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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 N. T. Burdine

Formulas for calculating relative permeability from pore size distribution data are derived from basic laws of fluid flow ill porous media. The tortuosity factors that appear in the equation5 are described in. terms of the physical properties of tile medium and the saturations of the contained fluids. Procedures for calculating and methods for measuring the tortuosity factors are discussed. Values of relative permeability calculated by the formulas art: compared with results obtained by experimental measurements I INTRODUCTION Recently, several investigators have derived relative permeability equations from Darey's and Poisenille's Laws in which some, physical factor or factors describing the porous system appear. The factor that has caused the greatest amount of comment, and which is probably least understood, is the tortuosity of the fluid {lath ill the porous sample. Values of the tortuosity factors appearing in the equations range from a constant for all condition- of the fluid flow system to an inverse function of the pore radii. It is the purpose of this paper to compare wine experi~i~cntslly determined relative permeability curves with those calculated by a method which utilized capillary pressure infortmation. The capillary pressure data were obtained prefer.. ably from pore size distribution information as determined by mercury injection but. in some cases, in the absence of suitable mercury injection information. data were taken from measurements made by the porous semi-permeable diaphragm method. The physical significance of certain tortuosity concepts is inferred and the determinations of the tortuosity factors from pore size distribution data and by electrical measurements are discussed. THEORETICAL BACKGROUND In previously reported studies on pore size distribution in petroleum reservoir rocks. by the author and co-workers ail equation was derived relating specific permeability. k, to pore entry radii, R, porosity. . tortuosity factor. .,, and incremental pore volume. V. The equation is where being the "effective" length of the flow path in the porous sample. and L the length of the porous sample., The constant. 0.126. is a units conversion factor. (This definition of tortuosity factor X, = L L does not conform to all such definitions found in the literature. Fly similarity, in a two-phase system. the effective permeability of the wetting-phase.

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 W. O. Brown

A laboratory investigation was conducted to determine quantitatively the extent to which connate water was contacted and displaced by invading flood water. In these experiments the connate water in unconsoli-dated sand packed columns was completely displaced by injecting water. The nature of this displacement was similar to that previously described for single-phase miscible fluid displacement studies, and thus the presence of a non-wetting immiscible phase did not appreciably change the nature of the displacement. The effects of water injection rate, column length, and oil viscosity on connate water displacement were investi-gated. It is concluded that the connate water in a reservoir is the water which actually displaces oil from the pores of the rock during a water flood. During a water flood the connate water forms a zone which separates the invading flood water from the continuous oil phase. The size and shape of connate water bank is chiefly dependent oil the oil viscosity and the column length. INTRODUCTION Water flooding is one of the most widely used techniques for the secondary recovery of oil. Presently, however, it is still not possible to recover all the oil in a reservoir by water flooding. The research described in this paper was conducted as part of a study to determine the conditions under which 100 per cent oil recovery could be attained by water flooding. The particular objective of this work was to determine if any chemical agent, regardless of its nature, placed in the flood water could be effective in influencing the mechanism of displacement of the oil by water. It has been known for many years that water does not displace all the oil in a reservoir because a portion of the oil is "trapped" and held immobile by capillary forces. This oil is trapped within the pores of a water-wet rock when it becomes broken into discontinuous globules. Initially, when oil is present at high saturations within the pores of a water-wet rock, the connate water forms rings around the points of contact of the sand grains and may even completely fill small cavities between grains, whereas the oil occupies the larger void spaces between the grains.' Under these conditions, the oil in these spaces is in the form of irregular but continuous filaments, the diameters of which depend on the geometry of the sand pores. The filaments are formed by the oil contained in the small cells which are formed between the sand grains and are connected to their neighboring cells by channels or tunnels formed by pendular rings of water. At a high oil saturation, the oil filaments conform approximately to the shape and size of the cells and their connecting tunnels. Starting with this distribution, as the water saturation is increased the water layers in the small cavities and on the surface of the grains grow. As this occurs, the water rings grow and the diameters of the oil filaments decrease. When an oil filament is reduced to a critically small diameter, the filament breaks, and its tunnel fills completely with water. Any oil which remains within a cell after all its connecting tunnels have been water-filled is trapped as a discontinuous globule. Once the oil has become trapped, the capillary forces oppose distortion of the globules and may prevent their being squeezed through the water-filled tunnels. Only a very small pressure gradient is sufficient to keep oil moving as a continuous filament. On the other hand, once the filament has broken into discontinuous oil droplets a relatively large force is required to distort the surface of a drop and move it through a water-

