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By G. W. Phelps

The field of industrial minerals is concerned with both sieve size and distribution of sub-sieve particles. A great deal of work has been reported on the techniques designed to provide information of this work. The term sub-sieve is here considered to include particular material that will pass a 325-mesh testing sieve. Plant men require rapid, precise and simple testing techniques that are, if possible, inexpensive with respect to equipment and manpower. A number of particle-size procedures have been developed, based on the Stokes equation for streamline movement of a particle of diam D, moving at velocity V through a liquid of viscosity n. 1 Particles are considered to be rigid, smooth spheres, completely dispersed at low concentration and moving at low velocity through the suspending medium with no slippage between particle and liquid. In particle size determinations the particle moves either from natural gravitational forces or those provided by centrifugal means. The diagram of Fig. 1 shows a spherical particle of density S and diam D moving downward at velocity L/T (or V) through a liquid of density So and viscosity n. The forces of gravity G (natural) or Gc (centrifugal) cause the particle to move through the liquid, thereby creating a viscous drag F or Fc. Within the streamline flow

Jan 1, 1967

By G. Gabra

The kinetics of acidified thiourea leaching of pyrite concentrate was investigated at temperature ranging form 20 °C to a 60 °C. The effect of various parameters on the dissolution rates are discussed. The gold extraction was found to be zero and first orders with respect to Fe (111) and thiourea concentration, respectively. The order of the reaction with respect to sulfuric acid was found to be zero. The activation energy was determined from the Arrhenius plot as 2,039 kcal mole -1 (for a freshly prepared acidic solution containing Fe (111) as the oxidant and at 800 rpm stirring speed. This relatively low activation energy value suggests that the gold extraction is controlled by a-physical phenomenon. Under optimum conditions, more than 90% of gold has been dissolved in about 30 min. and 95% in 60 min. Attempt to recover gold from thiourea solution using active carbon is also discussed.

Jan 1, 1984

By E. M. Norris

Phosphate deposits are distributed widely over the earth's surface. Of the known areas of deposit, eight fields are of particular interest because of their vast reserves of high grade phosphatic material and the volume of their production that goes to the world's great consuming areas. These fields, in the order of their present economic importance, are situated respectively in Florida, French Morocco, Kola Peninsula of U.S.S.R., Tunisia and Algeria, Tennessee, Montana-Idaho-Wyoming-Utah, Ocean and Naru Islands in the Gilbert group, and in Egypt. The Rocky Mountain deposits have a comparatively low ranking in the phosphate trade of today, but this field contains one of the largest known reserves of phosphatic material, associated with which are recoverable trace minerals, which are of increasing importance in our national economy. The first discoveries of phosphate rock in the western states were recorded in Cache1 and Rich2 counties in Utah, respectively in 1889 and 1897. Mining operations were begun on these deposits near Montpelier, Idaho, in 1906. During the latter year geological studies of the phosphate beds were started by Weeks and Ferrier of the U. S. Geological Survey. These studies have been continued to the present day by a distinguished roster of the Survey's technicians. As a result of this systematic exploratory program, the Survey has published a series of bulletins, papers, and maps, which provide the mining public with a comprehensive study of the exposed

Jan 1, 1949

By CLAYTON C. BALL

In the year 1948, more than ever before, the coal industry established itself on the threshold of a new and exciting future expansion. While production did not equal the wartime and peacetime peaks of 1944 and 1947, it was, in review, a good coal year. During the latter part of the year a combination of mild weather, record stock piling, and general business slackening reduced coal demand to the extent that marginal mines suspended operations, while mines remaining active found it necessary to renew their attention to producing better products at lower operating costs.

Jan 1, 1949

By J. R. McWilliams

Several of the current concepts of brittle fracture involve consideration of the existence of defects or flaws. Griffith 1 observed that the tensile strength of brittle materials was several orders of magnitude less than might be expected from the calculated strength of the molecular bonds. He was able to show that the stress concentration at the tip of an elliptical crack is sufficient to raise the local stress level many fold. He therefore proposed that real materials do contain such stress risers in the form of minute cracks and that this accounts for the rather large difference between theoretical and actual strengths of brittle materials. The degree of stress magnification depends to a great extent upon the orientation of the crack with respect to the general stress system, and to the general geometry of the crack.

