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By John C. Calhoun, Frank T. Bethel

The application of a method for analyzing pressure build-up curves to determine the effective permeability in the Spraberry is presented. Sixteen upper Spraberry wells of the Driver area arc analyzed and show variations in the in-place effective permeability of 2 to 183 md. Since these value- are much larger than the .5 md. or less reported for the matrix rock. a large part of the vertical fractures noted in Spraberry cores- must be considered native to the formation. The effectiveness of the well fracture treatment in connecting the well bore to the native fracture system is analyzed by comparison of the effective permeability as determined from the PI test to that obtained from a pressure build-up curve. These results show that the fracture treatment is sufficiently effective in connecting tile well bore to the native fractrure system to yield a flow capacity within about 50 per cent of that dictated by the native fracture system About two-thirds of the wells show some degree of local blockage. INTRODUCTION Fractured reservoirs have been known in the past.' However, during the past two years the Spraberry formation has directed the attention of the petroleum industry to a study of the performance of a fractured reservoir. The large variation in the number of fractures noted in Spraberry cores rile large variation in the producing ability of offset well.. the dramatic effect of well treatment on well ,productivity. the unknown quantity of oil stored in the fractures and matrix rock. and the unknown oil to be recovered were part of the initial Spraberry puzzle. In this type reservoir where the well treatment is an important factor in determining the productivity. it i- particularly desirable to determine the in-place flow capacity of the drainage area at distance* far removed from the well bore. This value. when compared to the flow capacity obtained from a PI measurement, will show the effectiveness of the well treatment (completion. fracture treatment, acidization. etc. in establishing a flow capacity in the vicinity of the well bore equal to that in the more remote region. The object of this paper i.; to show the application of a method of pressure build-up analysis for this purpose in studying the Upper Spraberry formation in the Driver area. STATEMENT OF THEORY The theoretical basis for the application of a pressure buildup curve to show the effective permeability of the rock at distances far removed from the well bore has been presented in detail in earlier publications.', in the previous development it was shown that pressure build-up behavior of all wells could be reduced to the same dimensionless build-up curve of Fig. 1. This mean.; that the bottom hole pressure of a well after hut-in will rise in such a manner that a plot of pressure against the logaritllm of time yields a straight line. The slope of this linp can be rlzed to calculate the effective permeability as expressed by the following equation: where: effective oil permeability md oil production rate prior to shnt in. STB/I) In practice the flow which occurs into the well bore after shut in and the variation in flow capacity in the immediate vicinity of the well bore usually cause the early part of the build-up curve to be unsatisfactory in the determination of permeability. In general the effect of these factors on the straight line section will become negligible after a time when the of the following equation is equal to 0.1. and the preferred section Of the curve for use in defining the slope lie-

Jan 1, 1953

By G. H. Lair, B. J. Langford, S. H. Rockwood

Volumetric reservoir analysis is dependent upon a firm relationship between porosity, connate water, and net pay. Capillary presswe data on core samples interrelate these three factors. It is shown that other reservoir problems may be resolved: (I) whether water production is indigenous or extraneous to the oil producing interval, (2) an oil-water contact is being approached, and (3) whether the oil-water contact is remotely situated. INTRODUCTION Volumetric analysis of carbonate reservoirs challenges the ingenuity of the reservoir engineer due to an absence of data on the minimum oil-bearing and oil-producing pores of a given reservoir rock. Many studies with this as the ultimate objective are available on the physical characteristics and fluid-flow behaviors of the carbonate reservoir. Some of these publications are: Hassler, Brunner and Deahl's1 study of the role of capillarity in oil production; Jan Law's' and A. C. Bulnes3 statistical treatment of core analysis data; Chalkley's method4,5 or estimating specific surface areas and porosity; Walter Rose's9 report on porosity, reserves, and recovery; Archie's78 tex-tural classification of carbonate rocks; Stewart and Spurlock's9 large core analysis; Purcell'sl0 mercury injection method in studying capillary pressure phenomena; Stewart, Craig, and Morse's" model multiple-phase flow test in investigating the relative permeability effect; and Fatt's12 illumi-nating network model of porous me-dia. The present study shows that the static reservoir parameters of porosity, connate water, and net productive thickness may be interrelated by utilizing a statistical arrangement of mercury capillary pressure data in addition to routine core analysis. This report summarizes the techniques that are followed to obtain these relations which are applicable to carbonate and sandstone reservoirs that do not contain clays. Capillary pressure statistical studies may be extended to include clay-bearing rocks by utilizing water capillary pressure data. POROSITY It is necessary that the laboratory determine the porosity value that includes the pores that are filled with hydrocarbons and water in the reservoir. This is the reservoir's total porosity. When true total porosity values are not available, correlations between porosity and capillary pressure characteristics lose their significance since they cannot be related through oil-base mud core data to the porosity and connate water values found in reservoirs. Methods used to obtain reliable porosity data will not be discussed; however, care should be exercised in selecting samples for measurement. In homogeneously porous formations, small core plugs sampled frequently will furnish adequate information. Where heterogeneity, particularly vugginess, is present, large-core porosity data may be required; in such reservoirs a suite of capillary pressure samples may be selected from small plugs. CAPILLARY PRESSURE Capillary pressure data provide a method for relating two carbonate reservoir parameters, porosity and connate water saturation, which in turn permit delineation of productive rock types necessary for selecting the third parameter, productive thickness. Specific applications of capillary pressure data to petroleum reservoirs were suggested by Archie8 and Pur-cell."' Their work demonstrated that in preferentially water-wet rock, porc

