Iofina Share Discussion Threads

[shonny] 10/3/2014 09:11

Another down day coming up here. Fridays euphoric rise rapidly evaporated as I predicted. This share price isn't going anywhere except down regardless of the deluded rampers pie in the sky prophesies.

[meadow2] 10/3/2014 09:06

17th December, 2013 Review and Outlook.

"The planned mobile unit's conceptual design is being finalised and the Company is planning to seek turnkey contracts for construction shortly. The number and location of these mobile plants is under evaluation."

Perhaps an RNS re: mobile units might be coming soon! Now that finance has been sorted there should be little delay.

[che7win] 10/3/2014 07:43

Bobsworth,
Mobile units make sense because they can target high PPM sites and wouldn't be subject to disruption the same as the multiple tied in SWDS.

So productivity would be a lot more predictable to me.

That and the fact that some sites have PPM iodine concentrations higher than anything I've heard mentioned on these boards....I would be getting them out there as fast as possible.

[cordone] 09/3/2014 23:03

Cracking stuff sg1.

It can't be long before we get water news....

[bobsworth] 09/3/2014 23:01

Magpie99

To lower expectations with the rollout of their patently unique plant technology so as not to disappoint the market and hopefully over achieve with new developments.

e.g. Rollout of their low capex/opex mobile plants that can quickly target high ppm iodine sites

[magpie99] 09/3/2014 22:44

Why only 3 plants being built this year ? ( additional to those that were supposed to be built last year)


Water is a welcome distraction/sideline to many from this potentially worrying fact.

[bobsworth] 09/3/2014 22:33

Yes good post as ever SG1

Shame the market is so clueless on this significant non core asset which is going to be in increasing demand as the USA frack their way to energy self sufficiency.

Fingers crossed those land leases begin to pay dividends soon.

[rogerbridge] 09/3/2014 20:38

Excellent explanation SG.

[woodpeckers] 09/3/2014 18:41

Agreed, it's posts like that which show the time and effort you have put into understanding the true value of Iofina.
Many thanks for sharing.

[howtofish] 09/3/2014 12:55

Superg1,
Just to thank you for bothering to put such an extensive post on the water issue. Really extremely helpful to those of us who knew water was valuable, but didn't have the detailed analysis.

[freshvoice] 09/3/2014 12:09

So maybe it's not a question of using the water, more making sure no one else can and therefore increasing value of other water we already have.
Sounds good to me, but not a quick cash flow.

[superg1] 09/3/2014 11:35

The topic was mentioned. I have no idea if it would become a reality but IOF gained the discharge permit for that very reason.

The gas price drop and third party brine agreements had them going in a different direction re the iodine.

Now this is a very important point that the market probably isn't aware of. IF Arysta had continued as they were, there would be no 3rd party agreements. Arysta imo messed up big time and didn't realise the value of their patent. As they couldn't make their tech commercially viable they gave it up as worthless it seems. Getting the Arysta site and patents was a massive step, but I don't think most realise that without that, there would be no IOF 3rd party agreements now.

The plan at Atlantis was iodine, with gas to offset costs, and the discharge of water into rivers to sell to customers downstream. That potential still exists, but the first priority is iodine.

I discussed that discharge permit. Apparently lawyers said it would be impossible to achieve (probably because they are unheard of), so the IOF team ignored them and went after it themselves and achieved the impossible. It's 30k bpd simply to fit the anticipated amount of use by the Montana iodine plant. So effectively in the US terms it's a water storage right, I.E you own the water you put in and can take it out elsewhere.

BUT, the first step IOF have taken is to go for water rights in the normal way, which is the matter in play now. Why clean up and discharge your own water, when you can simply apply to remove water from a river.

That is twofold, as it potentially gains IOF water rights, and in doing so it chips away at the amount the relevant water bureaus have as their cut off limit. Bob Shaver a year or two back is quoted as saying that over the next few years he expects rights to be fully appropriated. Each bureau will have a limit to what it will allow re extraction, when that's done, no more rights will be issued.

At that point IOF have the USFW rights swap to consider, AND the direct supply of water via the rivers from Atlantis.