Jan 1, 1967

Executive A R LEDOUX, Chairman ARTHUR S DWIGHT CHARLES F RAND E P MATHEWSON J V W REYNDERS Membership E DEGOLYER, Chairman W Y WESTERVELT, Vice-chairman WILLIAM H BASSETT H G MOULTON C MINOT WELD Finance WALTER H ALDRIDGE, Chairman GEORGE D BARRON GALEN H CLEVENGER Library GEORGE C STONE,' Chairman JOHN H JANEWAY ALEXANDER C HUMPHREYS, ROBERT LINTON FREDERICK F SHARPLESS

Jan 1, 1923

By R. W. Heins, N. Street

An investigation was made of the Rehbinder-Kuznetsov pendulum as an instrument to aid in the study of rock drillability and of the effect of surface active agents on rock drillability. The "critical weight", i.e., the pendulum weight at greatest sensitivity, was determined for several solids and it was shown that a change in surface environment changed the maximum value of the apparent hardness but not the critical weight, and the critical weight increased with increase of hardness of the solid used. Using silver halides as the solid material, and solutions of either silver nitrate or the appropriate alkali halide, it was shown that there is a hardness maximum at the zero point of charge of the particular silver halide. INTRODUCTION The development of relative hardness measurement by the method of damped oscillations, or what has been called the pendulum sclerometer, is due largely to the Russian workers P. A. Rehbinder and V. D. Kuznetsov and their co-workers.1,2 The apparent simplicity of the method has led to its use in a number of fields, particularly those where relative hardness has to be determined on a brittle solid. As will be shown, the simplicity of the method belies its complexities. THEORY OF THE PENDULUM SCLEROMETER The operation of the pendulum is quite simple. Make a sharp point such as a diamond, hardened steel or tungsten carbide, as the fulcrum of a pendulum, with the center of gravity of the system below the point of support. The attenuation of this pendulum is a function only of air friction, provided no fragmentation, breakage or other work is performed by the point. However, when the solid surface breaks or disintegrates under the point, and the latter penetrates the solid, part of the energy of oscillation is absorbed in the work of creating new surface, and the rate of attenuation increases. In the case of brittle solids, the point of the pendulum produces fragmentary particles, whereas the point produces plastic deformation in a plastic solid; but in both cases damping occurs. This pendulum damping is a function of the hardness or strength of the solid. Whereas a pendulum oscillating on a hard material attenuates primarily by air friction, in the case of a soft material, the points penetrate the surface of the solid, producing new surface, and the pendulum damps much faster. Thus the attenuation rate is a function of the hardness or strength of a material in both plastic and brittle substances. Russian workers initially used a single support for the pendulum, but this created many problems because of oscillation of the pendulum in more than one plane. A revised version used two points, or sometimes a prism as support, successfully confining oscillation to one plane. The version using two points was constructed and used throughout this investigation, making the recording of the attenuation as a function of time relatively easy. That both points should be in contact with the solid during the damping is implied. Rehbinder (c.f. Kuznetsov2) proposed that the hardness H as measured by this method could be expressed by a quantity which is inversely proportional to the relative initial rate of attenuation of amplitude. where H = hardness parameter (arbitrary units) a, = initial amplitude da/dt = rate of attenuation of amplitude with time. In the simplest case of damping with a constant logarithmic decrement, H can be regarded as a constant for the duration of the whole damped oscillation process. That is

