Iofina Share Discussion Threads

[testuser123] 01/7/2013 13:51

Yeah, that's the one I was talking about. There's plenty of trades either side of it at over 147 so it just seems a bit wierd that whoever it was chose to put an offer on at 145 rather than fill some bids at 147 (which must have existed because that's what all the AT trades afterwards filled). Ho hum, I guess even if it is stop fishing it means there's someone out there looking to accumilate.

[freshvoice] 01/7/2013 13:45

Retiree
Note on your l2 post at 13.18 there are no names othe offer column?

[superg1] 01/7/2013 13:41

Maca

when Sandridge have swd's in play and plans for 116 sites, it starts to put it into perspective.

Pre boom OK had over 1.2 billion bpd of brine being injected. That is going to rocket with the drilling frenzy. that figure is from 2007 and with the new drilling it's going to double in quick time.

From mid-states presentations you can see they have a lot of brine from wells.

Mush of the research comes from viewing O and G presentations.

If you look at who IOF are with on contracts. Then IOF have around 3 million acres covered in the best area.

[testuser123] 01/7/2013 13:36

Hi Retiree,

Out of curiousity, I don't suppose you were watching L2 around 12:12 were you. I'm not normally one to make accusations of instis fishing for stops etc but it looks like 10k was stuck on the offer at 145 when all the other trades were going through over 147, which stood out to me as looking a bit dodgy. Not got L2 myself so unable to confirm what things were looking like at the time.

[pcjoe] 01/7/2013 13:16

Sound Maca - Always a place for positive enquiry on a BB like this

[maca1212] 01/7/2013 12:55

SG,

The oilers seek to get brine disposal costs down in a number of ways, the most obvious way to do this is to drill wells that are less 'wet' (i.e. a higher oil and gas 'cut').

Over time with improved subsurface modelling and fracking techniques this is most likely what will happen.

However having said that, with the exploration and extraction activity going on and planned, there still exists an enormous opportunity for IOF.

What we are discussing here is not the fact that such an opportunity exists, but about how valuable it will be for how long and at what point IOF's midstream business model is validated (i.e. becomes a real rather than theoretical moneyspinner).

For a company that wants to apparently stay under the radar they have a rather unusual way of maintaining a low profile in most of their strategies, and I find that slightly worrying - particularly when the strategies in question are so easily superseded.

M

P.S. pcjoe, don't sweat it, I sometimes have difficulty with understanding what I have just written myself. No p-take intended. As for contribution I would hope I have contributed to a degree of debate, I am still considering this actively, otherwise I wouldn't post here.

[pcjoe] 01/7/2013 12:55

Nope Maca - read & registered your initial research as an "apparently" but missed your correction - Dont worry about it - we all post errors & get things wrong sometimes - Going out on a limb is a positive thing in my book - Only those with nothing to contribute would denigrate such posts which always provoke discussion, thought & deeper understanding as a consequence

[superg1] 01/7/2013 12:34

It's got me head scratching about what they would be harvesting at this time of year.

Maca

the fact is they just had a conference on produced water for the area, and they seek to get costs down re brine disposal.

Iof in that regard helps the position.

Those involved already have disposal sites set up to receive 60k bpd in many cases.

If having a deal reduces diposal, day by 5 cents pb on a 25 cents disposal rate, they'll want it.

Take the green bags for the garden waste, would you be happier if someone else took them and paid you a bit for the pleasure of letting them do it.

Plus the insurance that they check the contents to make sure your ring or watch hadn't fallen in while you were doing it.

The fact is the and G guys want it, as in the gas downturn they sought ways to reduce costs.

The Miss play is far cheaper to drill than the Bakken and with the best well doing 3000bpd (longhurst 1), it's clearly lucrative.

27 rigs within sight of io2 says it all, re the activity

[pcjoe] 01/7/2013 12:28

Hi Maca - Found the source of the "apparently" increasing produced water theorey - Unfortunately it appears to have been yourself - From your recent post

"Despite my earlier research indicating that water output increases over time it would appear that, at least for horizontal wells in the miss lime formation, that is not the case."

Thats that mystery solved then......

[uppompeii] 01/7/2013 12:23

Yes, I remember that Super, lol, there's detail and there's detail! I'm just surprised no one bothered researching what crop it was.

[maca1212] 01/7/2013 12:07

sg,

I agree, there are distinct advantages to the mid stream extraction model, as for the O&G companies doing 'naff all' my expectation would be that the O&G companies will do 'naff all' if they are not getting significant earnings from the brine stream.

I am sure that mid states value the relationship with IOF, of all the producers they are:

1) In the right area - with potentially high ppm content.
2) Have a centralized SWD strategy - as discussed their 315kbpd disposal capacity across only 5 disposal wells is the ideal scenario for iof.

Indeed this model should work well for both, the question in my mind is whether the $10-15 per kilo cost of production contains the following:

1) Adequate 'incentive' for mid states to actively route high ppm brine content to IOF.
2) Plant relocation costs should the distance to the current SWD disposal wells render them uneconomic / non-viable.

I would also point out that I did not raise the spectre of these horizontally fracked wells increasing brine production over time to IOF's benefit, that was someone else.

In my experience there is no such thing as 'money for nothing', the current brine fettling/changeover process at io#2 might be a one off or it may (and in fact is likely to be) a regular occurrence, in fact previous exchanges on here have infered such and that the 'changeover' to 'new brine streams' was a positive rather than a negative. On that point we shall have to wait and see.

