Iofina Share Discussion Threads

[writz] 03/8/2013 18:03

Bogg1e, thanks for the Nexus link. I spent a couple of hours researching the shale boom this afternoon. The chickens do seem to be coming home to roost with unseemly haste on that much-hyped 100 years of US oil independence. And, doh, once again it's the bankers in the dock. (The (?)Barclays commercial where that voiceover talks wistfully about "good old banks" makes me want to chuck a brick at the TV.) Operationally, though, even the worst forecasts are for 10-23 years of commercial success with shale oil/gas, and IOF are very much on the front end of it. It's significant, I think, that the patent makes such extensive use of the word "embodiments", as clearly IOF's whole approach is to adapt the IOsorb tech to as many source conditions as they foresee arising. Arrangements may eventually change for sourcing the brine, but there are now hundreds of wells in IOF's most prospective areas that weren't there ten years ago.

[noli] 03/8/2013 16:51

Engelo, very true on brine temp, however the old wets were at 60% yields if i remember correctly, i would be happy with that if all the brine is in one place and no delays to stop production. It might even be possible for iof to buy these shut in wells should it be worth it, they are no good to anyone else, lol

[engelo] 03/8/2013 16:46

noli, pcjoe: thanks for this perspective. The more you look into this, IOF's potential iodine sources seem limitless. Put that together with the patent which locks out the competition and that amounts to decades of growing as fast as IOF choose to.

A minor point is brine temperature: presumably fresh brine wins over old SWDs here, as well as no need to pump.

[noli] 03/8/2013 16:25

PC, i asked many months ago if IOF could take brine from SWD wells, iof were considering it. So it wouldn't surprise me if that happend going forward. IOF are now putting in place different units for different brine conditions so might we see one for sucking up brine rather than the other way around. There must be loads of swds around that are shut in/closed off etc.

[bogg1e] 03/8/2013 12:39

Monty....and incur extra costs, complexity and risk of course. The due diligence would have to weigh heavily in IOF's favour before it would be worth doing. One of the reasons why IOF is so compelling is the transparency and simplicity of their business model, adding an "exploration" side to the business would muddy the waters somewhat in terms of the finances involved and perceived risk.

PCJoe interesting, thanks.

[pcjoe] 03/8/2013 12:37

Been through that one Monty - Not impossible but very expensive option drilling & fracking new wells for iodine rich brine - Possibly not economically feasible & not to mention complications re O&G ownership etc - Under IOFs iodine leases thay are however allowed to do this - The company has confirmed all the foregoing in comms

There is an alternative (my own idea at this time) - Played out commercial O&G wells may still have significant amount of Iodine rich brine contained therein - There is some evidence that these wells may replenish from surrounding brine reservoir themselves after O&G use, due to high permeability of the strata in many MISS LIME areas - I read this online somewhere - No one too sure re time scales for this though - all very new

The Miss lime strata is full of water - I reckon that these old wells & their existing infra/under structure etc might just prove to be very valuable in the future & possibly very cheap to pick up - It is likely that if they are on High ppm that Iofina will have the leases already sewn up - The cost of operating the wells should be offset by lower or non existant third party JV oilie costs

Watch this space........

[monty panesar] 03/8/2013 12:07

Business sense suggests IOF with surplus cash generated in 2014 should consider sinking their own iodine wells in the hyper concentration areas of the Woodward Trench. Would reduce third party dependence.

[engelo] 03/8/2013 11:51

Help please:

According to my memory a couple of months ago info came through that IO2 was being considered for local production of methyl iodide.

I exchanged a few posts about the chemical processes that could be used leaving no waste problems, including the use of hydrazine.

I've now looked hard and can find no evidence for any of this. Did I just dream it?

[pcjoe] 03/8/2013 11:09

"First Columbus" note Summary

Estimated Iodine production for 2014 - 820T

Estimated EPS for 2014 - 9.93P

Target price - 239P

Inferred P/E from the above - 25

THE UPSIDE that they mention :-

Run rate exiting Dec 2013 - (800 - 1200T - Surely?)

Run rate exiting Dec 2014 - my figure but reasonable at 3300T? ( All 2013 plant optimised, mini units, new unit production)

3300T run rate divided by originally estimated production of 820T = 4

4 x Estimated target price as per above of 239P =

SP of £9.56 on forward P/E of 25 at end of December 2014

Not a lot of downside here methinks - Just got to get these units up & running.............

EDIT

Excluding water, oil, helium etc etc

[the librarian] 03/8/2013 10:38

Still hard to believe that the water is such a simple start up business, all of your 'stock' for free and it's a very desirable commodity.

[superg1] 03/8/2013 09:32

First Columbus seem to have a good understanding of the business overall, they amit their 130my generic plants could be well under the potential (which is true).

On the water, they talk of 1 dollar pb. We don't yet know if IOF will have all hot or cold water at that depot, or a mix etc.

Hot would carry a price 5 dollars pb plus the current going rate. Prices are subject to proximity to a customers need etc.

So 80k per day on cold is probably a baseline. I heard 1 to 1.60 for cold water in Montana for well placed depots.

That 80k per day for one depot, isn't far off what they would get for the original 200k per day JV, as they were to get half I'd 60 cents to 1dollar pb back then.

Further plans are for more depots of course.

A wildcard FC call it or a free carry as we call it. Depot/revenue set to kick in next year.
However if the permit arrives in good time prior to that, I can think of a way to gain revenues from the permit without a depot.

I'm not sure they would do that or if it's possible. Simply have a short term deal with another firm/depot where they sell your water and get a cut of the cash.

Just me speculating there, but land owners have been selling off their water rights in recent times, on a temp basis. I doubt all build a depot.

[madchick] 03/8/2013 09:27

So, now they have a patent that stops anyone else coming in, is it OK for them now to show up on the radar?