Jan 1, 1958

By Charles C. Templeton

Any explanation of the nature of multiphase fluid flow through porous media must ultimately involve a knowledge of the mechanism of such flow through the individual pores of the medium. To provide quantitative information of the latter type, a study was made of gas-liquid and liquid-liquid displacements in single uniform Pyrex capillaries with diameters as small as 4 microns. Quantitative observation of air-liquid displacements with zero contact. angle indicates the adequacy of a model based on Poiseuille's Law and the independence of capillary pressure and interfacial velocity. Consequently, this work discounts previous claims that flow is abnormally retarded in very small capillaries. For the displacement of a very viscous oil by water in a capillary initially filled with water, flow is faster than predicted by the above model. This behavior is probably due to the existence of a thin annular film of water between the oil column and the capi1lary wall as postulated by Yuster. INTRODUCTION The need for experimental observation of the microscopic nature of multiphase fluid flow, to further the understanding of the results of macroscopic flow investigations, has been previously recognized. Chatenever and Calhoun1 in connection with the API Project 47B have extensively studied the flow of fluids through layers of glass or lucite spheres between glass or lucite plates. Lowman2 prepared an interesting film concerning flow in a single capillary, using an apparatus which made a moving interface appear stationary in the field of a microscope. The purpose of the present investigation was to deter- mine what contribution might be made to this field by comprehensive quantitative observation of gas-liquid and liquid-liquid displacements in single capillaries of uniform, very small diameter. The techniques used are similar to those of Lowman but incorporate improvements necessary for quantitative work. Quantitative observations must begin with fluids of simple chemical composition to provide a basis for analyzing the more complex behavior that may be expected with natural reservoir fluids. However, some qualitative observations on systems involving crude oils are presented. Experiments of this sort involve the observation of the velocity of the interface separating two fluids, and have been performed in horizontal or vertical capillaries by several investigators.3,4,5,6,7,8 The most general treatment of their mechanics, by Brittin,9 involves forces due to capillarity, viscous resistance, gravity, an "end-drag" effect, and the rate of change of momentum of the capillary contents. Since the range of pore diameters of interest in petroleum reservoirs is about 0.1 to 100 microns, it was desired to perform these experiments in the smallest capillaries possible, to ascertain whether capillary diameter had any effect on the existing theory based on data from larger capillaries.* It was also important to be able more systematically to vary the direction and rate of displacement than was done by previous investigators. Finally, to concentrate attention on viscous and capillary forces by eliminating gravity as a parameter, this study involves only horizontal capillaries. The work of Eley and Pepper' with a "large" (0.766-mm diameter) horizontal capillary is the previous investigation which is most similar to the present method of quantitative observation. Here capillaries with diameters as small as 4 microns will be studied.

