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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 Ivan B. Cutler, Milton E. Wadsworth

Coprecipitation of anionic and cationic polyelectrolytes has been applied to flocculation of several mineral systems. Results obtained in a study of the flocculation of kaolinite and hematite suspensions of polycationic and polyanionic electrolytes are presented. Greatly increased settling rates were observed following precipitation of positive and negative polyelectrolytes on the surface of finely divided minerals in aqueous suspension. The ratios of polycationic to polyanionic electrolytes required to produce maximum sedimentation have been shown to correspond closely with the equivalence points obtained by light scattering studies of systems containing the positive and negative polyelectrolytes by themselves.

Aug 1, 1956

By Nelson P. Hulst

COMMITTEES. DULUTH.-Nelson P. Hulst, Chairman; J. B. Adams, W. C. Agnew, M. H. Alworth, C. W. Andrews, R. Angst, William R. Appleby, C. E. Bailey, G. G. Barnum, E. F. Bradt, Mylie Bunnell, George L. Cheesebrough, Peter Christen¬sen, F. A. Cokefair, T. F. Cole, C. A. Congdon, N. Cowling, George H. Crosby, M. D. Cullum, C. d'Autremont, Jr., H. L. Dresser, C. T. Fairbairn. Walter Fitch, F. L. Gilbert, J. T. Hale, G. G. Hartley, E. B. Hawkins, M. S. Hawkins, J. H. Hearding, Louis Hill, L. J. Hopkins, F. E. House, J. C. Hunter, 0. D. Kinney, J. W. Kreitter, E. J. Longyear, Alexander McDougal, W. A. McGonagle, A. M. Marshall, W. N. Merriam, T. D. Merrill, John Millan, P. Mitchell, Clarence Moore, Hon. Page Morris, C. H. Munger, Henry Nolte, W. J. Olcott, A. L. Ordean, Thomas Owens, F. A. Patrick, H. M. Peyton; D. M. Philbin, Capt. Charles Potter (U. S. A.), L. W. Powell, Harry Roberts, Louis Rouchleau, George A. St. Clair, J. U. Sebenius, Joseph Sellwood, Amos Shepherd, W. B. Silvey, George Spencer, George C. Stone, H. B. Sturtevant, George D. Swift, Kirby Thomas, C. D. Thompson, A. D. Thomson, G. A. Tomlinson, Charles Trezona, R. R. Trezona, Maj. J. H. Upham, Charles Van Barneveld, W. W. Walker, J. L. Washburn, A. C. Weirs, H. J. Wessinger, A. B. Wolvin, Dwight E. Woodbridge. HOUGHTON.-W. E. Parnall, Chairman; W. D. Calverley, Secretary; W. B. Anderson, L. S. Austin, Jacob Baer, William Bath, F. J. Bawden., Simon Beahan, John Been, C. H. Benedict, Walter Bloomfield, S. H. Brady, Samuel Brady, Henry Brett, A. L. Burgan, F. I. Cairns, W. H. Cake, Arthur L. Carnahan, William Carpenter, Phillip Carroll, John J. Case, T. L. Chadbourne, W. A. Childs, B. F. Chynoweth, Captain James Chynoweth, H. P. Clausen, F. G. Coggin, H. D. Conant, J. B. Cooper, J. R. Cooper, John Cuddihy, Thomas Cummings, Robert Davidson, J. B. Dee, J. R. Dee, T. S. Dee, Theodore Dengler, M. M. Dennis, Captain Thomas Dennis,. F. W. Denton, A. D. Edwards, R. M. Edwards, C. S. Fales, Daniel Fisher, Henry Fisher, James Fisher, A. L. Floeter, Frank H. Getchell, M. C. Getchell, W. M. Gibson, W. M. Gilliland, James G. Glanville, George Goodale, H. S. Goodell, A. R. Gray, Edward Grierson, Homer Guck, H. D. Haddock, Captain Josiah Hall, John L. Harris, Captain S. B. Har¬ris, Enos Harrold, F. William Hartmann, George L. Heath, C. M. Hoar, Thomas Hoatson, 0. P. Hood, Captain Thomas Hooper, Captain Joshua D. Husking, Dr. L. L. Hubbard, Arno Jaelinig, E. D. Johnson, G. A. Koenig, Edward Koepel, C. H. Krause, R. H. Leach, A. W. Leonard, James MacNaughton, Edward McCormick, Thomas McDonald, R. T. McKeever, F. W. McNair, James McRae, John Mackey, John C. Mann, Major G. A. Marr, Captain Thomas Maslin, Harry Mercer, James Merton, Michael Messner, William F. Miller, Captain J. Milligan, Dr. J. W. Moore, Charles H. Moss, H. F. Nickerson, Charles L. Noetzel, P. H. Paine, John Penrose, Captain John Pentecost, Graham Pope, R. C. Pryor, James Ramsay, J. T. Reeder, Allen F. Rees, J. H. Rice, W. G. Rice, James

