Excelyte is an outstanding cheap product to treat H2S. It is also the worst possible time to break the O&G EP business.
Many if not most independent EPs begin their drilling and production when fracking was a new technology without a known cost reference. The crude oil price was in the $100 per barrel. The banks were willing to loan capital with such high price. The profits were about $30 per barrel; loans were paid with little problems, all was well.
The 2014 crash has totally changed the fracking industry. The outcome is that only the most profitable production wells are producing. In the O&G industry H2S is a major additional expense, just the additional safety equipment that must be on location to satisfy the OSHA regulations is a negative. IET potential customers have evaporated unless the IP H2S wells are gushers meaning an additional $2 or $3 per barrel cost is manageable. Many LTO EPs are having a hard time to stay profitable, that $2 or $3 added cost is too much. Shutting down the well is preferable until!!!
The price of crude oil cannot stay down back to the $20s, it will cause major political up evil in the Middle East and Africa, cannot forget Venezuela. Once the US EP M&A will have been completed IET will rebound. By the end of this year IET should pick up more customers. Patience, hard to do!
These the time of years the auto industry start producing the new model. Should be good for iron ore and steel plate!
Thanks very good link. In calculating my crack average I scr__d up. I used the number of day less week end! I do not think the refineries are closed on week ends?? My new average for Q2 is $12.39.
Using the EIA published crack spread between April 19 and today the Crack is $8.41. I use the quarter starting date 30 days before the last Xdate or in this case what was supposed to be the last Xdate. The reason for this 30 days previous start date is that the market powers of be must receive the projected Xdate 10 days before the programed Xdate. I add to this the time it takes to prepare the report and to have it approved by the BOD. Still not too good but better and going up some what!
The over supplied of crude is starting to be an argument that may no longer be right. There is an analysis of the world production of crude, including OPEC that sees South America as the place that will see a 1MMBD drop in production. The producers having problems are: Venezuela, Colombia, Mexico, Equator and Brazil. Venezuela is on the verge of default. Brazil is in the midst of a political Armageddon. The others are having a hard time to find financing. The index price does no longer provide a profit after all expenses are paid. The crude price has seen bottom and will be in the high $40s if not $50s by Q4. The refiners crack spread is getting higher, in the teens. Patience is required?
It is quite interesting, I read that we have bottom out and we should see crude prices back to the high 40s or low 50s. I also read that a recession is coming so sell, sell, sell??
My guess is that the Saudis will not get their ways; the LTO-Shale will do better than expected. As for the recession it will all depend on the November election. If elected the democrats will tight the hands of business some more! Seems to be what they do best!
In the semiconductor manufacturing industry polarity is all important, so wash water has of negative polarity. Therefore water piping is in inert material; Teflon is the choice so as not to modify the polarity of the water. Another important quality of Teflon is that because it is inert no chemical part of the piping material leach at room temperature. Semiconductors circuits are washed clean because any particle in the micron size can disable the circuit. Negative water polarity removes all impurities.
Another application where Electrolysis process is used is at the Palo Alto accelerator cooling water. The water must be of negative polarity. The electrical potential is very important in controlling the test elements in the center of the accelerator core. Water cooling piping is in Teflon.
Up front, I do not know but my guess is Excelyte is of negative polarity water that once injected kill or neutralize H2S and others undesirable elements. The degree of polarity as to be what makes Excelyte so effective. The Excelyte batch delivered to drilling site are in Teflon tanks, this is what I observed on IEVM photos. I guess they want the polarity of Excelyte to be max upon delivery. Excelyte is undetectable after 30 days, another indication that the polarity is lost once in contact with ground polarity.
I suppose it is difficult to sale the idea that Excelyte is polarized water that will kill H2S and more. I guess Chlorine is seen as better because at least you can smell it, you can smell the money you spent!! Ha! Ha!
Continue from above:
The distillate water is fresh water but cost is prohibitive unless you sale the water as fresh water for $200 per ton. Excelyte has a decontaminant permit the drilling mud, once reconditioned, to be reused at will. The
Fracking liquid which comes back with the FTO production is separated and can be reused once reconditioned.
Excelyte will become the ultimate decontaminant once the O&G prices go back to the $40/$50 per barrel. The FTO-Shale industry has cut its prices by half, and prices at $20 per barrel cannot stay much longer. Several OPEC members cannot live unless the Brent price gets back to $50, it will happen very soon.
IEVM IPO took place the 30th August 2000, or 4 month short of 16 years. Excelyte the product that is IEVM at first was a disinfectant for hospital, slaughter houses and restaurants. Early on it was approved by the FDA, not a small achievement. Excelyte cannot be patented; I think I know why because this electrolytic process has been used, with success, by at least, two industries that I am familiar with, semi-conductor and industries requiring the water polarity control. I may be wrong but let it be as that!
I became interested by Excelyte subsequent to reading an article on “RigZone” an O&G upstream internet website. I spent the last 30 years of my carrier in the O&G business, designing drilling offshore rigs. I know first-hand the problems that H2S can do from a health and safety point of view but also the oxidation of steel used in drilling. The H2S corrode very quickly the steel pipes and failure is catastrophic. The drilling and production industry deals with high pressure in the thousands of PSI. When a failure occurs it is a big deal and the personnel exposure is deadly. The standard procedure to deal with H2S in the drilling environment is to flow the return mud through a separator and burn the H2S gas as far downwind from the rig. The mud cleaning, for reuse become expensive, and all personnel must use gas masks. H2S is heavier than air, so very dangerous to handle, 5 PPM is already too much.