Jan 1, 1955

By J. S. Osoba, J. G. Richardson, F. M. Perkins

Laboratory experiments have shown profound diffcrences in the behavior of so-called "fresh cores" from the East Texes field and of the same cores after ex~ractio~l with organic solvents. The residual oil satura/ion remaining after waterflooding fresh cores was appreciably lower than the corresponding saturations after flooding extracted cores. This behavior was also reflected in the water-oil relative permeability-saturatiorl relations, which were more favorable for high oil recovery from the fresh cores. These differences were evident not only in the amount of residual oil left after wafer flooding, but also in the saturation water remaining in the core after displacernent by oil. Residual water saturation after displacernetzt of water by oil was higher in the fresh cores than in the extracved core,. Capillary pressure-saturation relations were also different for the fresh crnd extracted cores. Imbibition experiments indicated that both fresh and extracted Bast Texas cores imbibed water spontarteOLISIY, but- the rate of imbibition of water was higher for samp1es after. extraction than it was for fresh core. material. INTRODUCTION Several years ago a series of waterflooding tests was made in the laboratory on a number of Woodbine core samples from the East Texas field. These samples had been stored in containers open to the air and were extracted with organic solvents before they were subjected to the laboratory tests. After water flooding, the residual saturation of kerosene, which was the oil used in the tests, was found to average about 30 per cent. This saturation was higher than expected. In investigating the circumstances which might have been responsible for such a high residual oil saturation, attention was given to possible changes in wetting properties of the rock brought about by the procedure employed in extracting the cores. Preliminary results indicated that the explanation for the high residual oil saturation lay in the wetting behavior of the cores, though what effect extraction had on this behavior was not clear. In consequence, the work described in this report was undertaken in an attempt to investigate the mechanism responsible, and to ascertain the actual residual oil saturation to be expected in the reservoir after water flooding. It was soon found that there were profound differcnces in the behavior of so-called "fresh cores" from the East Texas field and of the same cores after extraction with organic solvents. These differences were evident not only in the amount of residual oil left after water flooding, but also in the saturation of watet remaining in the core after displacement by oil. The complete explanation of this behavior is not yet apparent. The description of work and results described in following sections, therefore, must be considered as an interim report presenting facts which must await additional information before they can be fully interpreted.

Jan 1, 1956

By G. A. Croes, N. Schwarz

This paper reports the results of a series of model displacement experiments carried out for measuring the efficiency of the water-drive process. This series forms a continuation and extension of that described by Engel-herts and Klinkenberg. Detailed information has been obtained on the influence of the oil/water viscosity ratio. The results are represented in the form of a diagram from which both the oil recovery and the water/oil ratio can be easily read off as a function of the total production (oil plus water) for all values of the viscosity ratio M between I and 500. These resu1ts are viewed in the light of the two existing theories on water flooding, viz. that of Buckley and Leverett and that of Dietz. It is shown that if the Buckley-Leverett theory applies, the relation between the relative permeability ratio and saturation, which plays a major role in this theory, (.an be calculated with a high degree of accuracy from the results of the model experiments. Dietz's theory is found to be in agreement with the experimental results in a certain range of circumstances. A discussion of the physical background of the Buckley- Leverett and Dietz theories makes it clear why the latter fails to agree with some of the experimental results. INTRODUCTION For an economical exploitation of oil fields both a rational control of natural (primary) recovery processes and a proper application of artificial (secondary) recovery methods are essential. These require detailed information upon the dependence of the relevant flow processes on the variables by which they are governed. Three methods are available for obtaining this information: (1) (statistical) analysis of actual field data; (2) appropriately scaled model experiments; and (3) mathematical analysis of the physical problem. If sufficient data were available, the first method would, in principle, be the most reliable one, although it has the drawback that the basic relationships between the variables involved are to a large extent obscured by the natural inhomogeneities of most reservoirs. The most profitable procedure seems to be: (a) determining the fundamental relations for idealized reservoirs by methods (2) and (3); (b) checking the consistency of the results obtained by these two methods; and (c) establishing the range of applicability of these methods to actual reservoirs by comparison with the data accumulated under (1). In this paper items (a) and (b) are dealt with for the case of homogeneous loose sands initially saturated

Jan 1, 1956

By K. Burke, G. Zhan, A. Mayer

A cover with capillary barrier effects (CCBE) is being constructed on the AA Leach Pad at the Barrick Goldstrike Mine site near Carlin, Nevada. The purpose of the cover is to eliminate/minimize infiltration of meteoric waters into the leach pad. Laboratory and numerical analyses indicate that Carlin Formation siltstone (TCS), a locally available material, has the necessary hydrologic characteristics when placed on the leach pad to act as a CCBE. A pilot study has been conducted on a small-scale test cover placed on the AA Leach Pad to examine the cover performance under irrigated conditions. The preliminary test results demonstrate that the designed cover is capable of preventing meteoric water infiltration.

