prior art.

Brine elecric had been around since 2004, and Terry Brix has enough of a pedigree in the industry (senior positions at Iochem) that it would be unlikely that Arysta would be embarrassed by the tech.

Far more likely that the desire to keep the iodomethane debacle off the radar (as it significantly impacts/impacted expected US/Global iodine demand) drove the convenient lack of mention of whose plant it was.

Perhaps someone with direct experience or a chemical background would care to comment.

M

P.S. Brine Electric's business plan as outlined on the third page of this publication from 2004/5 is also of interest, Apologies if this has already been discussed:

hxxp://minerals.usgs.gov/minerals/pubs/state/2004/okstmyb04.pdf

[superg1] 03/7/2013 08:01

Dc

Arysta didn't really want everyone knowing about the failure, so they were not named in the rns.

I tried dropping a few hints about who it was, and who they got the site off but it fell on deaf ears on the lse site as extremely unlikely due to the pedigree of Arysta.

Iodine production is a difficult game to master, that's why it took IOF a few years, but now they have mastered it to a level which is near impossible to beat.

Up to 98% yields so far, without all the nasty emissions others have.

In time, the iodine production world will realise, one has and is probably looking very closely re how io2 performs and when io3 and 4 appear.

As Lance said they expect to ping on the radar in a big way in Q3.

In the iodine world if you pop your head above the parapet, certain big players react. One I had missed, until recently.

[dcgray21] 03/7/2013 07:39

Many thanks M and SG1 for prompt and as ever informative replies

[superg1] 03/7/2013 07:07

Brine electric/Arysta was supposed to be a bit of an exciting event where Arysta were invited to produce Iodine in Oklahoma instead of Chile.

It was displayed as a great success story-:




Trouble was that Arysta methods were not great and they were making a loss on iodine production.

Producing iodine is not easy, and the Arysta methods failing on in the best brine spot anywhere just shows how good IOF's tech is.

[maca1212] 02/7/2013 23:27

DCG,

Arysta lifescience subsumed them and then IOF acquired their facility (and a few of their staff), apparently their technology didn't work very well.

However, I suspect that Arysta's exit from iodine extraction was rather accelerated by the embarrassing iodomethane / methyl iodide soil fumigant (MIDAS) episode with the EPA and Californian regulators and various environmental lobby groups that covered neither the company or the regulators in glory and led to its agreeing to withdraw MIDAS product completely from the US in 2012.

M

Edit: just found the biog of Terry Brix who was prime mover behind brine electric here hxxp://www.s2gbiochem.com/about_leadership.html - perhaps their tech was not so bad......

[dcgray21] 02/7/2013 22:30

Does anyone know what became of a company called Brine Electric ? Apologies if this may have been covered a while back in earlier postings

[pcjoe] 02/7/2013 20:35

Rug - your findings re produced water reduction over the life time of the typical well matches that of Maca - Just wondering if there is scope for natural replenishment of the brine reservoir on completion of commercial O&G exploitation & if so, over what kind of time scale? - Still trying to see if there is any benefit in assuming ownership of old wells for future brine exploitation

[monts12] 02/7/2013 19:35

Sorry for double post, did it to move away from the miniaturising of font due to some one posting extremely long web links (please use tinyurl.com)

Taken from First Columbus Company Note (May 2013) Target Price 239p

Compared to major producer's opex of $20-40/kg, Iofina's solution is significantly more profitable, even at lower prices, and should enable the Company to incrementally add additional plants, and hence capacity without the need for dilutive fund raising.
Iofina Chemical manufactures a range of specialty iodine derivatives, utilising the iodine produced by Iofina to create commercial products, and, if able to scale to meet the increased raw material supply, should enable Iofina to extract further value from its produced raw iodine.
With two sites now live Iofina intend to rollout one new site per quarter, but supplemented by mobile units and a change in plant manufacturing processes, Iofina has the potential to spread its footprint more rapidly and more cheaply in its core areas.
Financials and Valuation
Despite a very strong share price performance over the past 12 months (+376%) we believe further upside still exists. With the success of IO#1 and IO#2, Iofina has now proven its technology and business model and is now focussed on expanding production significantly across a number of sites in the coming years.
Our DCF derived target price of 239p assumes Iofina will have 17 producing sites by the end of 2016 (or 1,941mt of production in 2016), having completed the rollout of one site per quarter. In our view we have remained conservative in our expectations around iodine prices, site operating metrics and site rollout, believing that there is significant potential for our target to scale further as milestones are reached.
Non-core Atlantis assets could provide further upside to our target
We do not include the potential earnings from Iofina's non-core Atlantis prospect in our valuation but note that successful execution of the industrial water project could provide a material revenue stream and further upside.
Alongside the potential sale of deep shale rights on its 290,000 Atlantis acreage, Iofina is pursuing industrial water rights in North Dakota and Montana. An application for beneficial use has been filed in Montana and if successful (Q3 2013) will enable Iofina to produce upto 200,000bpd (75,000bd initially) of water at an operating margin of as high as $0.90 per barrel. A similar filing is expected to be announced in North Dakota in the coming months.

