Iofina Share Discussion Threads

[crosseyed] 29/3/2014 12:21

The Mini IOsorb units are aimed at high ppm sources of brine but at low flow rates.

What might those rates be (for modelling purposes)?
Would 1000 ppm at 5000 bpd be reasonable parameters? But they would indicate production of ~18 mT/month per unit. That seems high compared with the big units.

Any thoughts appreciated.

c

[1madmarky] 29/3/2014 08:20

Cyfran, you may be right about the need to move the plants every 4-5years. It's a new oil play so no one will know how it will pan out. As for the water cut, there have been many conflicting reports, some say it's static others say the water cut increases. I guess it depends on how tight the oil is held in the shale. I would have thought if it is relatively loose then it would behave like a conventional oil field and thus water cut would increase. If it is particularly tight then it would probably remain constant.
As for production per well, it does decrease over time which is why the IO plants are located at SWD sites. These have a capacity BPD. It is expensive to drill the wells so the area that feeds the SWD plant will be managed to keep it at or near capacity. The problem for IOF is that the iodine ppm will vary between these wells, hence the move towards mobile units. These should be more efficient wrt capital expenditure verses produced iodine. They would require a centralised crystallisation unit but initially an existing IO plant would be fine.
Hope that makes sense.

[naphar] 29/3/2014 08:00

Cyfran
I may have the wrong end of the stick, but I thought as oil production reduces, so water production normally increases.

[cyfran101] 29/3/2014 01:40

Quick query:

The various units we have are linked up to many different local wells and brine is delivered to that unit from their activities in fracking for shale gas.

Production from these wells typically reduces by 70% after the first year and after 5 years has dropped off 80-90%.

The indication seems to be that our units have to be increasing flexible and mobile in order to move to new cluster points to gather more brine?

I note that IOA & IOB will pursue wells that have lesser volumes but higher PPM of Iodine and that they are mobile units due to this. Sounds sensible.

I'm trying to reconcile why our business model for higher volumes is a static plant or at least the plants will take some time to shift every 4-5 years?

I must be missing something therefore someone with a little more insight provide the reason.

[naphar] 28/3/2014 23:58

Fresh, agreed on Montana not having fast. If we assume we won't hear anything for the next month, we might get a nice surprise, but I imagine they could take longer. It's not like we are on a fast track route and I guess our application is back to the bottom of the to do list

[freshvoice] 28/3/2014 23:04

I don't think there is a limit on how long the DNRC have to reply. If they approve there is a 30 day appeal period. If they refuse I believe we can challanger immediately.
I don't think Montana have a word for fast.

[monty panesar] 28/3/2014 22:11

Right now it's about producing and selling iodine. Water is nice but won't pay any bills in the next 6 months.

100mt of iodine sales this quarter will.As would production of 150mt of iodine next quarter.

[dcgray21] 28/3/2014 21:45

Ammons - spot on . IOF would appear to have responded within the 60 day window . How long DNRC take to come back is the unknown.

[ammons] 28/3/2014 21:01

Re water permit, on 3 Feb the company said:

"The Board reports that Iofina has been granted up to 60 days from the meeting date to provide clarity to its addendum, presented at the meeting alongside revised letters of intent, and address any further questions from the DNRC accordingly." The meeting date was 30 January.

Since then nothing has been said by the company about the permit until 27 March when the company said:

"On our non-core water project, the Group submitted the requested information to the Montana Department of Natural Resources and Conservation. The Group views our response as satisfying the raised objections and awaits comment from the regulatory board."

The 60 days mentioned is for IOF to reply to DNRC which they have done. I have no idea when they submitted their response or how long DNRC has to reply to it. naphar as well as several others are right in that those expecting a reply from DNRC within 60 days of 30 January have not read the announcements correctly. I made the same mistake myself at first. I view the new IOF board appointment as positive regarding water issues but it might mean that they need a heavyweight to deal with a DNRC refusal.

That said, why actually appoint a director to the board unless the company was very confident of a positive outcome? They could always employ consultants to deal with a refusal and appoint a director when they get the permit.

[woodpeckers] 28/3/2014 21:00

Good to see a bit more exposure Che, think it's time to get the word out to the industry.

[woodpeckers] 28/3/2014 20:49

Thanks naphar, just think it's important to keep feet on the ground re timings. Of course that doesn't mean that we won't get news any day.

[woodpeckers] 28/3/2014 18:56

bobby, I agree that the appointment of Bill and feedback from the company makes it very likely that we will get a satisfactory outcome to the water permit issue. As they state "the DNRC has determined that the requested amount of water is both physically and legally available and that there would be no adverse effect at the point of diversion due to the engineering and design consideration outlined in the engineering study" and they obviously feel they have satisfied further queries so it seems unlikely that they can refuse it. However, I'm not sure that we will necessarily hear anything imminently. As I understand it the 60 day period was the time limit for Iofina to respond to the DNRC. I haven't seen a timescale for the DNRC to respond in turn. Please correct me if I'm wrong.

[monty panesar] 28/3/2014 18:41

I just hope the management and Stena don't say "sod the Limeys and let's do an MBO" and trouser all those future profits for themselves. Stranger things have happened.

I want my share of the upside.

[bobbyshilling] 28/3/2014 18:10

Agree with what you are summizing there Bobsworth. Also, we have appointed an experienced water man recently.

[bobsworth] 28/3/2014 18:05

For all we know, with immediate appointment of Dr. William D. Bellamy ("Bill"), there could be a hidden agenda going on regards the delay of more plants. Knowing how revenue lucrative water is the remaining cash and future cash generated by plants 4,5,6 via increasing derivative sales might be used to quickly build a water depot + infrastructure. With depressed iodine prices this would make business sense and then when iodine prices recover switch back. The cash generated by plants 3 to 6 + water sales would then allow for faster self generating iodine plant roll out of both fixed and mobile without risk to cash flow. While building the water depot they crack on with their review of plant optimisation ready in time for next plant roll out. As richi said water sales secures funding, without going to the market. Timing wise this would fit with expected recovery of iodine price. Finally just think what two lucrative revenue streams should do the the share price!

[beeezzz] 28/3/2014 17:59

If thats the case it looks like the permits will not be awarded if we go by the performance of the SP, there is always those that know before the rest of us. I am predicting a delay.

[bobbyshilling] 28/3/2014 17:12

richi, exactly. I have been of that view all along. Hopefully, we will hear something next week as the 60 day period will be up.

[richi_rich13] 28/3/2014 17:07

For me, I don't believe for a second that the water permit is non core. In fact I would suggest that a delay in the water permit is partially behind the decision to hold back the roll out (combined with depressed iodine and delays in plants). These three factors have combined to hugely decrease projected cash flow, making it difficult to justify future expenditure at this point.

When they state non core, my personal opinion is 'disposable' and would be willing to sell part of it to finance iodine. They are fully aware how lucrative the water business is. For me (short term at least), it is arguably more exciting that the iodine business.

My point is, as is clear from the projection above these figures are transformational for the company and the delays that have occurred have indirectly impacted iodine. The permit, if awarded, will be a huge step for the company - it essentially secures funding, without going to the market.

[uppompeii] 28/3/2014 17:05

You can have a 100 plants running and half the Mississippi piped across America but this lives or dies now on good figures going forward. All other credibility is gone. Am I wrong?