Jan 1, 2001

By Haartti J

Generally when equipment is chosen for solving a dewatering problem, the equipment is based on one of following physical methods: gravity (sedimentation, screens), vacuum (vacuum drum and disc filters, belt filters), pressure (filter presses, hyperbaric filters) and centrifugal forces (centrifuges). The choice of method and type of equipment depends, among other things, on the requirements on the maximum water content allowed in the filter cake and on the particle size distribution and the concentration of solids in the material to be dewatered. All the above-mentioned equipment has its benefits and drawbacks. The conventional vacuum filters of drum or disc type are of a simple construction with few parts to be replaced, but these filters produce a filter cake with a fairly high moisture content, and a dryer is required for additional drying. In most cases the use of pressure makes it possible to produce filter cakes with the desired moisture content but the equipment is of complicated construction, leading to high maintenance costs . In addition to this the consumption of compressed air is high. The capillary filtration to be described in this article is a dewatering method which combines the benefits of both the conventional vacuum disc filter and the filter press. The capillary filter produces low cake moistures with a machine of very simple construction similar to that of the vacuum disc filter.

Jan 1, 1993

By Frederick Tickell

PETROLEUM engineers are displaying considerable interest in those fundamental properties of matter and energy that control the phenomena of oil and gas production. The subject is a difficult one to investigate by laboratory experiments for two reasons: (1) it is impossible to reproduce in the laboratory the scale of forces and dimensions that exist in the underground reservoir; (2) if we attempt to scale down the dimensions we are unable to reduce all proportionally. It is as if we tried to construct a model blast furnace for the reduction of iron ore, and reduced all lineal dimensions. We should find that the interstices between the miniature chunks of ore would not .permit rapid transfer of gases, that combustion and heat transfer would not take place as in the full size furnace and that, in short, the contraption would not work. Just so, when we attempt to make a reduced scale oil field we find we must have, not only miniature reservoir and miniature wells, but "miniature" sand, oil, gas, etc. Much valuable work, however, has been done along these experimental lines and more will no doubt follow, but investigators should bear this point in mind and strive to attain dimensional homogeneity and dynamical similarity in order that their conclusions may be translated into terms applying to the oil reservoir. As Gibson says,1 "These conditions are attained when all terms of the physical equation have the same dimensions, . . . when all corresponding particles of the two systems trace out similar paths and when the velocities are such as to make all corresponding forces acting on two such particles in the same ratio. It is the purpose of this paper to discuss the mechanics of fluid movement as it pertains to the oil pool and to point out the complexity of the laws of fluid delivery under the conditions often found.

Jan 1, 1928

By Frederick G. Tickell

Petroleum engineers are displaying considerable interest in those fundamental properties of matter and energy that control the phenomena of oil and gas production. The subject is a difficult one to investigate by laboratory experiments for two reasons: (1) it is impossible to reproduce in the laboratory the scale of forces and dimensions that exist in the underground reservoir; (2) if we attempt to scale down the dimensions we are unable to reduce all proportionally. It is as if we tried to construct a model blast furnace for the reduction of iron ore, and reduced all lineal dimensions. We should find that the interstices between the miniature chunks of ore would not permit rapid transfer of gases, that combustion and heat transfer would not take place as in the full size furnace and that, in short, the contraption would not work. Just so, when we attempt to make a reduced scale oil field we find we must have, not only miniature reservoir and miniature wells, but "miniature" sand, 011, gas, etc. Much valuable work, however, has been done along these experimental lines and more will no doubt follow, but investigators should bear this point in mind and strive to attain dimensional homogeneity and dynamical similarity in order that their conclusions may be translated into terms applying to the oil reservoir. As Gibson says,' "These conditions are attained when all terms of the physical equation have the same dimensions, . . . when all corresponding particles of the two systems trace out similar paths and when the velocities are such as to make all corresponding forces acting on two such particles in the same ratio." It is the purpose of this paper to discuss the mechanics of fluid movement as it pertains to the oil pool and to point out the complexity of the laws of fluid delivery under the conditions often found. We have to do, fundamentally, with confined fluids, possessing potential energy whose expenditure is restricted by certain properties of the confining media and of the fluids themselves. The equation of motion and time is completely stated when we can assign values to the propulsive