Jan 1, 1966

Jan 1, 1967

By Kenneth F. Whinery, John M. Campbell

Basically, the Buckley-Leverett theory involves two systems which are similar in nature but are differentiated by time. These systems may be described by the fractional flow and frontal advance equations which essentially characterize the mechanics of oil movement while being expelled from the reservoir. The fractional flow equation originally developed by Leverettl may be expressed in the more usable form The development of this equation is based on Darcy's law describing fluid flow through porous media and applies to the flow at only one point (it is a point function). For simplification, the fractional flow equation is written in the above form because the capillary forces always increase the fractional flow of the displacing phase regardless of the direction of flow or the displacing phase. If, for simplicity, the effects due to gravity and capillary pressure differences are neglected, the fraction of the displacing fluid, f, at any point in the flowing stream is related to the properties of the system by 1 Thus, it is seen that in the absence of capillary and gravitational effects, fd for a given sand and fluids varies only with saturation and pressure. The magnitude of the viscosity ratio, —a has an effective range (range of about 30) in the system where gas is displacing oil and a much smaller range for water displacing oil. In order to make the fractional flow equation more versatile, it is necessary to connect the fractional flow at a given point and saturation with time. This problem was approached by Buckley and Leverett" who developed the frontal advance equation, Eq. 3 states that the rate of advance of a plane that has a fixed saturation, Sd, is proportional to the change in composition of the flow stream caused by a small change in the saturation of the displacing fluid. It is, essentially, a transformation of a material balance equation representing the net rate of accumulation of the displacing phase within a homogeneous sand block. This accumulation is proportional to the difference between the rate at which the displacing fluid enters the sand and that at which it leaves. Eq. 3 describes the velocity with which a plane of constant displacing phase saturation advances through a porous system. Buckley and Leverett," Babson,' Kern," Welge, and others have adequately discussed the basic mechanism and application of the fractional flow and frontal advance equations. APPLICATIONS OF THE FRONTAL ADVANCE THEORY TO PETROLEUM RECOVERY Two general applications of the Buckley-Leverett frontal advance theory involve the system in which the oil is being displaced by an expanding gas cap overlying the oil zone and that in which the oil is being displaced by water. Displacement by Gas in the Presence of an Immobile Water Saturation A system in which gas is the displacing phase may be thought of as having two forces effecting the displacement process. These forces are the gravitational force and that force exerted by the displacing gas. The gravitational effects control the displacing efficiency of the gas. The gravitational effect will be less at higher rates of flow, thereby reducing the effectiveness of the displacement of the oil by the gas. The more efficient displacements occur at flow rates which are less than the gravity free fall rate. Capillary forces can be neglected without materially changing the magnitude of the gas saturation. The Mile Six pool is used herein to illustrate the calculating procedures in evaluating gas drive-gravity drainage field perfomlance. These calculations represent the determination of the gas-oil contact when the distribution of the hydrocarbon pore volume is considered. Two methods

The pellet plant, built by Dravo Corp, in Groveland, Mich., for the Hanna Mining Co., is now in full operation. Although using jasper, a type of iron ore with low iron content (approximately 28% Fe), the plant has a rated capacity of 1,250,000 tans of pellets per year. In its four years of existence, the nearby concentrating plant has seen its capacity increase from 700,000 tons to 1,500,000 tons a year as part of a major expansion program at Groveland. Utilizing the Dravo-Lurgi continuous grate process, the pellet plant produces %a-in. pellets of more than 60% iron content. The fully-hooded pelletizing grate, largest in the U.S., is 9 ft. 10% in. wide and 223 ft. 1% in. tong over 34 windboxes, with an effective hearth area of 2195 sq. ft. Drying, firing, and cooling functions are all carried out on this single piece of equipment.

Jan 4, 1964

By Earle E. Schumacher, Alexander G. Souden

IN the field of physical metallurgy it is becoming increasingly difficult to keep abreast of the recent develop¬ments since the diversity of investigations is so great and the literature so voluminous. The purpose of this review is to present the more important advances in the nonferrous field during the past few years, the topics discussed being classified broadly as fundamental and practical. The former includes those studies that have done most toward developing the basic science of metals and alloys, and the latter includes technical developments and applications. With the rapid growth of the metal

Jan 1, 1938

By B. M. Larsen, J. W. Campbell

Several articles have recently been published discussing the conditions necessary for accurate measurements of temperatures in the open-hearth steel furnace. In the course of a study of refractories service conditions in steel furnaces, the present writers have taken temperatures in several open-hearth shops in the Pittsburgh district. The conclusions, as to conditions necessary for accurate measurements of temperature, are somewhat at variance with those of other investigators. The subject is closely connected both with the close control of steel-making and the prevention of overheating of the silica refractories used in roofs and walls. It is becoming more and more important to obtain furnace temperatures of fairly definitely known accuracy. At present, the most useful instrument for such measurements is the disappearing-filament type of optical pyrometer. This method of measurement has formed the basis of most other discussions on the subject and was also used by the writers. Previous Investigations In 1916, Burgess' made perhaps the first systematic series of measurements in steel furnaces. The emissivity figures of 0.40 for liquid steel and of 0.53 to 0.65 for liquid slags had been determined by the Bureau of Standards and were used by Burgess in this work. These correction factors are still being used and are regarded as fairly accurate, so that the tapping and teeming temperatures on metal streams given by Burgess should be very nearly correct. Most of his temperatures of furnace roofs and slag surfaces were taken while flames were present in the furnaces and include a few roof temperatures above 1700' C. (3100' F.).