Jan 1, 1905

By A. R. Denison

The area discussed in this report comprises a group of 38 counties lying in the northeast corner of Texas. It covers all, and extends beyond, the borders of what is commonly described as the East Texas Basin. It includes two major oil fields, Van and East Texas; two major gas fields, Bethany and Waskom; and a number of fields, both oil and gas, of lesser importance. All commercial oil production comes from beds of Upper Cretaceous age and almost exclusively from the basal member, the Woodbine sand. Gas is produced from both Upper and Lower Cretaceous beds with the newer production from the older beds. East Texas Field This field continued as in 1932 and 1933 to dominate the drilling and production situation throughout the oil business. A total of 3681 producing wells was completed in this field during 1934. This is an increase of 1215 over the 2466 producers completed during 1933. Total wells

Jan 1, 1935

By Martin G. Castro, Renato G. Bautista, Morton Smutz

During the last 25 years, multistage mixer-settlers have been used extensively for liquid ion exchange work. The mixer-settler has the advantage of being a compact device in which a large number of stages can be assembled in a relatively small area. They are particularly advantageous for the separation of rare earths. Most of the adjacent rare earths have separation factors which are near one, which means that a large number of stages are needed to produce a good separation. When two elements (m, n) are extracted simultaneously, the separation factor (ßm, n) is defined as: [ ] where Ym, Yn are the molarities of the respective elements in the organic phase and Xm, Xn, are their molarities in the aqueous phase at equilibrium. The industrial consumption of rare earth oxides rose to over 6800 tons in 1968, an increase of 33% over 1967.1 The increased production and demand for rare earth and lanthanum chlorides for petroleum cracking catalysts was one of the principal factors in this increased consumption of rare earths. In 1968 approximately 59% of the rare earth oxides produced were used for gasoline cracking catalysts in the form of rare earth and lanthanum chlorides. There was also an increase in the sales of lanthanum oxides for use in optical lenses and in fiber optics. The future looks good for the rare earth industry. The rare earths can be expected to be used in many new products which are being developed. Until the late 1950's tributyl phosphate (TBP) was the principal solvent used in rare earth liquid ion exchange. In 1957 Peppard3 reported the use of di (2-ethyl-hexyl) phosphoric acid (D2EHPA) as a solvent for separating the rare earths. Rare earth separation factors of up to 2.5 were obtained in nitrate and chloride systems while the maximum separation factor using the

Jan 1, 1972

By Richard A. Kesler, W. Michael Reed

Grindability or resistance to fine comminution is the fundamental issue involved in the application and sizing of grinding mills. Over the years, many theories for determining the amount of energy required for size reduction to a specified fineness have been proposed. The first published theory, introduced by P. R. von Rittinger in 1867, stated that the energy required for crushing or grinding is proportional to the increase in surface area produced. The surface area of a ton of particles of diameter (d) is proportional to (1/d), therefore the work input per ton for particles of diameter (d) would be proportional to (1/d). The second significant theory is that of F. Kick published in 1885. Kick said that the work required is proportional to the reduction in volume of the particles concerned. If (f) is the diameter of the feed particles and (p) is the diameter of the product particles, the work input relationship would be: [W =Ioq(f/p) 9] The "Third Theory" of F.C. Bond, introduced in 1951, states that the work required is proportional to the length of the new crack tips produced in particle breakage during crushing or grinding and equals work represented by the product minus that represented by the feed. This takes the form: [W=]

Jan 1, 1982

By Alfred H. Bell

IN 1945, Illinois produced 75,210,000 bid. of oil, or 4.4 percent of the total for the United States, and ranked sixth in the nation in oil production for the third consecutive year. Production decreased about 3 per cent from that of 1944, when the total Illinois production was 77,413,000 bbl. This is the smallest percentage of decrease in production in the state for any year since a peak was reached in 1940. Daily average production for 1945 was approximately 206,000 bbl. Daily averages by months were as follows:

Jan 1, 1946

By J. B. Gayle

PRESENT flotation processes depend almost entirely on the buoyant properties of air bubbles to effect separations of mineral and gangue, but there is no convenient method for measuring aeration in flotation cells. Consequently the relation between aeration and cell performance has not been definitely established. In connection with a comparative study of kerosene and froth flotation processes, a modification of the displacement method' was developed in which air escaping from the cell surface is measured with a wet-test meter. The arrangement shown in Fig. 1 is satisfactory for use with a number of cells and is not critical, except that care must be taken to use connections and tubing large enough to avoid excessive back pressures. Attempts to use smaller tubing resulted in back pressures that caused displacement of the liquid level in the receiver, so that some air was lost around the sides, an occurrence readily visible when measurements were taken with only water passing through the cell. With the arrangement shown, the manometer indicated an average reading of about 1/2-in. water pressure. No loss of air was evident. Fig. 2 presents typical data for a standard Denver sub-A 24x24-in. unit cell operated at impeller speeds from 0 to 710 rpm. Each plotted point represents the average for five readings distributed over the entire cell surface. Readings were taken with only water passing through the cell. Results of this type have been used in a study of the influence of operating variables on cell performance and in detecting inherent differences in the operating characteristics of cells of various kinds. Although the information presented in Fig. 2 resulted only with water passing through the cell, the apparatus is suitable for use during flotation of coal when various reagents are present. Possible modi- fications that might prove convenient under special circumstances include varying the size and shape of the receiver and substituting a calibrated, inverted, water-filled carboy or other gas-measuring device for the wet-test meter. If such modifications result in excessive back pressures, some form of draft should be applied at the discharge end of the measuring system.

Jan 1, 1959

By A. M. Gaudin

This year the American Institute of Mining, Metallurgical and Petroleum Engineers has chosen to give me its Robert H. Richards Award, a distinction which is widely regarded as the highest honor in the field of mineral engineering. I am deeply moved by this tribute, which suggests not only regard for my service to the profession but also the affectionate esteem of my fellow mineral engineers. You have made me happy at the prospect of the permanent association of my name with that of Robert Hallowell Richards and of the distinguished recipients of the award, Arthur Fay Taggart, Frank R. Milliken, John F. Myers, Edward William Englemann, C. Harry Benedict, Edward W. Davis and Arthur W. Fahrenwald. I wish to thank you all for an honor so generously bestowed. Professor Richards is known to us all as a legendary figure, and we can read about him in the Richards Memorial Volume of our Transactions. Some of us have even had the good fortune of knowing him. I count myself among those lucky few. In its intangible attributes the Award recalls those things for which Professor Richards stood: for Science in Art, for thoroughness, for meticulous accuracy, for bold imaginativeness, most of all for professional integrity. Now, as in his day, these attributes are central to an engineer's creed. They are appropriately needed in a formulation of a definition of the mineral engineering profession.

Jan 6, 1957

By NEWTON B. KNOX

IN Bolivia, mining is still the principal economic activity, as it was before and during the Spanish Colonial period. Tin, tungsten, antimony, copper, lead, zinc, gold, silver, sulphur, and a little bismuth are produced. The Andes mountains are divided into two main ranges in Bolivia; the Western range marks the border with Chile and the Eastern range forms the backbone of the country; in the North it drops rather abruptly eastward, to the plains of the Beni, whereas in the South it splits and is separated from the Chaco flatlands by a series of folded mountain ranges. In general the mineral deposits are found within the Eastern range or in the hills that rise from the high plateau between the ranges - really parts of the Eastern range partly submerged by recent sediments. The mineral belt is thus over 500 miles long and about 100 miles wide and includes most of the principal centers of population and the most important means of communication. The region is mountainous and the roads are bad; furthermore labor is a serious problem, for the land is poor and the agricultural population is never far from hunger. The floating supply of miners is limited and soon exhausted in any emergency like the present.