Jan 1, 1929

By John K. Hammes

This paper has been written as one of a group of papers dealing with the subject "Cost Elements in Mining". What are cost elements in mining? The mine operator thinks of direct mining costs in terms of labor, materials, supplies and power, and we might define cost more generally as the price paid to acquire or produce something. Economic theory also has its concepts of cost. From one point of view, that of the consumer, the cost of mineral commodities might be viewed as the total price industry pays for mine output. Similarly, the mining company engaged in the on-going business of finding, developing and operating new mines is concerned very much today with the distribution of all the revenue paid for mine output and not just with its direct or controllable cash costs. In other words, what will the labor force, the supplier of energy, explosives, and reagents, and the supplier of government services, management, capital and the ore reserves receive for their contribution to production.

Jan 1, 1974

By Leo Wolrnan

IN the relations that exist between capital and labor in this country, there is a bright as well as a dark side. After many years of distressing conditions of labor and a plentiful supply of propaganda, it is doubtful that the doctrine of the class struggle, however defined and stated, has been embraced by any influential and numerous elements of our population. Extreme and uncivilized methods of conflict, whether they be the labor spy as used by the employer or the sit-down strike by organized, labor, have come to be abandoned as the result of the pressure of sober and distinterested public opinion. Unwise terms of our law of trade unions and the unbridled zeal of its administrators show some slight signs of being revised in the light of 'experience and the protests of the law's own beneficiaries. At the point where labor policy touches economic conditions, the two powerful factions in the American labor movement appear to look with a less friendly eye on the bewildering succession of economic experiments and to have a deep nostalgia for a simpler and more prosperous economy.

Jan 1, 1938

Background information, formulae and a systematic set of procedures for estimating capital and operating costs for open pit mining equipment are presented in this paper. Firstly, equipment capital costs are required. These can be obtained from either suppliers, contractors or from first principles. The equipment is then divided into cost elements. Typically these are fuel and power requirements, spare parts consumption, wear items such as tyres, teeth and drill bits and finally repair and operating labour requirements. By consideration of the cost and life of each element a base cost can be derived. The base cost is then adjusted to suit specific site conditions such as the proximity to spare parts suppliers, the duty or ground conditions and the management and operator skills specific to the site. Hence, the same item of equipment can be costed to reflect different operations. Included are tables and data for typical plant items. Several examples are also given to illustrate the methodology being presented. The intention is to provide a set of procedures to allow costs to be built up from base level in a systematic and repeatable way. Applications for these costs include feasibility studies, budgetting and data for economic analyses.

Jan 1, 1990

The United States Bureau of Mines is establishing a computerized mineral inventory system to help the Federal Government appraise its mineral position and prepare programs insuring against critical shortages of materials. This system, called the Minerals Availability System (MAS), is a component of the Bureau's minerals intelligence function designed to conduct and maintain an inventory of minerals important to the Nation. The MAS defines the physical and commercial availability of the mineral resources. Known resources are evaluated and classified by deposit for entry into a computer storage and retrieval system. An integral concern of these evaluations is the cost of mining and beneficiating the ore contained in specific deposits. To meet this concern, a cost handbook was developed as an aid to preparing feasibility-type estimates for capital and operating costs of mining and primary beneficiation of various types of mineral occurrences. Cost data, obtained from U.S. and Canadian companies, were used as the basis of this handbook. The handbook presents cost curves and equations for each component of the mining and beneficiation process. Factors for each cost component are also given, thereby allowing the updating of cost for time, geographic location, labor rates, and mining and milling conditions. Included in the latter conditions are items such as the length of haul, need for rock bolts, and a rock work index for ores and rocks of various hardnesses. 1.2. USE OF THE HANDBOOK Using the handbook a feasibility-type estimate falling within 25% of expected actual cost is obtainable by summarizing cost components. This handbook should not be used to determine the cost of any single component of a mining or beneficiation system, as any single component may not fall within the 257 limit. It must be understood that anyone who uses the handbook must have a comprehensive knowledge of mining and processing technology and cost estimating procedures. The handbook was intended to be used internally by the Minerals Availability System. Because

