Search Documents

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 T. B. Acton

There are two types of ore transportation systems in use at Newmont's Magma Copper Co. San Manuel mine in Arizona-rail-mounted, box-type rotary cars and the newer rail-mounted, bottom-dumping ASEA cars. Though the cost per car for the ASEA units greatly exceeds the cost per rotary car, the advantages of the ASEA units, including much faster dump times, have made the ASEA system a successful alternative at the San Manuel mine. The rotary system of ore transportation has been in use at San Manuel since production began in 1956. The system employs 7.9-m3 box-type cars to transport ore by rail to shaft pocket areas. A rotating dumping mechanism turns three cars at a time upside down to empty them, and returns them to an upright position. Trains of 15 cars each are dumped in about six minutes. Each 15-car train is pulled by an 18-t rated trolley locomotive. There are about 400 rotary cars in service at San Manuel and the system is used for the majority of ore haulage. This well-proven rotary method was instrumental in achieving the December 1977 world record of 272 Mt hoisted from an underground copper mine. Magma Copper Co. began using ASEA cars in late 1977. Designed by ASEA of Sweden, the cars are built for San Manuel by Kasper-Hall Manufacturing Co. in Tucson. The cars basic design feature is a hinged floor that opens at the side as the car is pulled through the dump. As it passes over the dump, a fifth wheel attached to the hinged floor (opposite the hinges) travels along a rail in the dump. This rail dips down into the pocket and then returns to track level. As the fifth wheel travels along the rail, the car floor opens, the car dumps, and the floor is then returned to track level. As the car is dumping, the body remains suspended over the pocket by wheel rollers attached to each side of the dump. Trains of 10 cars each are emptied in about 45-50 seconds. Each ASEA train is pulled by an 18-t rated trolley locomotive, adapted at San Manuel to allow it to pass through the ASEA dump. At minimal cost, "wings" are welded to each side of the locomotive. These wings suspend the locomotive over the pocket as the train passes through the dump. Advantages of the ASEA System Major design characteristics of the ASEA and rotary systems are shown in the accompanying table. The comparison points out some of the following advantages demonstrated by the ASEA system. • Faster dumping-An ASEA train dumps in 50 seconds, while a rotary train takes at least six minutes. There is no stopping or starting when dumping an ASEA train. The train enters the dump area, dumps, and leaves in one continuous motion-in contrast to rotary trains which must stop and start five times to dump. With the rotary system, three cars are spotted in the dump mechanism by remote control. When the cars are in place, the train operator activates the dump, the cars are turned over, and then returned to an upright position. This process is repeated until all 15 cars in the train are emptied.

Jan 4, 1980

By H. Salamanca

The electric operation and design features of the 11.000 H.P. variable speed SAG mill gearless drive is presented. The function of the frequency converter, control system drive and lubrication systems are described. An analysis of the harmonic characteristic in the Supply System and Motor is presented, and the dynamic development of the stator current, speed and the magnetic flux in the start-up process of the drive is evaluated. Besides, the most important aspects in the commissioning and maintenance of the drive are analyzed.

Jan 1, 1991

Collecting the clay fraction of active stream sediment from a flowing stream for geochemical analysis i a difficult process. One either takes a sample of dry fine-grained sediment from the stream bank (dry weather and dry sample are uncommon in parts of New Zealand and Tasmania), or dredges up a sample of sand and mud out of the stream.The latter method produces a soggy ample bag full of mud and sand, with varying amounts of gravel, depending on the size of the stream. The water can be filtered from such a sample by means of a Buchner filter funnel, but is difficult to obtain a vacuum in the bush. This problem can be solved by using a small hand- queeze bellows such as used in priming petrol pumps on outboard petrol motors. The common laboratory hand bellows is not powerful enough.A 70 mm diameter two-piece polythene Buchner filter funnel (Fig. 1) can be used. A length of rubber tubing is fitted around the inlet valve of the hand bellows and this valve is then jammed into the pipe at the bottom of the filter funnel (the polythene pipe may be trimmed with a knife to fit over the inlet valve of the bellows). The vacuum is generated and maintained by squeezing the hand bellows.The technique of collecting a sample of the clay fraction is to dredge a sample of the fine-grained active stream sediment out of the stream with a container, such as a plastic mug. The sample is agitated to get the clay fraction into suspension and the muddy suspension is then decanted into the Buchner funnel. The desired clay fraction is obtained as a thin film on the filter paper.If the "fines" are also required, a filter of nylon bolting cloth (stretched across the mouth of a short length of 80 mm diameter polythene pipe and attached by rubber bands or a concentric polythene pipe) can be placed over the mouth of the Buchner funnel and the whole sample of stream sediment...