Jan 1, 1945

By K. S. Seljesater

SINCE the development of dispersion-hardenable lead-antimony alloys1 in the laboratories of the Western Electric Co., Inc., studies have been made of the effect of various third constituents on these alloys.2 This paper covers a study of the effect of small amounts of arsenic. This element is important since it occurs as an impurity in many commercial antimonial leads and the results obtained are particularly interesting as indicating a class of addition agents which exert a stabilizing effect on dispersion-hardened alloys. EXPERIMENTAL In order to-study the effect ,of increasing amounts of arsenic, a series of alloys were made up containing 1 per cent. antimony, and arsenic varying from 0. to 0.10 per cent., the balance Doe Run lead (99.997 per FIG. 1..-CHANGE OF MICRO-BRINELL HARDNESS WITH TIME OF 1 PER CENT. LEAD-ANTIMONY ALLOY. cent. lead). The alloys were cast into bars 1 ½ in. wide by ¾ in. thick and cold-rolled to about 1/8 in. thickness. Three samples of each composition were annealed 1 hr. at 225° C. and quenched in water. One set was aged at room temperature, one at 50° C., and the third at 100° C., the

Jan 1, 1929

Jan 1, 1967

By S. Weinig, J. Winter

The grain boundary adsorption of solutes as a function of bulk concentration and solution temperature was studied using internal-frictimz techniques. From the variation of the cor-responding energy of activation for the Phenomenon, the inter-actior2 energy between a solute atom and a high-angle boundary was calculated. Interaction energies in the range of 0.3 ev were obtained, and were used to obtain the actual concentration of solute at the grain boundary. In corroboralory creel, studies the direct grain boundary contribution to the total creep strain was measured. It was found that the interface creep varied with the type and magnitude of the solute adsorbed. Subscribing to the theory of their being energetically favorable sites at the grain boundary for solutes of both Positive and negative size deviations, ternaries were investigated in Which solutes of both types were present. A marked increase in the resistance to grain boundary creep was manifested. THE major difficulty which has been encountered in investigations of the grain boundary segregation of solutes has been the lack of a sufficiently sensitive method of measuring the amount of adsorbed solute at the boundary. For the general case of a high-angle boundary, no direct method of measuring the adsorption at the boundary has been found to date. Internal friction has been used in several studies of grain boundary adsorption1-3 and although it is somewhat indirect, it was demonstrated to have the necessary sensitivity. In this investigation the authors have used internal-friction techniques in conjunction with a study of the grain boundary contribution to the total creep strain. As both parts of the investigation were performed on the same specimens it was possible to combine a highly sensitive technique with a somewhat more direct method in order to obtain information about the adsorption phenomenon. From internal-friction studies the rate of increase of the activation energy was observed to be a function of the difference in size between the solute and solvent atoms. It was proposed that if Gibbs' adsorption isotherm is considered, i.e., where r is the excess solute at the boundary, c is the bulk concentration, and ay/ac is the change in grain boundary energy with bulk concentration, then AH b/ac must vary in the same way as ay/ac and therefore In this way a relative measure of the grain boundary adsorption of solutes is directly obtainable from in-ternal-friction studies. If the previous work in the field of grain boundary adsorption of solutes is examined, certain apparent information is desirable if the phenomenon is to be understood. The most important questions that must be asked are as follows: 1) Is the adsorption of solutes at the grain boundary an equilibrium process? 2) Can the Mott model of the grain boundary be used as a basis of setting up an elastic interaction between the grain boundary and solute atoms? 3) Is it possible to obtain an exact measure of the excess solute at the grain boundary as a function of temperature and bulk concentration rather than merely a relative measure of the adsorption 4) Are the conclusions obtained from an indirect method such as internal-friction studies meaningful in considering gross grain boundary effects such as creep? EXPERIMENTAL PROCEDURE The material used in this investigation was Bureau of Mines "superpurity" titanium (79 Bhn—1500 kg