Jan 1, 1958

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 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 S. J. Cook

The subject of capital and the Canadian mining industry is so broad as to be impossible of comprehensive treatment in brief form. The purpose of the present paper therefore will be only to outline in a meagre and somewhat sketchy way the nature and extent of the mineral industry in Canada and to point out those features which are likely to be of general public interest. Canada's mineral industry has a long and creditable production record. The? value of the output per capita rose from $2.23 in 1886 to a maximum of $26.40 in 1920 and the value of the products from ten million dollars in the former year to almost two hundred and twenty-eight million dollars in 1920. Compared with other primary industries and on the basis of the value of production, mining held third place in Canada in 1920, the premier position going to agriculture and the value of forestry production placing that industry second in the list. In the mineral industry, between six and seven thousand properties are operated annually giving employment to up- wards of sixty thousand employees to whom about seventy-five million dollars is paid in salaries and wages. During 1923, seventeen mineral products reached a production value of one million dollars or over in Canada and in order of the values assigned these were: coal, gold, nickel, cement, cop-per, silver, clay products, lead, asbestos, natural gas, stone, zinc, lime, cobalt, sand and gravel, gypsum and salt.

Jan 1, 1924

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

By L Blackwell

Strategic mine scheduling is an industry best practice for increasing the long-term value of mining operations and supply chains. The application of optimisation technology such as mixed integer linear programming (MILP) is able to achieve a mathematically optimal result for a given scheduling model. Such a model will typically define the available source material, processing options and desired constraints for accessing and processing the material. Most strategic scheduling models, however, do not include a sufficiently detailed model of capital expenditure options related to capacity expansion.Typical strategic schedule models do not include important capital expenditure features such as capacity decay or expiration (limited lifespan of trucks), precedence relationships over time (rail construction before a new plant or non-linear expansions due to economies of scale) or mutually exclusive option sets (choices of plant size). By not including these features, a strategic mine scheduling model for a capital-sensitive operation is unable to be optimised to deliver maximum value or profitability.This paper presents several results of MILP optimisation using advanced capital expenditure modelling for mining operations and supply chains. Results of the study demonstrate that optimising capital expenditure at the same time as optimising the mining schedule allows for minimisation of capital purchasing, optimal timing for those purchases and optimal scheduling around them. Overall, this results in an increase in net present value.CITATION:Blackwell, L, 2014. Capital expenditure modelling for strategic mine scheduling, in Proceedings Orebody Modelling and Strategic Mine Planning Symposium 2014 , pp 315–322 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Nov 24, 2014

This paper is directed at the problems flowing from Australia's capital gains tax (CGT) on the disposal of exploration and mining tenements both in Australia and overseas. It will seek to identify the issues and give some idea of the dollar consequences of decisions lacking forethought. The paper should not only be seen in the context of Australian tenements. CGT applies to the disposal of any assets by an Australian resident anywhere in the world. Offshore incorporated companies are not necessarily free from CGT risk where it can be shown that control management and control of the relevant company is in Australia. Also the disposal by non residents of Australian tenements are potentially caught by CGT. Some will ask what has taxation got to do with a valuer who merely determines the value of assets. These days no determination can be blind to the consequences. Whether the consequences can encourage a movement in value is another thing dependent upon the circumstances; but? A role of an experienced taxation consultant is to point out parameters within which associated professionals can work. The parameters will vary from case to case, but these when clearly indicated may be of help to persons such as valuers. When one comes down to it real estate salesmen are never wrong. They have a feel for the market and almost through self fulfilling prophesies achieve sales at their guestimates. Whether they could have achieved higher considerations become virtually academic in the process. Of course I am not suggesting that tenement valuers can be compared to real estate salesmen, or am I? What is the value of a tenement? Is it the DCF/NPV type of generated value based on a large number of variable factors (ie what one may call the fundamental value)? Or is it what another may pay to purchase that tenement if it were on the market at an instant point in time? How big is the market, the quality of the bidders, the size of their purses, the needs of the buyer for comfortable fit, the premiums for foreigners, the standard of the marketing, the industry intelligence level of the bidders, the obligation to farm/sell down? The list goes on endlessly. One question must be.asked-"Is a range of values acceptable for tax purposes". ie Would any tax consultant ever provide a valuation to the Australian Taxation Office that indicates three or more possible values ie

Jan 1, 1987