First post on Ihub.
I believe IEVM is a long for the following reasons:
1. IEVM already has the ability to generate $800K in sales with the customer base that the company has in place already.
2. If IEVM only secures 25% of the Altamont Field (94 oil wells), this equates to $1.2 million in total sales assuming IEVM hits the $800K sales target.
3. During the most recent quarter, EP Energy reported a change in the way that they treat H2S. From EPE's latest 10-Q: " For the quarter and nine months ended September 30, 2015, we incurred a decrease in lease operating expense in Eagle Ford of approximately $1 million and $8 million, respectively, due to lower chemical costs due to changing the method (amine unit vs. chemicals) in which we treated our gas, lower power costs due to releasing rental generators and lower disposal and labor costs. In Altamont, we incurred a decrease of $3 million and $4 million in the quarter and nine months ended September 30, 2015 due to lower chemical costs and lower maintenance and repair costs."
4. Amine units cost $70K+, and while IEVM's VP told me that Excelyte won't be a full substitute for Amine units, Excelyte has experienced " [I]ncredible results in the field combatting high H2S scenarios."
5. Pay attention to EP Energy's Altamont Field (377 oil wells). This field is where IEVM already has a production depot. The Altamont Field's production grew roughly 13% year over year while cost savings have gone down. In EPE's latest quarter, the Altamont field saved 200% more in the most recent quarter than in the first 6 months of this year combined.
6. IEVM is not suffering from competition during this initial roll-out, according to what the CFO told me. The large oil and gas service companies have not affected IEVM's niche, and one of their more direct competitors, Envirolyte, does not have the necessary infrastructure in place to hurt IEVM's roll-out.
7. KC Gamma Opportunity Fund's manager has his wife and child listed as shareholders of IEVM (1.2 million shares and 600K shares, respectively). KC has compounded returns of 15% since inception in 2006.
8. IEVM's VP, Chad Crady, is a rockstar. As president of Sage Power Solutions, he grew revenue from $0 in 2012, to at least $1.3 million in 2014 (SPS did $1.3 million over 2013).
I'm a busy college student, but when my schedule starts to free up again I will dig deeper. I think the next step is to ask the guys working in the Altamont Field about Excelyte.
