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By P. B. Baxendell

The appraial of producing properties and profitability ntzalysis of a proposed capital expenditure are based on the same principles. In both problems a projection of future cash income is. cornpared to one or more capital expenditures. Several different methods have been in use either to compute a price to obtain a given earning power on the investment or to compute the earning power which will result from a given capital expenditure. One of these, the "Average Annual Rate of Return" method, computes in a simple manner the ratio of the present value of the future earnings after amortization to the present value of the undepreciated balances of the investment over the life of a project. This method, not well known generally, appears to have some rather unique advantages in reducing the computation work required, eliminating trial-and-error solutions, and providing a more accurate answer when applied to oil industry investments subject to the unit-of-production basis of amortization. Its derivation is given and its versatility demonstrated in the solution of certain everyday investment problems. A number of charts, useful in applying this method to profitability analysis and appraisal work, are provided. The current trend in the market values of producing properties is shown. INTRODUCTION Making sound capital expenditure decisions requires an objective means of measuring the productivity of individual investment proposals. Since the best measure of the economic worth of such proposals is their ability to produce profits, it is common practice to grade proposed capital expenditures according to their annual earning power as a percentage of the outstanding capital. The same principles which govern the determination of the rate of return of proposed capital expenditures also apply generally to the problem of determining the appraisal value or purchase price of income-producing oil and gas properties. Both problems are of prime importance in the producing phase of the oil business, where management is faced daily with decisions to drill or not to drill certain development wells, or with the determination of the appraisal value of producing properties. The common feature in both problems is that a projection of future cash income is compared with a known or estimated capital investment to determine itsiearning power or annual rate of return. In the case of development drilling, the cost of the proposed well can usually be estimated with a fair degree of accuracy and the problem consists of finding the rate of return on the invested capital. In the case of appraising producing properties, on the other hand, the desired rate of return is usually known in advance and the problem consists of determining the purchase price which, for the given income projection, results in the fequired rate of return. Certain accounting procedures common to the oil and gas producing business make these two problems and their solutions somewhat different from corresponding problems in other industries, and, in certain ways, simpler. The main difference is in the amortization policy which, for oil and gas production, is frequently on a unit-of-production basis, compared to the amortization on a time basis used in many other industries. The purpose of this paper is to discuss briefly the various methods currently in use for the measurement of productivity of invested capital in producing properties and, in more detail, the derivation and application of what will be called the "Average Annual Rate of Return Method". This rather interesting and not too well known method has some very definite advantages in the solution of many problems common to the oil industry. For the sake of simplicity, federal income tax considerations have been disregarded in the examples used, since they do not affect the principles involved. The use of the production payment route in the sale or purchase of producing properties, which has been amply covered in many other publications, has also not been included in this analysis. METHODS FOK MEASUKING THE EARNING POWER OF INVESTED CAPITAL, Of the many different methods used to measure the earning power of invested capital, four are applicable to oil or gas production ventures. Depending on whether these four methods utilize one or two interest rates, and whether a fixed amortization pattern is used, they may be classified as follows.

By A. K. Chakravarti, A. Lihiri, G. G. Sarkar

One primary objective of India's third Five Year Plan is the expansion of coal production. The goal: boost present output of 45 million tons to 95 million tons by 1965--an increase of more than 100 pct!