Jan 1, 1969

By Sanjeeva Latchireddi

"Deteriorating ore grade and high demand of metals has tremendously influenced the unit capacity of SAG mills. Pebble circuits have been added to the existing SAG circuits to increase their unit capacity. To make the pebble circuits justifiable, the grate openings are increased almost to 4.5 inches to draw large quantity of pebbles. The inherent transportation problems associated with SAG mills in closed circuit with pebble fraction are more complicated than the single stage SAG mill operation, because the coarse pebbles behave significantly different to that of slurry in pulp lifters. In addition, operation of mills at higher speed, to take advantage of precise design of high release angled shell lifters significantly reduces the discharge efficiency of the conventional pulp dischargers. The presence of a sizable quantity of pebbles in the pulp lifter limits the space available and reduces the flow gradient through the grate thus increases the load inside the mill and hence the mill power-draw. This paper analyses all the problems associated in discharge of slurry and pebbles in SAG mills with pebble circuits. The Outokumpu patented Turbo Pulp Lifter (TPLTM) aims at eliminating the inherent material transport problems to ensure good grinding conditions. Recent installation of TPLTM in a 26-ft SAG mill has proven these claims by reducing the specific power consumption while increasing the mill capacity.INTRODUCTIONThe conventional wisdom is to look at the semi-autogenous grinding (SAG) mill as just another grinding mill in which ball charge, mill filling, and mill speed are varied to attain maximum throughput. Liner design for the SAG was also approached more from a wear perspective rather than a metallurgical and hydraulic-flow perspective. The extensive research work carried out by Latchireddi and Morrell (1997,2003a and 2003b) has demonstrated to think of the SAG as more of a pump in which the grates and pulp discharger end (“impeller”) were designed to efficiently discharge the product sized particles smaller than the grate size with minimal recirculation out of the mill.The rock load in the mill is essentially depends on ore characteristics and the discharge rate of broken particles. The discharge rate of the product material depends on how efficiently the discharge pump (grate and pulp lifters) is operating. Similar to the impeller design affecting the pump capacity, the pulp lifter design affects the discharge capacity (or mill throughput) of the SAG/AG grinding mills. The general arrangement of AG/SAG mills discharge system is shown in Figure 1."

Jan 1, 2007

By Kevin R. Burns, William A. Depree, John J. Jansky

This paper presents some of the work associated with the reduction of employee exposure to diesel and blasting contaminants at an underground salt mine. The purpose of the paper is to outline the procedures recommended in resolving the problems associated with these contaminants. The first stage consists of a complete mine ventilation survey. The purpose of the survey is to identify any problems in the mine. The survey consists of air quality, air quality and ventilating pressure measurements taken throughout the mine. After completing the survey, the information is analyzed to identify problem areas and the possible causes. All available solutions to reduce the levels of contaminants are then explored and evaluated for feasibility. The PSU Mine Ventilation Simulator is then used to accurately simulate possible changes to the ventilation system. These ventilation projections are a useful tool to illustrate to the company and union personnel the possible benefits of various ventilation changes. This paper will illustrate the phases involved in making important and sometimes expensive ventilation decisions. Through the cooperative efforts of MSHA, company and union personnel, the levels of contaminants have been reduced by approximately 200 percent. As a result of these ventilation improvements, the company can now safely increase production approximately 25 percent.

Jan 1, 1987

By J. J. Bodmer

Although the similarity between puzzolana, or trass, and blastfurnace slag, as seen by comparison of the analyses, is a well-known fact, blast-furnace slag has not been used commercially as a substitute for those cementing materials. The reason, the writer apprehends, lies in the fact that unless such slag is disintegrated or subdivided by rolls, the process must either be too costly, or the material is not in a fit and proper condition for the purpose. In order to produce a reliable slag cement, the slag must be ground together with the lime into an impalpable powder. The subdivided slag must, therefore, be perfectly dry, and, at the same time, friable. The stronger the hydraulic properties of the lime, the more reliable the slag cement will be, and practice has proved, that the slag from a gray-iron furnace gives the best results. The slag cement which has given the results shown in the annexed table, under pressure tests, was composed of six parts of slag, from a blast-furnace producing No. 3 foundry iron, and one part of lime, of medium hydraulic properties. The above-described class of cement bears storing as long as most Portland cements, and the cheapness of its production is self-evident.