Should rights be fully appropriated in Montana and ND, then the water discharge permit, will for those that know it exists, become a very valuable asset, especially if the water demand is not met.

Recently folk have spoken of the lack of infrastructure which means the bakken oil is sold at a discount, and it is said to stall the expansion. Measures are now being taken to solve that issue as in that recent link.

But what about water? Tech may change in the future, but the recent topics I can see relate to water flooding, which is about pumping water into the levels via others wells to create pressure to force oil out.

So for now the future of that looks like it's to do with fresh water in that area. If we go by the comment of Bob Shaver.

'There's plenty to supply the oil companies for now, says Bob Shaver, director of the water appropriations division for the Water Commission, which monitors the state's aquifers and regulates all surface and groundwater withdrawals. The best estimate for oil-field use is about 3 billion gallons, based on last year's activity, with demand projected to double over the next decade. But it's only a matter of time before the state's water is fully appropriated, he says, and any new use will have noticeable effects. That day is nearing as the oil rush drives population growth in rural areas with little infrastructure, further straining water supplies. McKenzie County, in the heart of the boom, has grown 20 percent in two years.'

Each new depot draws more opposition from neighbors and other interests, Shaver says, highlighting the resource's increasing value -- and scarcity. "To me, water is going to be the oil of the 21st century."

His 3 billion gallons estimate turned out to be 5 billion. But daily water maintenance of wells (salt removal) features now too.

Much of the current supply comes from aquifers, that is commented on too.
'In many places, the nearest water is 1,000 feet down in a large aquifer that flows freely to the surface in low-lying areas. But it recharges slowly, and the level at which it flows without pumping is dropping more than a foot per year from overuse. Meanwhile, most of the fracking water comes from a series of smaller, shallower aquifers, some of which are already stretched to meet drinking and irrigation needs.'

Halliburton in a recent presentation on water commented that they expected rights for ground water to fail going forward.

The water permit and rights is a bonus, but should the demand go up (expected) and rights fully appropriated (expected) then that discharge permit becomes a golden nugget. Yes someone else could feasibly acquire acreage capturing part of the aquifer etc etc. BUT it took IOF years to jump through all the hoops to get the permit, a mission lawyers said was impossible.

So a free jam tomorrow potential event, should a set of circumstances arise in the Bakken area, and for now it seems likely. What value would be put on such a matter if rights end up fully appropriated. Best to know about it, as if those circs arrive us guys know who is sitting on a gem, that no-one else has, or could achieve.

I also recall reading that the Fresno reservoir has a 500k bpd storage capacity. I.E. someone could put 500k bpd into it if they had the ability. That's a big capacity and covers over 7.5 billion gallons per year.

Then we see there is talk of a water tax for providing water, the corps who 'own' the surface water have been going on about it.

Potential water discharged by IOF is owned by IOF, the discharge permit is a storage right, IOF or someone they choose could take the water out downstream. The Fresno water sea exit point if the gulf of Mexico.

None of the above covers the short term view of course. IOF need to sort the core business. But you can imagine if they did have a big pot of cash, then they would have some lucrative aspects to spend it on. All down to feasibility and economics re the above, but the first step has been an application for water rights and the bigger permit they can get hastens the arrival of rights being fully appropriated.

[meadow2] 09/3/2014 10:09

superg1 - The permit you mention was issued in May, 2010. Have you any idea why the process has not been mentioned since or what benefit has been reaped by Iofina during then and now?

[freshvoicem] 08/3/2014 21:48

Superg
'which may not necessarily be that far off.'
Is that research, guesswork, expectation or hope?

[superg1] 08/3/2014 21:26

It's easier to read it, they would sell the gas.

www.iofina.com/perch/resources/waterdischargefinal.pdf

The permit was to fit a 30k bpd plant it would seem.

[superg1] 08/3/2014 21:12

Meadow that was a split deal

$5m for one and $10m for the other.

One being for the revenue split on water supplied and the other a 50% share of Atlantis rights. $15m total.

The fact remains that if 10% of the aquifer can be recovered that's 3.5 billion barrels of water.