Or is that the leases are price sensitive and they want to get them tied up before showing how much they are actually worth to them?

[superg1] 03/8/2013 09:16

Gad

I have double checked re that patent, and it literally covers the business model.

Ie say company x comes up with iodine tech in 3 years and does a deal with a.n. other on their disposal sites, to add in an iodine plant.

That would breach Iof's patent. The basic Us cost involved re legal action of the breach starts at 3 times whatever the rogue plant is making in profits. In other words no one will bother.

The fact is though no one will bother and in any case no one has suitable tech for the US anyway.

IOF had been tying up the best brines, but now effectively all are tied up, so now and Guys only have IOF as an option.

Obviously such tech is new to them anyway, and they are happy to have some free cash and an extra oil loss warning system.

I suspect the expanded deal mentioned is to do with Chesapeake, I know Chesapeake are keen on getting plants on their sites.

[writz] 03/8/2013 09:08

noli - that makes sense. Seemed too good to be true!

[iof multibagger] 03/8/2013 09:04

retiree every time 30 hits on the rsi it`s usually followed by a very good rise
in the share price. fantastic entry point for the longterm imho

[iof multibagger] 03/8/2013 08:57

retiree.. maybe tuesday for 1.70p £4 target end of year if they can get 5 plants
running

[noli] 03/8/2013 08:02

They will have got the wrong end of the stick with that comment as its referring to the Atlantis Field.

[writz] 03/8/2013 07:59

diggulden - re "The by-product is water clean enough to return to rivers" - where is the source for that? If that is the case, it seems to me (a) the process can or does remove more than iodine from the water (if so, what is the disposal method, and do the other extracted chemicals have any value?) and (b) the technology, now patented, could be leased out to the oil industry as a way of avoiding avoiding expensive underground disposal.

[diggulden] 02/8/2013 22:47

Iofina's [LON:IOF] award of a US patent for its IOSorb technology has given the stock a 5% kick in the right direction.

It effectively protects its modern day form of alchemy – turning brine taken from oil and gas wells and turning it into iodine. The by-product is water clean enough to return to rivers.

In the States, the group is rolling out plants close to shale oil and gas projects, which points to Iofina's massive upside.

"We see Iofina as a potential beneficiary of the shale oil and gas boom in the US with new opportunity to roll out its iodine recovery technology overseas," said boutique broker share price Angel.

"Patent applications have also been filed in Chile and Japan."

First Columbus Research, meanwhile, rates the stock 'buy' with a 239 pence share price target.

It added: "With the $15m convertible raise completed earlier in the year, alongside quick plant payback periods, Iofina has the financial resources to scale production and spread its footprint in the coming years."

At 11:20am: Iofina share price was up 6.38 pence at 145.88 pence.

[pcjoe] 02/8/2013 22:29

Out of interest is any of the "Sharp end" of claim 24 - see below - patentable by IOF?

"a pH controller that acidifies brine received from the head tank to a desired acidity; an oxidizer that converts iodide in the acidified brine to molecular iodine; at least one activated carbon contactor module removably inserted into a stream of oxidized brine provided by the oxidizer, wherein the at least one activated carbon contactor module binds the molecular iodine to form the iodine complex;"

[noli] 02/8/2013 22:17

Napher, i put the towers down as June and July as i dont know when they ordered them, it would have been imho when the company informed iof that a 60 day time frame was in place for x amount of time. For all we know it may not come into force until later in the year hence the tower order.

The above is my timeframe i work on, it helps me work out the mt month by month.

As for why i thimk they have ordered 2 is as per the rns: An additional set of titanium towers have also been ordered and are currently being fabricated.

The use of the word (Towers)maybe their is 2 in a set, i dont know.

[gadolinium] 02/8/2013 22:14

Macca,

It's not that they have patented oil wells etc. as such, it's more the totality of bringing all of the modules listed in claims 1 and 24 together in one overal1 operation.

Claim 1. A modular system for recovering iodine from an aqueous brine, comprising: an oil well for producing a flow of aqueous brine; a pipe connected to the oil well for carrying the flow of aqueous brine; a head tank connected to the pipe to receive a portion of the flow of aqueous brine passing through the pipe; a bypass mechanism disposed in the pipe to permit the head tank to capture said portion of the flow of aqueous brine passing through the pipe; a pH controller that acidifies brine received from the head tank to a desired acidity; an oxidizer that converts iodide in the acidified brine to elemental iodine; and at least one activated carbon contactor module removably inserted into a stream of oxidized brine provided by the oxidizer, wherein the at least one activated carbon contactor module binds the molecular iodine to form an iodine complex.


Claim 24. A mobile modular iodine recovery system for producing an iodine complex from an aqueous brine containing iodide proximate to an oilfield, comprising: an oil well for producing a flow of aqueous brine; a pipe connected to the oil well for carrying the flow of aqueous brine; a head tank connected to the pipe to receive a portion of the flow of aqueous brine passing through the pipe; a bypass mechanism disposed in the pipe to permit the head tank to capture said portion of the flow of aqueous brine passing through the pipe; a pH controller that acidifies brine received from the head tank to a desired acidity; an oxidizer that converts iodide in the acidified brine to molecular iodine; at least one activated carbon contactor module removably inserted into a stream of oxidized brine provided by the oxidizer, wherein the at least one activated carbon contactor module binds the molecular iodine to form the iodine complex; and one or more transportable containers for housing the head tank, the pH controller and the oxidizer, wherein the one or more transportable containers include an inflow port for coupling the head tank to a flow of brine from the oilfield and a second port for returning iodide-depleted brine through a re-injection well of the oilfield.

[worraps] 02/8/2013 22:09

sandbag

On the LSE website.