The American Federation of Labor adopted 'the following resolution at its Atlantic City convention: "WHEREAS, scientific research and the technical application of results of research from a fundamental basis upon which the development of our industries, manufacturing, agriculture, mining, and others must rest; and WHEREAS, the productivity of industry is greatly increased by the technical application of the results of scientific research in physics, chemistry, biology; and geology, in engineering and "agriculture, and related sciences; and the health and well-being not only of the workers but, of the whole population as well, are dependent upon advances in medicine and sanitation; so that the value of scientific advancement to the welfare of the nation is many times greater than the cost of the necessary research; and WHEREAS, the increased productivity of industry resulting from scientific research is a most potent factor in the ever-increasing struggle of the workers to raise their, standards of living, and the importance of this factor must steadily increase since there is a limit beyond which the average standard of living of the whole population cannot progress by the usual methods of re-adjustment, which limit can only be raised by research and the utilization of the results of research in industry;. and

Jan 8, 1919

By J. J. Bodmer

ALTHOUGH the similarity between puzzolana, or trass, and blast-furnace slag, as seen by comparison of the analyses, is a well-known fact, blast-furnace slag has not been used commercially as a substitute for those cementing materials. The reason, the writer apprehends, lies in the fact that unless such slag is disintegrated or subdivided by rolls, the process must either be too costly, or the material is not in a fit and proper condition for the purpose. In order to produce a reliable slag cement, the slag must be ground together with the lime into an impalpable powder. The subdivided slag must, therefore, be perfectly dry, and, at the same time, friable. The stronger the hydraulic properties of the lime, the more reliable the slag cement will be, and practice has proved, that the slag from a gray-iron furnace gives the best results. The slag cement which has given the results shown in the annexed table, under pressure tests, was composed of six parts of slag, from a blast-furnace producing No. 3 foundry iron, and one part of lime, of medium hydraulic properties. The above-described class of cement bears storing as long as most Portland cements, and the cheapness of its production is self-evident.

Jan 1, 1874

INTO their great Pacific Northwest counting house went the members of the Industrial Minerals Division recently, to count their blessings amidst the scenic grandeur and mineral wealth of the State of Washington. From their vantage point in Seattle, those who attended the IMD's fourth Pacific Northwest meeting turned their sights to the South and Southeast, scanned Montana, Idaho, Oregon and Utah, and predicted a very healthy economic future for their region. The praises of Idaho's booming phosphate industry were sung by Earl W. Murphy, secretary of that State's Chamber of Commerce. He said the establishment of Fort Hall, on the banks of the Snake River near Pocatello, first turned the eyes of the world toward what is now the center of the greatest known deposits of phosphate rock-the section adjacent to the common corners of Idaho, Wyoming and Utah. With the founding of Fort Hall, Mr. Murphy said, historians will also rank the construction of the first electric furnaces for the production of elemental phosphorous as equally significant in the commercial history of the West. Those furnaces were installed only last year by the Westvaco Chemical Div. of the Food Machinery & Chemical Corp. at Pocatello, at a cost of $8 million.

Jan 7, 1950

Minute of the Board of Directors, Jan. 26, 1917 In the name of all the members of the American Institute of Mining Engineers, this Board extends to. Mr. Herbert C. Hoover, an honored Vice-President of the Institute, on the occasion of his present temporary return to his native land, the cordial welcome of his colleagues, and their congratulations upon the noble work splendidly done by the Commission for Relief in Belgium of which he is the head. It is understood that a leading purpose of Mr. Hoover's visit to America at this time is the collection of additional funds, to be administered by his Commission in the care of the destitute children of Belgium. To this enterprise endorsed by both the belligerent parties, as well as inspired by the purest and tenderest sentiments of humanity, contributions are solicited from engineers, especially through an organization known as the "Belgian Kiddies Limited," which this Board, heartily approving its object and method, recommends to the consideration of the members of the Institute. On motion duly seconded it was unanimously VOTED.-That this minute be spread upon the record of the Board, and published in the Bulletin, and that a copy thereof be transmitted to Mr. Hoover, and to the San Francisco Section of the Institute.

