Brine Supply Update

RNS Number : 5415G

Iofina PLC

23 November 2015

 

23 November 2015

Iofina plc

("Iofina" or the "Company")

(LSE AIM: IOF)

Brine Supply Update

Iofina, specialists in the exploration and production of iodine and iodine specialty chemical derivatives, is issuing an update to the market today on the Company's iodine production in the State of Oklahoma.

Late last week there was a magnitude 4.7 earthquake with an epicentre approximately 5 miles due south of one of the Company's IOsorb® plants in northwest Oklahoma.  There were no injuries to any Iofina employees nor damage to Company facilities.  As a result, the Oklahoma Corporation Commission ("OCC") Oil and Gas Conservation Division issued an Implementation Plan to reduce salt water injection in the nearby area.  In the coming weeks, the oil and gas producers who own and operate over 20 Salt Water Disposal ("SWD") injection wells in the affected area will likely be reducing injections up to 50% within a 5 mile radius and up to 25% within a 10 mile radius of the affected area at SWDs specified by the OCC.  The expected result is anticipated to be a reduction of available brine to IOsorb® plants IO#3 and IO#5 in addition to a possible reduction of brine at plant IO#2.  IOsorb® plants IO#4 and IO#6 are not currently affected by this injection reduction plan, but they are located in the area where SWD operational changes could possibly apply at a later date. 

As of today, the ramifications for the Company's iodine production are not certain. The Board is currently estimating that this may reduce Iofina's current production rate of crystalline iodine between 10-20% on a per annum basis from its 5 operating plants.

The Company still anticipates that it will meet H2 production targets of 260-300MT for H2 2015.  The Company will be working closely together with its partners to maximize iodine production and revenue. Most of the affected SWD sites where the Company's IOsorb® plants are located are currently injecting volumes in excess of the capacity of Iofina's plants. This was by design to ensure that the Company would have adequate supplies during times of reduced production of brine by the SWD operators. The Company is investigating additional ways to increase water quality and iodine concentrations to improve the overall economics for the Company and its partners.   

Commenting, President and CEO Tom Becker stated: "While the reduction in brine supply is likely to affect our production at 3 of our 5 IOsorb® plants, we will be working together with our partners to minimize any production losses and together will investigate means to reduce the impact of this decision by the OCC.  We are pleased to be on track to meet H2 2015 crystalline iodine production guidance and we intend to provide an update to the market once the impact of this OCC decision is clearer."

For further information, please contact:                                                                                             

Dr. Tom Becker, CEO & President

Iofina plc

Tel: [phone]

Christopher Raggett/Giles Rolls/Joanna Scott

finnCap Ltd

Tel: [phone]

Rob Collins/Emily Morris

GMP Securities

Tel: [phone]

Media Contact:

Dominic Barretto/Harriet Jackson

Yellow Jersey PR Limited

Tel: [phone]

About Iofina:

Iofina specializes in the exploration and production of iodine, iodine specialty chemical derivatives and produced water. Iofina's business strategy is to identify, develop, build, own and operate iodine extraction plants currently focused in North America based on Iofina's WET® IOsorb® technology. Iofina has production operations in the United States, specifically in Montana, Kentucky and Oklahoma. It has complete vertical integration from the production of iodine in the field to the manufacture of the chemical end-products derived from iodine to the consumer and the recycling of iodine using iodinated side-streams from waste chemical processes. Iofina utilizes its portfolio of patented and patent pending technology, proprietary methods and trademarks throughout all business lines.

www.iofina.com

 

END

 

 

MSCEAEFAAASSFAF