Jan 7, 1961

By H. W. Becker, C. C. Frye, A. V. Degau, A. Masuda

Natural gas containing 25.65 per cent hydrogen sulfide and 4.75 per cent carbon dioxicle is gathered frorn eight \veih arid tratzsporrcd 26 miles at a flow rate of 160 MMcf/D and at operating pressures of frotrl 1,200 to 1,800 psig. Dry desiccant dehydrators at each wellsite tnaintaitz the dew point of the gas below 17F. Telemetering facililies permit control of field operations from a central instrunlent console. Corrosion control ineasures, design coilsiderations and material specifications pertainitz to these specia1 conditions are cliscussed. INTRODUCTION Natural gas containing 25.65 per cent H2S and 4.75 pcr cent CO, is produced from the Pine Creek field, Alta. It is dehydrated at wellheads, gathered at 2.200 psig and transported 26 miles to the Windfall field where it is delivered to the inlet of injection compressors at 1,800 psig. The daily average volume of gas transported is 160 MMcf. The project is believed to be unique in its combination of percentage of hydrogen sulfide, operating pressure and transportation distance. This paper describes the project and presents details of some of the design features, corrosion control program and centralized automatic operational control. The Pine Creek field project is one phase of a joint operation of two fields—thc other being the Windfall field. The two fields lie about 30 miles north of Edson, Alta. and 20 miles west of Whitecourt, Alta., respectively, as shown on the map (Fig. 1). They are owned by the same interests and operated according to a plan for maximum economic recovery of products. The Windfall Leduc D-3 reservoir contains a rich condensate-bearing gas containing 15.5 per cent HIS. The gas from the Pine Creek field contains only very small quantities of butane and heavier products. The Windfall reservoir is being cycled to obtain maximum condensate recovery using gas from the Pine Creek field as the displacing fluid, while producing the residue sales gas for both fields from the Windfall field. The Pine Creek field development and gas-gathering facilities are shown on the map (Fig. 2). The producing formation is the Leduc D-3 reef at a depth of 11,300 ft. The original reservoir pressure was 4,590 psia at 7,400 ft subsea and the temperature is 245F. Eight wells are equippcd with dry desiccant dehydrators with the following capacity ratings: three at 35 MMcf/D; three at 20 MMcf/D; and two at 10 MMcf/D. WELLHEAD EQUIPMENT Dry desiccant dehydrators were designed to reduce the water content of the saturated wellhead stream to 2.5 lb of water/MMcf at 2,000 psig. This specification was necessary to prevent hydrates and corrosion forming in the pipeline which will operate at temperatures as low as 20F. A typical flow diagram is shown in Fig. 3, and Fig. 4 is a photograph of one of the wellhead installations. Some of the design details given below are subject to modification in the field. The well-stream flowing temperatures range from 135 to 170F. Wellhead flowing pressures up to 3,200 psig are reduced to the dehydrator-operating pressure of about 2,100 psig by throttling through a pressure control valve. The gas is then passed through an aerial cooler where its temperature is reduced to 105F. thus removing over half

By Oswald J. Heinrich

(with figures on plate V.) THE origin of spontaneous combustion in collieries is, of course, chiefly due to bad system in laying out the pits, unclean workings, insufficient ventilation, and neglect in damming off works after they are exhausted of the main coal. This is particularly indispensable in the Richmond field, because it is difficult and dangerous here, on account of the inferior roof, to remove the last vestiges of coal ; and we are compelled also to retain all the slates and bands, as far as possible, in the pit, to help fill up, although such material is liable to fire. This, however, can be prevented to a great extent, as men¬tioned below. I am satisfied that the only system of working this thick coal is by cross-cutting ( Querbau, ouvrage à travers) or working in benches, as practiced in France (Creusot, Rive de Gier, St. Etienne), in Sile¬sia (Königsgrube), which I have used as far as it is practicable in an old pit, almost torn to pieces by former workings. Modifications may, of course, be needed, even in the same pit, on account of irregu¬larities in the seam. I am also satisfied for economical reasons (on account of the heavy cost for timbering) that pits here ought to be worked upwards, even if it requires a longer period of time to win the coal, and a greater outlay of capital to commence with. The various saddle-shaped "troubles" making natural minor basins in the main basin aid in the execution of this plan. A pit worked once ought to be worked out clean, given up, and dammed off forever. If sections of proper height are assumed, according to the required amount of production for a certain period of time, they ought to be worked out and filled in as much as possible, dammed off, and ulti¬mately allowed to fill up with water, in order to protect the tipper works in future from fire in the gob below. This I consider indispen¬sable, because we may not be able profitably to fill in all the ground. To do so we have to use the waste of the mine, although it is liable to fire in time. In using this stuff, it ought to be surrounded by walls of rock not liable to take fire, laid firmly in clay, the gob being in the middle, and firmly covered and packed with clay on top. In