Jan 3, 1917

By C. C. Johnson

In the fourteen years that Rössing Uranium Limited has been in production, the metallurgical operations and controls on the leaching plant have evolved through four basic stages. Initially, the emphasis was placed on the achievement of consistent plant operation by overcoming severe startup difficulties. The second stage involved the attainment of the design operating targets, and also the commissioning of the ferric-leaching reactors in order to achieve a ferric ion concentration of more than 3,0 g/l. Improvements in control then became the priority, with the emphasis on consistently achieving the target concentrations of ferric ions, total iron, and terminal acidity. The latest phase has concentrated on the optimization of costs by means of adjustments to the historically established operating parameters in order to achieve large savings on consumables while maintaining the leaching efficiencies. Apart from the obvious incentive of reducing costs in an inflationary economy and a depressed uranium market, impetus for this work was given by a change in the type of ore from the open pit, which has the effect of reducing the extraction efficiency while increasing the consumption of consumable materials. These problems and their solutions are discussed in detail, and the importance to cost-effective optimization of an accurate, up-to-date cost-reporting structure is stressed.

Jan 1, 1990

By M. U. Ozbay, D. R. Lougher

An in-situ experimental programme was carried out to improve the understanding of the rockmass and pillar behaviour in moderately deep hard-rock mines. The experiments were carried out at Impala Platinum mines and consisted of precise levelling measurements in the footwall of the reef, stress measurements in pillars, convergence measurements in the stope, and petroscope observations in pillars. The results were analyzed using a computer program in an attempt to quantify the characteristic behaviour of the rockmass as well as the pillars. The measured off-reef displacement data were found to co11fonn to the trends obtained from elastic modelling and the correlation could be improved by modelling the small pillars with reduced modulus to simulate yielding' of the pillars. The stress strain curve obtained from analyzing the in situ results, showed that a 6x 3 xl m pillar yields without significant load shedding at peak stress levels of approximately 208 MPa. The closure measurements confirmed that the mechanism of yielding is mainly that of pillars punching into the foundations. Slight to moderate sidewall fracturing and slabbing might be contributing to yielding, but to a much lesser degree than the former mechanism, as the petroscope observation revealed the existence of an intact region beyond 0,6m from the pillar sides.

Jan 1, 1995

By Oliver B. Hopkins

During the year 1936, a new high record was established for Peruvian production, the total amounting to 17,594,689 bbl., which brought the cumulative production of the country up to 205 million barrels. The 1936 figure represents an increase of 530,288 bbl. over that of 1935. The property of the International Petroleum Co. contributed 369,577 bbl. of this increase and the Lobitos property 158,233. Exploration work in the country was continued. The Selden Breck Co. examined a strip of the National Reserve in eastern Peru from Tambo del Sur to the Rio Pachitea. This company was granted a concession for a term of four years embracing approximately 50,000 acres near the confluence of the Rio Pachitea and the Rio Ucayali. During the year, the Peruvian Government commenced drilling a well on one of the reserved zones at Zorritos. At the end of the year, this well had reached a depth of 1300 feet. La Rrea-Parinas Estate.—Production on the La Brea-Parinas Estate of the International Petroleum Company, Ltd., reached an all-time high in 1936 of 15,126,491 bbl., an increase of 369,577 bbl. over the 1935 record. The total production from 1890 to 1936 was 163,668,014 barrels.

Jan 1, 1937

By E. T. Cox

WHILe engaged, in the year 1856, in determining the oil-bearing properties of some bituminous coals from Western Kentucky, by subjecting them to dry distillation in an iron retort, which held about a pint;, and to the neck of which were attached several bottles, for collecting the carbon oils, and washing and measuring the gas, I observed that there was a very great gain in the weight of coke thus made, over that obtained from the same coal when charred in a platinum crucible, as is usual in the laboratory for making the proximate analysis of coal. It was thought at the time that the increase of coke, by the former mode of treating the coal, was due to the pressure which the retarded gas exerted upon the solid carbon, and the possible fixing of a portion of the carbon from the volatile hydrocarbons. For the purpose of obtaining a more definite idea of the effects of pressure on the coking of coals, a series of experiments were made this spring under my direction, by my assistant, Dr. G. M. Levete. The results are highly instructive and full of interest, since they point out some peculiarities in the nature of bituminous coals which

By E. T. Cox

WHILE engaged, in the year 1856, in determining the oil-bearing properties of some bituminous coals from Western Kentucky, by subjecting them to dry distillation in an iron retort, which held about a pint, and to the neck of which were attached several bottles, for collecting the carbon oils, and washing and measuring the gas, I observed .that there was a very great gain in the weight of coke thus made, over that obtained from the same coal when charred in a platinum crucible, as is usual in the laboratory for making the proximate analysis of coal. It was thought at the time that the increase of coke, by the former mode of treating the coal, was due to the pressure which the retarded gas exerted upon the solid carbon, and the possible fixing of a portion of the carbon from the volatile hydrocarbons. For the purpose of obtaining a more definite idea of the effects of pressure on the coking of coals, a series of experiments were made this spring under my direction, by my assistant, Dr. G. M. Levete. The results are highly instructive and full of interest, since they point out some peculiarities in the nature of bituminous coals which