Upon reading the article I realized Excelyte potential and purchased shares of IEVM. The management of IEVM had just discovered the potential of Excelyte. This was 2 years ago today; the old IEVM management had no experience with the O&G industry and that for 14 years! Excelyte cost to produce is inexpensive as compared with the competition. Chlorine is probably 10 times more expensive, but still requires other treatment if ecologically discharged. The other competition is even more expensive as it requires distillation by evaporation. The distillate water is fresh wa
I look at IEVM as a poker hand. I believe Excelyte to be a good product competitive in the H2S O&G market. The competition is many times more expensive. Chlorine is one the other is decontamination through evaporative condensation. Excelyte can become the principal decontaminant for H2S what is holding it back is the WTI price. My guess is that Excelyte treatment is less than $1 per barrel. Many EPs are just about under, so a $1 per barrel expense is too much, they prefer to shut down the well.
The question is, has the index price bottom out, I would prefer to say: is OPEC capable to keep its members in line. The Saudis can keep up the price that low, but the members like Nigeria which get 70% of their budget from crude oil revenue, cannot stay alive with these kinds of prices. By the end of the year, 2016, the bottom will be behind us.
A shut down well must be work over to be back in production. That is true for standard reservoir wells. In a LTO-Shale well, the production start out as IP than after a year or two get in the EUR volume. Shutting down these wells means to forgo the fracking fluids which provide the pressure to not only frack but bring the crude of gas to the surface. A EUR well will slowly lose production volume. At some point the cost of maintaining the well head equipment does not cover the cost of the production of that well, so shut down is SOP. The other alternative would be to refract the well, but the geological formation must still be viable. This is up to the EP. In general I would assume that a new IP well would be preferable. I know that the cost of a new FTO well ready to produce is argumentative. In general today the cost is halve what it was 3 years ago. Some where between 2 or 3 millions dollar, including fracking. This investment over 3 years is profitable with crude oil at $25/$30 per barrel. This is assuming that large loans where not taken on 3 or 4 years ago.
This K-10 just publish state basically the same as the last one. IEVM is paying its permanent employees with stocks. As in the last K-10 IEVM has 3 month of cash to cover all expenses.
If you get paid in stocks, would you keep on working knowing that IEVM may go bankrupt? I still believe IEVM is a good product that must live and compete in a very difficult market.
I believe that several new developments will make Excelyte more acceptable: 1. the man made earthquake in Oklahoma and other states will make fracking flow back more difficult to pump in disposal wells. The flow back will have to be decontaminated prior disposal. 2. IEVM will be used in at least gathering pipeline networks.
The down side is that wells contaminated may be shut down all together. This market may just call for that.
Excelyte may interest a major which has or is going to have contaminated H2S production. Than IEVM could become a subsidiary of a major or bought out altogether. For us the best option would be a buy out with stocks not cash.
I am sure IEVM has contract employees. A contract employee from an accounting point of view is an expense just like buying a pencil.
If I remember well, MSB mine is shut down while the locks are closed. There may be several boatload waiting to pass the locks. But these will be the first in 3 months or there about. If there is a distribution in Q1, it will be may be $0.01 per units. The biggest problem for MSB iron ore is that it only customer is the great lake area. The economy of the great lake area is not good at present!!
IEVM own Excelyte which is specifically used to decontaminate water based fluids containing H2S. IEVM has added another product that eliminates other parasites. There is little competition for water decontamination, but this process does not take fracking return fluids and makes it fresh water or even potable water. Fountain Quail NOMAD™ process is a proprietary water distillation technology. It works as thermal evaporator desalinated return water from hydraulic fracturing into distilled freshwater system.
Before fracking can take place the well as to be drilled. Drilling mud is not fracking liquid and is used to keep the drill bits clean and cool and return the shaving to the surface. In standard drilling the water is mixed with ingredients that enhance the drill bits cutting. The drilling mud flow through the drill pipe and return through the annulus. Another important function of the drilling mud is the produce enough hydraulic resistance by been heavier that water such as, for example, 15 pound per gallon. The drilling mud should the drill bits perforate a high pressure crude oil or gas pocket, the mud will control or stop any possible blow out. The returned drilling mud may have H2S, therefore Excelyte is used to neutralize the H2S and many other potential dangerous parasites. Excelyte does not produce fresh water but the drilling mud goes through a process that eliminate sand, silica and any other matter found in the return mud. Than the drilling mud is recondition to the wanted weight and reused. Aside from the initial water input, the reconditioning requires little water.
Fracking fluid requires lots of fresh water and is used to fracture the geological formation. This is performed after the drilling is completed and the perforations between the horizontal inner-outer production tubing are lined up. The fluid will return to top side with the liberated crude and/or gas. Once separated from the crude oil the fracking fluid will have to be process and water
he bottom line is:
1. Companies are not spending money unless they have to.
2. Not all wells have H2S
3. Many H2S well have been shut down especially if they are in the EUR life spend
4. New IP wells are not call for yet, the WTI index price is not high enough.
5. New spending will match new quarter, so watch for Q3. Q2 is done.