Jan 1, 1873

By E. W. Engelmann

RAPID progress has been made during the past year in the copper mills throughout the country. Particular efforts have been made to increase the fine-grinding efficiency by the installation of larger classifying units operating in closed circuit with ball mills, such as the 78-in. high-weir Akins installation at the Phelps Dodge plant at Ajo, Ariz.; also the Type "FX" Dorr classifiers of Nevada Consolidated at McGill. Nev. and the "FX" Dorr bowl classifier of the Braden Copper Co. in Chile. Some of the copper milling plants in the Southwest, such as Chino in New Mexico and Ray Con. in Arizona, have replaced rolls operating wet in their fine-grinding circuit by rod mills. At Hollinger primary rod mills were formerly used in open circuit followed by pebble mills in closed circuit with classifiers. They now have primary ball mills in closed circuit with large extra heavy classifiers and no secondary mills. This new installation is producing the same grinding on 5000 tons per day with a reduction in cost of nearly 4c. per ton. At the Braden plant, in Chile, short-head Symons crushers have replaced 54-in. rolls, thereby in- creasing crushing capacity with some saving in maintenance cost.

Jan 1, 1939

By Paul M. Tyler

HISTORICAL concepts of the economics of the glass-sand industry are changing rapidly. The greatly expanded demand for glass containers combined with higher freight rates on raw materials and manufactured products have induced a migration of glass factories toward densely populated centers and the creation of new standards of place value for sub- standard sand deposits. This migration has been facilitated by the construction of pipelines to bring cheaper natural gas and liquid fuel to large cities and may be further speeded by the adoption of modern mineral dressing methods to permit economical utilization of local raw materials. Our national resources of naturally high-grade 1 silica sand are abundant, but most of the best de- posits are situated so far from large centers of population that it now costs $3.00 to $5.00 a ton to carry the sand from the mine to the optimum site for a 1 factory making beverage bottles, scientific and electrical glassware, and miscellaneous blown and pressed ware for local markets. It follows that on the basis of freight savings alone it may be economical to use material from inferior deposits closer to the factory even though the f.o.b. cost of mining and treatment may be much high

Jan 1, 1950

CONTENTS PAGE DANIELS, SAMUEL, LYON, A. J., and JOHNSON,. J. B.-Casting and Heat Treatment of Some Aluminum Copper-magnesium Alloys 1 ELLIS, O. W. and SCHEMNITZ, D. A.-Experiments on the Heat Treatment of Alpha-beta Brass : 4 ENOS, GEORGE M. and ANDERSON, ROBERT J.-Coatings. Formed on Corroded Metals and Alloys 5 COMSTOCK, GEORGE F.-Notes on the Hardness of Heat-treated Aluminum Bronze 6 Casting and Heat Treatment of Some Aluminum Copper-magnesium Alloys Discussion of the paper of SAMUEL DANIELS, A. J. LYON, and J. B. JOHNSON, presented at the Milwaukee Meeting, October, 1924, and issued, as Paper No. 1350-N, with MINING AND METALLURGY, July, 1924. D. HANSON and M. L. V. GAYLER, Teddington, England (written discussion).-At the National Physical Laboratory, the writers have made a number of researches on the relation between the constitution and mechanical properties of aluminum alloys of various types; the results obtained were in good general agreement with those of the authors. The writers, however, did not think that increasing the copper content of sand-cast low-copper duralumin to 4 per cent. necessarily caused a drop in the elongation to 1.5 per cent., as stated on page 9. In the case of sand-cast copper-aluminium alloys they had obtained much greater elongation, in some cases as great as 13 per cent. in heat-treated castings. For example, in a sand casting containing 3.5 per cent. of copper, a strength of 12 tons per square inch and an elongation of 13 per cent. were obtained; in a casting containing 4.5 per cent. copper, a tensile strength of 13 tons, and an elongation of 9 per cent. were obtained. These values were the maximum; the elongation varied considerably, being as low as 5 per cent. in some cases. In the writers' opinion, such variations are due more to unsoundness in the sand casting than to any other cause.