Jan 1, 2012

By Dr. O’Neil Thomas J., Donald W. Gentry

The greatest of all gifts is the power to estimate things at their true worth. LaRockefoucauld INTRODUCTION The primary reason for performing a feasibility study on a proposed mining venture is to investigate all phases of the proposal in as much detail as necessary to justify either dropping the project or continuing expenditures through the next stage. The economic evaluation component of the feasibility study, therefore, must ultimately be based on information which provides an answer to the question, "What is it going to cost?" Unfortunately engineers preparing feasibility studies never have all the engineering or economic information they would like or need. Consequently, the economic portion of the analysis can only be performed if estimates of the various costs associated with the project are made. Project cost estimates, in turn, require estimates of all the physical factors affecting cost components, including anticipated performance of plant and equipment as well as all pertinent geologic, mineralogic, and metallurgical variables. Before useful cost estimating procedures can be applied considerable data must be collected, compiled, and organized. Preparatory work typically includes organization of cost data available for estimating purposes, development of techniques for updating historical costs, and establishing methods of forecasting prices and costs over the duration of the project. Cost estimates for mining and mineral processing projects involve so many features and variables that it is absolutely essential to have some means by which the vast amount of detail can be organized. It is very important to identify, in as much detail as possible, all the cost data available (historical and developed) to the estimator. These costs, after being properly identified in detail, should be com- piled, stored, updated regularly, and made readily available for use in developing new cost estimates Accessing files of current cost information requires a standardized numerical system of classifying cost data. When uniform definitions and procedures are used, every project record contributes to the common store of estimating data.

Jan 1, 1984

By Andrew L. Mular, K. K. Humphreys

Introduction Estimates performed on potential future plants must by their very nature be either order-of-magnitude or budget (preliminary) estimates. Of the three types of estimates recognized by the American National Standards Institute (ANSI Standard Z94.2), order-of-magnitude and budget estimates are the least accurate. Order-of-magnitude estimates have an expected accuracy of plus 50 percent to minus 30 percent. In other words, it is anticipated that actual project cost will be no more than 50 percent above the estimate and no less than 30 percent below the estimate. Budget estimates, or preliminary estimates as they are often called, have an expected accuracy of plus 30 percent to minus 15 percent. The reason that greater accuracy cannot be expected in performing estimates on proposed new facilities is simply that insufficient data is generally available to permit performance of a highly accurate estimate. As stated in ANSI Standard Z94.2, a definitive estimate, i.e., an estimate with an expected accuracy of plus 15 percent to minus 5 percent," . . is an estimate prepared from very defined engineering data . . . (including). . .as a minimum, fairly complete plot plans and elevations, piping and instrument diagrams, one line electrical diagrams, equipment data sheets and quotations, structural sketches, soil data and sketches of major foundations, building sketches and a complete set of specifications." In other words, the engineering of the project must be fairly well underway to permit a definitive estimate to be performed. Such is the case only after the construction decision has been made, all potential alternatives evaluated, and major expenditures committed for a particular course of action. This situation is beyond the scope of this chapter. The chapter is directed to comparison of various technological alternatives for which site specific engineering data is not generally available. Accordingly, such comparisons can be made only by utilizing preliminary or order-of-magnitude estimating techniques.

Jan 1, 1982

By G. A. Kordosky

Solution mining followed by solvent extraction-electrowinning (SX-EW) is one possible way to economically extract copper from ore bodies which cannot otherwise be profitably exploited. Published costs for the unit processes of SX and EW are out of date especially in view of the newer reagents now available and the newer circuit configurations, This paper updates the costs for SX-EW in 1985 dollars and also discusses some of the trade-offs which must be made when designing an SX-W plant.