M

[engelo] 01/7/2013 11:43

maca: I may be over simplistic but thought that IOF merely interposed an intermediate stage in the brine disposal process which remained the O+G co's responsibilty. Afaics the O+G cos get paid by IOF for doing nothing, or nothing very much. And a contract is a contract.

edit: see SG's done this quicker and better in 4381 :-)

[pcjoe] 01/7/2013 11:39

You are correct Maca - In all respects Business opportunism & the bottom line will dictate - the O&G guys are not fools

With regard to disposal costs that is exactly what IOF are offering to minimise re their presence at certain SWDs

Note "certain SWDs" - As more production comes online in the area IOF will have the choice where they set up shop - They will have their preferred sites but ultimately if the O&G guys dont play ball re their cut then IOF can just leave them to it - IOF do not have any competition & none on the horizon has been spotted -Snapping up iodine lease as they have been doing, just makes them more untouchable in this regard

EDIT

Also Maca just because an O&G well has reached the end of its working life it doesn`t necessarily follow that the locally serving SWD has also reached full capacity - All down to the sums

[superg1] 01/7/2013 11:36

Maca

'If IOF cannot dispose of it they cannot extract it, and permitting of a new disposal well on 'producing' land would I suspect be difficult.'

I presume you are talking 20 or 30 years time with iof taking wells over.

Thus not something to worry about right now.

But while you raise the point, I'm sure O and G guys love IOF.

In simplistic terms, IOF out a sieve at the point of disposal of the brine. It costs the O and G guys nothing, but they get payments for allowing it to go through the sieve frist.

Better still, without IOF Mis-states woulds till be pumping 200 bpd of oil down the disposal well, if IOF hadn't been there.

IOF told mid-states about the oil and claimed MS tech must be playing up. MS said no but then found there skimming kit wasn't working.

How many times has that happened over the years and gone unnoticed.

So PR wise MS must feel great that IOF stopped them pumping oil back into the ground, it could have gone on indefinitely without IOF.

So I'm sure they are happy to have a regular cheque for doing naff all, and an extra warning system about pumping oil down wells.

It was a factor I hadn't considered. It's a no-brainer to have iodine plants at your SWD sites. it's money for nothing.

While low in terms of revenue, partners are always seeking to get costs down.

If it stops you losing oil too, they how can you ignore it.

[engelo] 01/7/2013 11:30

Been thinking a bit about finished product delivery/warehousing. Do we have any clues as to where potential US customers for iodine and derivatives are located? And how do we get iodine to India?

[maca1212] 01/7/2013 11:26

pcjoe,

Thanks for the response, looks to me that the potential ransom strip for iof with the O&G companies in these circumstances would be disposal. That, together with low historic and 2012 sales price per kilo achievement in comparison with competitors (and the rather bizarre fact that IOF sales by weight in the 'iodine bonanza year' of 2012 was lower than in 2011) gives me pause.

The Oil & Gas companies are portrayed on here as a bunch of matey blokes who aren't interested in iodine (or apparently money) and who are keen to dispose of brine at no cost to IOF and conspire to create a monopoly on frack water supply to IOF's benefit in Montana.

I may be overly suspicious but I find this a tad difficult to swallow. Talk of a 'takeover' or spinning off what are apparently money spinning initiatives similarly leaves me cold.

Chesapeake have given figures of $0.25 for disposal via 'owned' infrastructure, $0.50-$2.50 per barrel for disposal via third party pipelined infrastructure, and up to $8 per barrel where they have to truck the stuff out of state (as in Pennsylvania).

If IOF cannot dispose of it they cannot extract it, and permitting of a new disposal well on 'producing' land would I suspect be difficult.

Of course if the O&G operators pick up the tab for disposal that would be fine, but building a business model on the back of such largesse strikes me as shall we say 'optimistic'.

M

[superg1] 01/7/2013 11:19

Steady is the word freddie.

I never show my full hand, and have plenty in the tank on research to share as and when I think fit to do so.

A few are well aware that solid research can pick up on things well before others.

The main market is a different game.

It seems to day we have someone picking shares at 148

[freddievas] 01/7/2013 11:15

Lets hope the rumours of imminent comms are well founded. The bear raiders have had their fun. Time for the resumption of usual service, if at a steadier pace, to reflect the ongoing implementation of the business plan, the viability of which has not been in question since IOF1 came on stream. GLA.

[pcjoe] 01/7/2013 11:04

Certainly read it somewhere Maca but it is contradicted by your published find so will have to be left as an "apparently" for now until or if I can find that source - seemed fairly reasonable to me, at the time, that something less viscous than oil (pressured brine - naturally or otherwise - for instance) might fill the gaps left by hydrocarbon removal but no expert - Perhaps surrounding brine might replenish the wells over time?

With regard to acquiring old wells/Swds etc - The following considerations might come in to play

a) The O&G commercially exhausted wells are valueless to the former operators - Indeed there may well be expense in sealing/closing them off ( different states have different regs re this ) - Any offer is likely to be better than none, especially if IOF have a choice of which old wells to go with

b) Some of these old high PPM wells may well be already hooked up by brine lines to existing IOF plant at nearby SWDs so disposal costs might not be high - All these wells will be hooked up by some method (truck or pipeline) to an existing SWD - A mobile mini IOF plant could easily be used to intercept in this process if worth while

All down to the bottom line as usual, but worth following up IMO - No doubt IOF are already on the case re this, if they think it feasible - If they weren`t so busy I`d probably ask

Always interesting & useful to try & work out future direction of operations etc - Future prospects do have a Net present value which can impact on the current share price as you know & of course affect any takeout value