[monts12] 02/7/2013 19:34

Taken from First Columbus Company Note (May 2013) Target Price 239p

Compared to major producer's opex of $20-40/kg, Iofina's solution is significantly more profitable, even at lower prices, and should enable the Company to incrementally add additional plants, and hence capacity without the need for dilutive fund raising.
Iofina Chemical manufactures a range of specialty iodine derivatives, utilising the iodine produced by Iofina to create commercial products, and, if able to scale to meet the increased raw material supply, should enable Iofina to extract further value from its produced raw iodine.
With two sites now live Iofina intend to rollout one new site per quarter, but supplemented by mobile units and a change in plant manufacturing processes, Iofina has the potential to spread its footprint more rapidly and more cheaply in its core areas.
Financials and Valuation
Despite a very strong share price performance over the past 12 months (+376%) we believe further upside still exists. With the success of IO#1 and IO#2, Iofina has now proven its technology and business model and is now focussed on expanding production significantly across a number of sites in the coming years.
Our DCF derived target price of 239p assumes Iofina will have 17 producing sites by the end of 2016 (or 1,941mt of production in 2016), having completed the rollout of one site per quarter. In our view we have remained conservative in our expectations around iodine prices, site operating metrics and site rollout, believing that there is significant potential for our target to scale further as milestones are reached.
Non-core Atlantis assets could provide further upside to our target
We do not include the potential earnings from Iofina's non-core Atlantis prospect in our valuation but note that successful execution of the industrial water project could provide a material revenue stream and further upside.
Alongside the potential sale of deep shale rights on its 290,000 Atlantis acreage, Iofina is pursuing industrial water rights in North Dakota and Montana. An application for beneficial use has been filed in Montana and if successful (Q3 2013) will enable Iofina to produce upto 200,000bpd (75,000bd initially) of water at an operating margin of as high as $0.90 per barrel. A similar filing is expected to be announced in North Dakota in the coming months.

[maca1212] 02/7/2013 18:58

writz,

I stand corrected.

M

[writz] 02/7/2013 18:20

Maca, that's an interesting comparison with DOW in California. As I understand it, they moved away not so much because of supply chain unpredictability but because the brine concentrations had dwindled over the 30 years they were there, and in Michigan they could integrate the operation with other mineral recovery lines and achieve economies of scale. See:

[maca1212] 02/7/2013 17:22

nellyb,

The water looks lovely and there are lots of people splashing about having fun, but I'm still looking for sharks I'm afraid.

The basic premise is sound and I'm sure the tech works as advertised (although TBF I'm a little sceptical as to how 'revolutionary' it is - their previous patents have been fairly derivative of prior art IMO), but that's a side show - patents are as patents do.

What has still to be proven from my perspective is whether they can really make the mid stream model work and sell the output at world class levels. If they had progressed as originally guided I'd probably be on board, but failure to validate just has me turning over more stones looking for something nasty underneath. Not convinced that the business model is as 'simple' as it appears, and the large short position tells me that there are a bunch of people out there betting on a banana skin at some point prior to commercial validation.

Dow had a very similar business model in California, except they paid Oilies to deliver up their brine by pipeline / truck and disposed of it. Ended up finding that was too unpredictable and migrated to much lower ppm brines in Michigan because of better co-product opportunities (and I suspect better control over the supply chain).

M

[superg1] 02/7/2013 17:22

A bit about the relevant area IOF are in, you can see form the picture how close rigs are to each other in the OK area.

[roboben] 02/7/2013 17:14

someuwin

I've just got off the phone with IG Index to confirm their margin requirements for IOF. They are -

Up to £500 per point 25%
Up to £2000 pp 40%
Up to £4000 pp 50%
Beyond £4000 pp 75%

If you're being asked for 75% you're out of my league!

[engelo] 02/7/2013 17:07

Fwiw: "Abraxas Petroleum Corp., the San Antonio-based oil and gas exploration and production company, will lower its drilling costs in the Bakken through increased drilling crew efficiencies and multi-well pad practices. The company's first two wells in the Bakken, the Raven 2H and 3H, will be completed simultaneously this month, according to Bob Watson, Abraxas president and CEO, instead of individual completions a month apart for each well. The decision, he said, will lead to cost savings. Raven Drilling LLC, the wholly-owned subsidiary of Abraxas, utilizes a multi-well pad drilling system that decreases rig mobilization costs and also utilizes the same mud system for multiple wells.

According to Geoff King, vice president and CFO for the company, the crew has worked through the learning curve of drilling in the Bakken shale with a multi-well pad system."

[maca1212] 02/7/2013 17:04

LOL,

Truce, Midstates still have only 5 rigs though, read their presentation here:



M