Jan 1, 1986

By Daniel K. Dysinger

Capital resource budgeting is the way managers of publicly held companies fulfill their fiduciary responsibility to maximize the wealth of stockholders. Managers maximize shareholder wealth by allocating investment capital to the most productive of competing alternative projects. Managers do this in a manner that maximizes the net present value of the firm's future cash flow. The techniques of cash flow analysis are the primary tools available for selecting a corporate portfolio of projects that meets or exceeds the rate of return expected by shareholders. The reliability of cash flow analysis hinges on the ability of managers to forecast the future values of individual components of cash flow. The accuracy and reliabil¬ity of forecasting determine the soundness of capital investment decisions and, ultimately, determine the value of the firm.

Jan 1, 1997

By D. K. Dysinger

Capital resource budgeting is the means by which managers of publicly held companies fulfill their fiduciary responsibility to maximize the wealth of stockholders. Managers maximize shareholder wealth by allocating investment capital to the most productive of competing alternative projects in a manner that maximizes the net present value of the firm's future cash flow. The techniques of cash flow analysis are the primary tools available for selecting a corporate portfolio of projects that meets or exceeds the rate of return expected by shareholders. The reliability of cash flow analysis hinges on the ability of managers to forecast the future values of individual components. The accuracy and reliability of forecasting determine the soundness of capital investment decisions and, ultimately, determine the value of the firm. The present paper will explore tools for forecasting the spot market price of a commodity, silver, to demonstrate the difficulty and uncertainty involved in forecasting the future. The commodity price is only one of a number of components of the cash flow equation. Each component has a unique and uncertain future and must be individually analyzed and forecast to arrive at a robust cash flow model.

Jan 1, 1997

By R. J. Balfour, T. L. Papucciyan

"INTRODUCTIONCapital Cost considerations are basic to feasibility in the achievement of success for Mineral Processing Projects as much as or more than in many other industries. Capital cost is an important factor ae it 1R the unit of measurement for process engineering economic decisions. As a result of ever increasing complexity, alternatives of process and remoteness of site, there is an ever increasing emphasis on accurate estimating and the attendant cost control systems in the international market of today for the Mineral Industry where initial plant costs are becoming a more important factor than operating costs. An undervaluation means trouble ahead. An over-cautious assessment may bring an unnecessary abandonment of a project. Consequently, the ultimate cost must be predicted early and accurately and must be controlled to this parameter during the design and construction phases. Cost Est!~ mating is one of a variety of project management tools used to assist in planning and achieving the optimum balance between Quality, Cost and Time, the eternal triangle of evaluation, namely obtaining a project of acceptable quality at minimum cost and on time. In order to attain these established objectives, proper planning, organizing, coordinating, monitoring, adjusting and controlling the design, procurement and construction elements of the project are essential.This project management approach based upon the principle of a Task Force under single management, comprising a complete service organization, requires a substantial number of qualified individuals specialized in their own field and capable of working together as a team to perform their various functions effectively. The Task Force is supported by their chiefs of discipline and performs in accordance with established procedures and standards under the leadership of a Project Manager.General Engineering Company Limited with the backing of the full resources of Surveyer, Nenniger & Chenevert and its total staff of approximately 1,0009 offers the complete project management service to the Mineral Processing Industry of North America and the rest of the world. As mine sites become more remote and difficult of access, the need for an experienced team of specialists who work under the Task Force principle, with well established standards and procedures becomes even more important. Our long history of successful pro1ecta in this field has been our training ground for the fulfillment of this need."

Jan 1, 1972

By Frederick G. Coqueron, Joseph E. Pogue

FOR a number of years, the Department of Petroleum Economics of The Chase National Bank has been conducting a study of the capital employed in the petroleum industry. The technique followed is that of combining and summarizing the available financial and operating data for a group of thirty representative oil companies, doing about two thirds of the domestic business of the entire industry. This paper presents the results of the findings for the year 1943, and supplements the survey, "Sources, Disposition, and Characteristics of the Capital Employed by Thirty Oil Companies During the Nine-Year Period, 1934-1942," presented before the Petroleum Division of the American Institute of Mining and Metallurgical Engineers on Feb. 24, 1944, and also published as a pamphlet by The Chase National Bank.

Jan 1, 1944