Jan 1, 1875

By T. D. Yensen

AT the symposium on gases in metals held at the Annual Meeting of the Institute in New York in February, 1933, a suggestion was made1 that the term "gases in metals" as now employed is unsuitable as descriptive of the substances usually involved in that term. The Executive Committee of the Iron and Steel Division thereupon appointed a subcommittee, composed of the authors of this paper, to study the "nomenclature involved in the general subject of gases in metals, including the name itself" and to report its findings to the Executive Committee. The subcommittee decided at once to discuss the subject with an "Advisory Council" composed of representative metallurgists, metallographers and analytical and physical chemists in the Pittsburgh district.2 As a result of conferences held by the subcommittee and with the Council, a report with recommendations was submitted to the Executive Committee at an open meeting on Oct. 5, 1933, during the National Metals Congress in Detroit. The report and recommendations were accepted, and the subcommittee was instructed to proceed with the dissemination of the report for the purpose of having its recommendation generally adopted either as it was or in a modified form as a result of further discussion.

Jan 1, 1934

By A. J. Barrett

Backfilling at Vaal Reefs during the experimental phase has been carried out using cyclone-separated tailings which are transported underground hydraulically by means of a borehole. The selected tailings are piped from the borehole to the stope and then, after the addition of a flocculant, deposited in place via single or multiple nozzles. The successful performance of the backfill/stope system relies not only on the actual quality of the placed material, but also on the effective operation of stope filling. The success of stope filling relates to the complex, time- dependent interaction of backfill, stope and barricade materials, and the transport and placement procedures used. A comprehensive laboratory testing programme was carried out on backfill materials at Vaal Reefs in conjunction with the experimental stope- filling operation. The range of testing techniques corresponds to the requirements of each stage of the backfilling process. Where necessary, new or alternative techniques were sought during the course of the experiment to satisfy and facilitate better understanding of the different processes. These techniques comprise both routine quality control testing and research-oriented testing. The laboratory testing techniques appropriate to each stage of the backfill process are briefly discussed. This paper presents the main conclusions of the study and identifies areas for further research.

Jan 1, 1988

By B. B. Zavoico

Considerable progress has been made during the past year throughout the Russian petroleum industry. Perhaps the most remarkable achievement is the execution of the programs set out by the Central Planning Bureau of the Department of Commerce. These programs have been increased twice during the past operating year, necessitating drilling the richest reserves, instead of developing gradually as originally planned. The fulfillment of the set-out programs during the past few years makes therefore the present five-year plan of considerable importance to the international oil statisticians in approximating actual supply conditions up till 1933. The production of all Russian fields increased by 14,200,000 bbl. as compared with the 1927-1928 operating year, while the next year's program anticipates a further increase of 15,700,000 barrels. It appears therefore that production for 1932-33 will total 187,000,000 bbl., or approximately double that of the operating year just closed. It is also evident that the old fields are counted upon to produce only about 67 per cent. of the total, the new fields, not yet discovered, to furnish the balance of 33 per cent. The Soviet oil leaders therefore are hoping to have new fields discovered and developed by 1932-33. However, as in the past wildcatting

Jan 1, 1930

A knowledge of the steady-state mass and energy requirements of a particular process is essential to a determination of the economic feasibility of that process. A predictive simulation technique can be of great value in this respect. A versatile computer program based on a fundamental thermodynamic approach has been developed for the prediction of process requirements. The equilibrium composition of a multiphase system is determined by the technique of free energy minimization. Energy-balance calculations are performed using the appropriate thermodynamic data for the chemical species present in the composite materials used. All models for the process units under consideration are written in modular form, the output being calculated from the input and the specified operating conditions. The computer program is written in such a way that it can be used easily by anyone familiar with the processes involved, even though he may have no previous experience with a program of this type. The program is structured so as to facilitate the varying of one parameter without any alteration to the others, thus simplifying the investigation of the effects of any parameters considered to be important. The program has the advantage of being able to compare existing and new processes on the same basis, namely from the ores to the molten metal.

Jan 1, 1987