Jan 1, 1925

Jan 1, 1968

By AIME AIME

MODERN metallurgy is an art and a science. The art is process metallurgy-extracting metals from their ores, refining them, and alloying them with one another and with certain nonmetals to produce thereby a variety of metallic materials which, owing to a wide range of useful properties, are for many purposes more valuable to man than the individual metals themselves; process metallurgy also includes shaping or otherwise treating metals and alloys to form objects useful to a complex industrial world. The science is physical metallurgy-organized knowledge of the constitution and internal structure of metals and alloys, of the relation of their composition and structure to properties, and of the laws, theories, and hypotheses that purport to explain this relation.

Jan 1, 1942

By L. R. MacLead

Delivery of tailing to any part of the area by gravity from the ridge was found practicable. Experiments with asbestos-cement pipe proved it possible to use level pipe across the dams if it is fed through an inclined section in which pressure could be developed. Use of pipe to transfer the tailing to the dams was not favored because of the possibility that choking might occur. Metal flume was not believed to have sufficient wear resistance on this material and wooden flume would not withstand damage by the weather so well- Flume -action made- of 26-in diameter asbestos-cement pipe, split before curing and molded to a specified cross section, were finally approved. The flume is connected to the 24-in. diameter tail in distribution pipe by heavy concrete lateral launders. Cascades of horizontal and vertical pipe sections are used at the top of the pressure leg where scouring by high-velocity flow of tailing might occur.

Jan 1, 1942

By Alan B. Nicol, W. T. Parry

The outcome of these tests has been twofold. They have served to demonstrate that the tiltmeter is a useful and dependable instrument which could prove to be of significant value in reaching the goals of landslide prediction and control, and they have raised a good many more questions about the mechanism of slides than they have answered. It seems likely that many of the old concepts and assumptions will be modified or discarded as more knowledge of actual field phenomenon is gained. Safety and economy are paramount concerns in determining slope stability. These two considerations govern the feasibility and character of slope construction from start to finish.

Jan 1, 1970

By F. S. Norcross

DEVELOPMENT of the manganese deposits of Cuba is a matter of importance not only to those involved in this industry on the Island but to the United States steel industry and to our Nation as a whole. For years our domestic resources of manganese have been wholly inadequate, but the recent Cuban development points the way toward solution of this strategic mineral problem.

Jan 1, 1939

By P. K. Leung, S. R. Allada, P. M. Dranchuk, D. Quon

The alternating direction explicit procedure (ADEP) makes use of the boundary conditions to reduce multi-dimensional problems to a series of one-dimensional problems. The method, previously applied to reservoirs containing only an under-saturated oil, has now been extended to cover the case of natural gas reservoirs. l his involves solving a non-linear partial differential equation, application of the procedure is straightforward and no calcuIational problems were encountered. INTRODUCTION There has been a growing interest in formulating mathematical models of petroleum and natural gas reservoirs — models which permit the engineer to examine and evaluate the physical and economic consequences of various alternative production policies. The tremendous reduction in the cost of solving such models in recent years has made possible their use as an almost routine management tool. This reduction is the result not only of improved computer hardware but also of the development of more efficient mathematical techniques. The present paper is concerned with the application of a recently proposed numerical method (ADEP) to two-dimensional gas reservoirs. STATEMENT OF THE PROBLEM Given a two-dimensional Region R, bounded by a closed Curve C (Fig. 1) such that the behavior on Curve C is known, the differential mass balance for each fluid phase in R, neglecting gravitational effects and assuming Darcy's law for fluid transport, can be written as:

Jan 1, 1967

Jan 1, 1967

By E. W. Parker

THE anthracite region, from which there is produced annually about 80,000,000 tons, or approximately 15 per cent. of the total coal supply of the United States, has a combined area of a little less than 500 sq. mi. The total area occupied by the bituminous fields (including the sub-bituminous and lignite fields) is in the neighborhood of 400,000 sq. mi., so that 15 per cent. of the total output comes from this small area of only a little more than 0.1 per cent. of the coal-producing territory. of the United States. The productive anthracite area is divided into a series of basins or troughs, roughly parallel, extending. in a northeast-southwest direction through the. Counties