Look at the Iofina pictures, it just proves how little contaminates it has it it, as they are happily spraying the raw produced water over the land around the well, and lighting the escaping gas.

It's the hidden value the market hasn't got a grip of yet, and it's made possible by the discharge permit. On top of that, if oil activity migrates near to IOF then it would seem that produced water could be used untreated for fracking.

Taking the $10m offered for 50% 3.5 billion barrels potential production.

That works out at 0.6 cents per barrel (for 50%) which is a bit of a bargain, to say the least, considering what could happen in the bakken.

Costs for sewater desalination are around 10 to 15 cents pb, but Atlantis water has 5 times less salt.

IOF can already discharge 30k bpd into the river systems and would own that water. They could up the discharge permit, no problem imo as I read somewhere that the Fresno reservoir has a 500k bpd storage capacity.

That aquifer and discharge permit is one hell of a bonus/advantage to any company downstream in the oil sector, especially if restrictions kick in and water rights become fully appropriate. That's a stonking jam tomorrow addition and that alone could be a lot closer than other shares have as there only trick.

IOF are not paying lease holding fees on 300k acres for the fun of it.

Thanks for the reminder of the hidden value of the longer term assets, which may not necessarily be that far off.

[meadow2] 08/3/2014 18:55

Bobsworth - Re joint venture, wasn't the earlier, withdrawn, agreement with Haliburton that $15 million would be given to Iofina? I'm sure that sg would be able to enlighten us.

[naphar] 08/3/2014 18:31

Ammons
I can't say for sure, just picked up on things like not having done routine clean downs (to see how far things could be pushed), which then caused issues requiring significantly more down time last year. That may well be the reason for the delayed shipment from 2013 to 2014.

There are other bits I have heard whispers about but don't want to comment on, as again I just cannot be sure.

Even if they have made no bad decisions, I am still not convinced Lance was over promising based on his capabilities and what he delivered in 2012. I honestly believe that if he had remained at the helm, he would have delivered more than what transpired. Maybe we would not have had IO1-6 running by end Dec 2013, but I am convinced we would have seen more progress than we did.

What I really don't think was effective was the interim CEO solution. Running a business in US from UK can't be easy or effective.

Again, just my opinion.

[che7win] 08/3/2014 18:18

Bobsworth,
I don't know.

[ammons] 08/3/2014 17:47

Thanks for that SG1. Maca1212 has unearthed some interesting snippets on the other thread which must have taken quite some time for him (or someone else on his behalf) to dig and find. I asked him about why he spends so much time and effort doing this re a share he has no interest in (unless he is short). Genuine question, asked twice. The research must, very clearly IMHO, taken a while to do. Why not do it for a share you are going to buy? I did not get an answer though he did respond to a question that I had actually asked someone else, not him.

Seems I am somewhat naïve. I thought I would get an honest answer but the fact that I didn't speaks volumes I think.

naphar, what "bad" decisions do you think the current management has made?

[bobsworth] 08/3/2014 17:43

che7win

I hope your right. Out of interest if there was a joint venture over it what sort of terms could we expect.

[superg1] 08/3/2014 16:44

Looks like they looked at Macca's recent post and decided to help the Bakken oil situation.

If I was Hurricane I'd be in Bachman Turner Overdrive lyric chuntering.

'You ain't seen nothing yet' 'taking care of business' :-)

[che7win] 08/3/2014 16:35

I expect water news in the next month, it's non-core so I expect a joint venture over it.

Apparently, there is a lot of interest in the project.

[naphar] 08/3/2014 15:34

Upp
that depends on whether you think the latter is really the case, I am still more inclined to think that interim management before appointment of current management was just not suitable, and that current management made some bad decisions. Just my take, and I am not sure we will ever know for sure.
Either way, moving forward yesterday's news has to be a positive step.

[uppompeii] 08/3/2014 14:08

Thanks for the replies, yes I agree it should be looked at as a positive at this point in time going forward but also as ammons states a failure too down to past management over expectation.
Clearly the former is of more importance than the latter as that is now history.