Jan 1, 1927

Jan 1, 1969

By D. I. Bardos, A. M. Bardos, Paul A. Beck

The approximate effective silicon radii in ternary Laves phase alloys with transition elements and silicon were found to range between 1.16 and 1.21A, i.e., considerably smaller than the atomic radius calculated for elemental silicon. The atomic radii were found to increase with the size of the transition element atoms in the structure. It has been noted by Aronsson1 that silicon in solid solution in iron, cobalt, and nickel has an effective CN 12 atomic radius of approximately 1.20Å, a value very much smaller than the CN 12 radius of 1.34Å derived from the interatomic distances in elemental silicon.7 The unusually short metal-silicon interatomic distances in transition element monosilicides and disilicides have been also pointed out by various investigators.1 A similar tendency was observed by Nevitt in Cr3O type silicides.2 Recent work on Laves phases in ternary systems of silicon with transition elements4"8 suggested that extensive Laves phase fields may occur in such systems.8 It has been pointed out by Laves7 that the MgCu2 and MgZn2 type structures lend themselves particularly well for the determination of the effective radii of the component atoms. In these AB2 phases the B atoms are arranged in close packed straight lines, and their distances are related in a simple manner to the lattice parameters.8 The present work was undertaken in order to find out whether or not the B transition element in such AB2 Laves phases can be replaced to an appreciable extent by silicon. In cases where extensive substitution proves to be possible, the "average atomic radius for the B site" at various silicon contents was to be determined, and the effective atomic radius of silicon calculated by extrapolation to complete replacement of the B component by silicon. The following ternary systems were studied: Ti-Mn-Si, Ti-Fe-Si, V-Co-Si, V-Ni-Si, Nb-Fe-Si, Nb-Co-Si, Ta-Fe-Si, Ta-Co-Si, and Mo-Fe-Si. In all of these alloy systems, the Laves phase solid solutions were found to extend over a considerable range of silicon content. As previously reported,4"8 in the V-Co-Si, V-Ni-Si, and Mo-Fe-Si ternary systems Laves phases do occur, even though there are no corresponding binary Laves phases. In stabilizing the Laves phase, silicon acts as if it were decreasing the effective electron concentration of the alloy.8 A more detailed study of the boundaries of the Laves phases in the V-Co-Si and V-Ni-Si systems has been made and will be published elsewhere. In both cases, the elongated Laves phase fields extend parallel to the B-Si side of the composition triangle, clearly showing that silicon is substituting for cobalt, respectively, nickel over a wide range of compositions. The binary Laves phases NbCo2 and TaCo2 have the cubic MgCu2-type structure. It was found that, in both ternary systems with silicon, again the MgZn2-type hexagonal Laves phase is stabilized and that this phase extends to high-silicon contents. In each ternary system at least three Laves phase alloys of the composition A(B1_xSix)2 were used, x here denoting the fractional substitution of the B-transition element atoms by silicon. The alloys, listed in Table I, were prepared by arc melting in argon. Each specimen was water quenched after a homogenizing anneal of 3 days at 110(FC, except for the Mo-Fe-Si alloys, which were annealed at 1200°C. Metallographic examination showed that most of the homogenized alloys consisted of a single phase, although some had minor amounts of a second phase, as shown in Table I. X-ray diffraction patterns were prepared using an asymmetrical focusing camera of large resolution and Fe Ka radiation. The patterns were indexed, and the lattice parameters of the hexagonal Laves phases were determined from the available diffraction lines of highest indices: (213), (205), and (313). The lat-

Jan 1, 1963

By P. Sanchez-Mejorada

GEOLOGISTS who are acquainted with the mines of northeastern Mexico realize that the most important lead-silver replacement deposits of the province are confined to a single formation. But since the formation is several hundred meters thick, the author has determined the relative position of the lead mantos in the belief that this information will prove useful in the search for new mines. This article describes the stratigraphic location of lead-silver replacement deposits known in several mines situated in a region comprising part of the states of Coahuila and Nuevo Leon. The area studied extends for 200 km* (125 miles) from east to west and 70 km (45 miles) north to south. Metallogenic Province: The most important metallic deposits of the region have the following common characteristics: 1) The orebodies occur as manto replacements of calcareous sediments. 2) The horizons that have contributed large tonnages of ore are in similar positions in the corresponding stratigraphic columns (as it will be shown later on). 3) Lead is the most important metal in the ores. Silver is commonly present in small amounts. Occurrence of zinc is dependent on the degree of oxidation of the primary sulfides. 4) A large proportion of the total production has been in the form of oxidized ores. 5) The deposits are located on anticlines. Rocks of Cretaceous age crop out over large areas of the states of Nuevo Leon and Coahuila. forming part of a belt that extends to the south along the eastern Sierra Madre. The sediments are cut by a small number of intrusive stocks ranging in characteristics from rhyolite to diorite. The most prominent structural feature of the region is a series of folds trending northwest-southeast. Faulting is not conspicuous in the region, although a major fault zone is found farther East.' The physiography closely reflects structural features, with mountains formed by anticlines and valleys conforming with intermediate synclines. Narrow valleys have also been developed along the axes of many anticlines, where solution of limy sedi- ments and erosion have proceeded along axial tension fractures. Stratigraphy: Rocks of the Upper Cretaceous are exposed in only a small percentage of the total area. Generally they have been eroded away from the mountains and are covered by recent talus and alluvium in the valleys. Humphrey' has published an excellent paper describing the Cretaceous formations of the Sierra de los Muertos, a short distance west of Monterrey. A brief summary of these formations is given below to convey an overall picture of the stratigraphic sequence that prevails just south of the area under consideration. Upper Cretaceous Indidura: Essentially thin shaly sediments. Cuesta del Cura: Limestone in thin wavy beds