Jan 1, 1921

By Frank G. Breyer

C ONDITIONS have not been favorable for new developments in any line. It has been a period, how- ever in which recent developments have been subjected to the severest tests. Those which have been able to hold their own in the severe competition of 1932 must be considered fully proved commercial processes. The continuous vertical-muffle retort plant at Palmer- ton is reported to have been in operation at practically full capacity throughout the year. The high quality of metal produced and the low operating costs are factors which have kept this plant running when many of the older furnaces were shut down. The plant at Meadow- brook, W. Va., is also reported to have been in steady operation throughout the year. Average retort life is said to be better than two years with about three-quarters of the original retorts still in operation after 2 ½ years.

Jan 1, 1933

By THOMAS S. MENNIE

ON GORE Mountain, about four and a half miles, southwest of the village of North Creek, Warren Co., N. Y., are the Barton Mines. Here is the largest known deposit of garnet in the world. This property is owned by H. H. Barton &: Son Co., of Philadelphia, and is being worked under lease by Barton Mines Corpn. North Creek is the terminus of the branch of the Delaware and Hudson R..R., which runs into the

Jan 1, 1925

By Sweetser, Ralph A

AT the fall meeting of the Iron and Steel Division, Oct. 4, 1934, in New York, a symposium was held on Slag Control in the Making of Iron and Steel. The chairman was J. H. Nead and the vice chairman, G. B. Waterhouse. The latter presided at both morning and afternoon sessions. The papers and discussions were presented in the order in which they appear on the following pages. To meet space requirements, much of this material has been considerably condensed. CONTENTS Slag Control and the Blast Furnace. By Ralph H. Sweetser. (With dis¬ cussion.) I Slag Control in Rimming Steel. By L. F. Reinartz 5 Slag Control Applied to Low-carbon Steel. By Frank G. Norris 9 Discussion on both papers 11 Slag Control for Basic Open-hearth High-carbon Steel. By W. J. Reagan. (With discussion.) 14 Slag Control for Recarburized Rail Steel. By A. P. Miller and T. S. Washburn. (With discussion.) 18 Slag Control for Alloy Forging Steel. By A. L. Feild. (With discussion.). . . 24 Slag Control for Alloy Forging Steel. By R. C. Good 27 Slag Control in Acid Open-hearth Steel. By Francis B. Foley. (With dis¬cussion.) 29 Slag Control for Basic Electric-furnace Steel. By H. F. Walther. (With discussion.) 31 Physical Testing of Slag. By A. B. Kinzel. . 40 General Discussion 41

Jan 1, 1935

By W. Hurst

The authors of this paper, in substituting values in a material balance equation associated with a gas reserve and a water drive, cannot find sustainment of what the gas in place should be; therefore, their conclusion is that this type of problem dealing with gas reservoirs is insoluble. They have introduced the word, "cybernetics," based on the work of Norbert Wiener, that further extends this line of reasoning, namely, to the effect that the system is a "black box", and that the gas reservoir and aquifer can take on infinite aspects 'based upon their past performance, to quote the authors. The inference is that this black box is an unknown. which permits in computer programming to subscribe as many variables as possible to observe by adjustment of one to another those combinations of conditions that fit field behavior. This may satisfy those in this discipline whose dedication is to programming, but to the others this is a comparison to the rationalization of the combinational results of the throwing of dice—a probability procedure. In reservoir engineering we are more direct. We learn from the examination of individual we'll and field data exactly what is in this black box. I now come to the impasse that has confronted these authors in their machine calculations. In this I have reproduced from their own production data (Tables 1 and 2 of their paper) pressure vs cumulative gas produced. shown as Figs. D-1 through D-5. A perusal of any of these five plots, for the corresponding fields in the Po Valley, shows the straight-line relation of pressure vs gas produced, evidencing pressure depletion. The point I make is that in their fundamental production data, there is no variance from a straight line that can support a water drive.

Jan 1, 1959