Jan 1, 1960

By Thomas Lane Carter

THE history of mining in South Africa differs somewhat from that of other countries in the part taken by the aborigines in the development ?of the mineral deposits. The Spaniards in America, and the fortune-seekers of Australia and New Zealand, found large numbers of natives in these new countries, but the inhabitants did not become willing or efficient workers ill the mines which the white men started. The Kaffirs of South. Africa have not shown the same antipathy to labor, nor do they show any signs of dying out in the presence of the white man's civilization. They are a virile race, and so far the vices of civilization have not killed. them. While it is true that the brain and skill necessary for the exploitation of the mineral resources of this sub-continent-have been supplied by the white race, it is also a fact that most of the rough labor in the development of the mining industry of South Africa has been done by the Kaffirs. The Kaffir tribes differ greatly in their mental and physical capabilities. Compare, for instance, a Zulu of Natal with a Bechuana, or a Xosa of Cape Colony with some of the degenerate tribes of Central or East Africa, and you will find that they have little in common, save that their skin is black and that they do not believe in clothes. As a general rule, the tribe's in the milder, healthier climates are far superior, both in mind and body, to the Kaffirs brought up in the hot malarial sections of Central Africa; and it naturally follows that the black men from the temperate zones of the country, are much finer workmen than the degenerates from less favorable sections: It is universal in South Africa to speak. of the .Kaffirs as " boys." No matter if he is 90 years old, the Kaffir is always a " boy," and in this paper the word " boy " is synonymous with Kaffir.

Nov 1, 1908

By R. W. Vieth, S. A. Bradford

THE orientations of tetragonal tin crystals are commonly examined by either the transmission Laue method or the back-reflection Laue method. The predominant planes and zone axes of the pattern are plotted on a Wulff net and indexed by measuring the angles between planes and directions. The problem of identifying the Laue spots has been approached in several different ways. Nicholas 1 tabulated interplanar angles for ten planes but did not relate the angles to permutation of indices or sign. A table of angles between adjacent planes and of angles between adjacent zones was published by Chandrasekhar and veal.' These tables are very helpful, provided the film shows all the low-order zones that occur within about 20 deg of each other. Frounfelker and Hirthe's compilation3 of angles between the (001) plane and twenty-nine other planes is useful for the indexing, only if the (001) spot can be found on the film. For all but the simplest orientations, however, more information is needed to index the diffraction spots. Standard stereographic projections, such as those published by Bicelli, 4 provide part of the information required. By their nature, these projections show the positions of only a few zone axes. In the tetragonal system many low-order zone axes are not normal to the planes having the same indices. Consequently, planes and directions can have entirely different positions on a stereographic projection. For example, the [011] zone axis is 33 deg from the normal to the (011) plane. The crystallographic orientation usually has to be deduced from a combination of the predominant zone axes and a few low-order planes that appear on the film. In addition to a standard stereographic projection of the planes, a stereographic projection of the directions is needed. Such a projection can be constructed from the angles given in Table I. To provide more information about angles between planes and directions, we have calculated interplanar angles up to (332) and angles between planes and directions up to [332] on an IBM 1620 computer. The angles are differentiated according to permutations of sign and indices. Those doing research on tin single crystals are welcome to request a copy of these tables from the authors.

Jan 1, 1967

By W. H. Bassett

THE ease and value of the application of spectrum analysis to industrial chemistry appears to be appreciated in few of the large works laboratories of this country. For 8 years, this analysis has been of great value to the authors in both analytical and metallurgical work. To the analyst the complete qualitative analysis of an unknown alloy, revealed by a spectrogram, is a sure basis for the planning of the most direct and rapid method of attack. As the determination of each element proceeds, the purity of precipitates may be checked as often as desired. The spectrograph proves invaluable in the recognition of impurities, the separation of which would entail a lengthy and difficult procedure, or when the weight of an unknown is less than is necessary to complete the desired determinations. A few hundredths of a gram will usually suffice for spectrographic analysis. In the separation of the rarer elements, the spectrograph will show, with precision, the point where each step has been successful. In zinc of certain classes, indium, gallium, and germanium have been isolated in this way; the presence of antimony in lake coppers has been proved; and bismuth has been detected in zinc and in alloys where the presence of a few thousandths of a per cent. would be harmful. An antimony precipitate in a delicate determination may contain a considerable proportion of tin or arsenic, both of which will be revealed. The spectrograph is consequently important to the metallurgist as well as to the analyst.

Jan 2, 1922

By Howard N. Eavenson

AN analysis of the bituminous coal situation by an authority who traces the production, mining, safety, markets and labor trends in comparison with other fuels. BEFORE 1918 the production of coal experienced a steady growth, with slight recessions in ouput in only twelve years (1837, 1841, 1852, 1855, 1861, 1874, 1876, 1889, 1894, 1905, 1909, 1914), and in each of these cases the loss was recovered in the following year and the increase continued. In each decade the output was doubled. Prices, while not high, allowed some profit. In 1918 during World War I, an output of 580 million tons was reached and with the exception of 1923 this total was not again reached until 1942, in World War 11. Losses of output in this period were much greater than ever before; in 1932 the total was 270 million tons less than in 1918 or 1923, and the loss after 1923 was not recovered until 1942. The greatest output was 631 million tons in 1947.

Jan 1, 1950

By R. E. Old

Through the use of pressure and production records, formation properties and bottom-hole sample data, the performance of an oil reservoir may be studied analytically to define and evaluate the natural forces acting on and within the reservoir. Use is made of material-halance methods and the equations for natural water encroachment. to estimate reserves. Methods for calculation of pressures are given. A study of the Jones sand, Schuler field, Arkansas, has been made and is given here to illustrate the value of the methods discussed. Introduction With the decreasing rate of discovery of new oil reserves, attention is necessarily focused on the efficient development, evaluation, and production of existing reserves. From the nation's viewpoint, the necessity of conserving resources is obvious. From the operator's viewpoint, the problem is to lengthen the period of profitable operation, in an attempt to increase the return on his investment. To do this the operator must take advantage of the natural forces acting on and within the reservoir. Natural water encroachment, the nemesis of profitable operation in the past, can be and is being harnessed to produce a greater oil recovery during the stage of flowing production. Proper evaluation of water encroachment rates and a fuller under- standing of reservoir behavior dictate the appropriate production procedures. Complacency in hit and miss production is obsolete. Oil production must and will approach the efficiency of other businesses, such as manufacturing. A manufacturer will not place an article on the market until he has fully investigated the processes involved, additional investment in equipment, costs of production, and expected profits. These may be modified by actual experience at a later date, but at least he begins with an idea of expected return. It is just as logical that an oil operator should investigate these same factors during the development and the early period of production of an oil reserve. The complexity of the problems existing in oil reservoirs should not be underestimated. Conversely, they should not be regarded as insoluble. Many completely defy solution, but there are others that can be solved completely or attacked intelligently to yield approximate results. The petroleum engineer has many tools, both figuratively and literally, at his disposal. Physical data such as core analyses, electrical logs, bottom-hole sample analyses, and bottom-hole pressures are accumulated extensively. Advances in the analytics of fluid flow have kept pace with the advances in measurement of physical data. It is the purpose of this paper to show how some of these records may be analyzed to define certain phases of reservoir behavior.

Jan 1, 1943

By R. E. Old

Through the use of pressure and production records, formation properties and bottom-hole sample data, the performance of an oil reservoir may be studied analytically to define and evaluate the natural forces acting on and within the reservoir. Use is made of material-halance methods and the equations for natural water encroachment. to estimate reserves. Methods for calculation of pressures are given. A study of the Jones sand, Schuler field, Arkansas, has been made and is given here to illustrate the value of the methods discussed. Introduction With the decreasing rate of discovery of new oil reserves, attention is necessarily focused on the efficient development, evaluation, and production of existing reserves. From the nation's viewpoint, the necessity of conserving resources is obvious. From the operator's viewpoint, the problem is to lengthen the period of profitable operation, in an attempt to increase the return on his investment. To do this the operator must take advantage of the natural forces acting on and within the reservoir. Natural water encroachment, the nemesis of profitable operation in the past, can be and is being harnessed to produce a greater oil recovery during the stage of flowing production. Proper evaluation of water encroachment rates and a fuller under- standing of reservoir behavior dictate the appropriate production procedures. Complacency in hit and miss production is obsolete. Oil production must and will approach the efficiency of other businesses, such as manufacturing. A manufacturer will not place an article on the market until he has fully investigated the processes involved, additional investment in equipment, costs of production, and expected profits. These may be modified by actual experience at a later date, but at least he begins with an idea of expected return. It is just as logical that an oil operator should investigate these same factors during the development and the early period of production of an oil reserve. The complexity of the problems existing in oil reservoirs should not be underestimated. Conversely, they should not be regarded as insoluble. Many completely defy solution, but there are others that can be solved completely or attacked intelligently to yield approximate results. The petroleum engineer has many tools, both figuratively and literally, at his disposal. Physical data such as core analyses, electrical logs, bottom-hole sample analyses, and bottom-hole pressures are accumulated extensively. Advances in the analytics of fluid flow have kept pace with the advances in measurement of physical data. It is the purpose of this paper to show how some of these records may be analyzed to define certain phases of reservoir behavior.

Jan 1, 1943