Jan 1, 1959

Aamot, Olav Crone, (Member '29) Met , Det Norske Aktieselskab for Elektrokemisk, Industry, Inc , Oslo, Norway Aase, Glenn D , (Junior Member '40) Met Engr , Western Research Dyv , American Smelt & Refin Co , Selby, Calif Abadye, Henry G., (Member '43) Petr Engr , Sr Prod Engr , Long Beach Oil Development Co, 255 So Santa Clara Ave, Long Beach, Calif Abbott, Clarence E , (Member '04) Civil Engr , 'P , Tennessee Coal, Iron & R R Co , 1542 Brown Marx Bldg Birmingham, Ala Abbott, Fred E , Jr , (Member '44) Petr Engr , c/o Arabian American Oil Co , A P 0 816, c/o Postmaster, New York, N Y Abbott, John H , (Member '46) Resident Mgr , Hickman, Williams & Co, 230 No Michigan Ave, Chicago 1, Ill Abbott, R W R., (Member '47) Asst Power Supt, Cananea Consolidated Copper Co , Cananea, Son , Mexico Abbott, Robert H? Jr., (Junior Member '47) Petr Engr, Producing Dept, The Texas Cc, P 0 Box 951, Houma, La Abel, Raymond L., (Member '28) Chem Engr, Prof of Chem Engrg, Univ of Pittsburgh, Pitts¬burgh Pa Abel, Walter D , (Member '32) Min Engr, Div of Corporations, 403 State Bldg , Los Angeles 12, Cal if

Jan 1, 1952

By E. J. Bonet, P. B. Crawford

It is fairly common practice to reinject water into the aquifer near the oil-water interface in water-drive reservoirs. There have been many studies of aquifer behavior without reinjection,l-5 but apparently no analytical studies have been made to indicate performance when injection wells are present in the aquifer. The diffusivity equation may be used to describe the pressure behavior in an aquifer. When sources are present it can be written as A general solution of Eq. 1 may be obtained as the sum of two solutions. One is a general solution of the homogeneous equation, obtained by dropping the source term in Eq. 1 and still satisfying the required boundary conditions. Another is a general solution of Eq. 1 satisfying homogeneous boundary conditions.1° The first solution, which corresponds to the aquifer without reinjection, has been given quantitative and qualitative treatment in the literature.l-5,8,9 The latter solution will be treated here. Solutions with variable injection rates are obtained by superimposing solutions with constant rates, so we have considered only the latter. Five cases have been treated here: 1. A linear aquifer of finite width and extent. Water is injected into the aquifer at point xo, yo at constant rate. The pressure along the line x = 0 is maintained at zero pressure. (See Fig. 1.) Equations showing the pressure distribution, rates, velocity and cumulative influx have been developed. Certain numerical results are shown. 2. A linear aquifer of finite width and extent. Water is injected into the aquifer at point xo, yo at constant rate. The rate of production along the oil-water water contact is maintained constant. Equations showing the pressure distribution inside the aquifer are presented. 3. A linear aquifer of finite width and extent. Constant pressures are maintained at opposite ends of the aquifer. Water is injected at constant rates at point xo, yo. Equations showing the pressure distribution are shown. 4. A linear aquifer of finite width and infinite extent. The pressure is maintained constant at the oil-water contact. Water is injected at a constant rate at point xo, YO. 5. A linear aquifer of finite width and finite extent. The pressure at the oil-water contact is maintained constant. Water is injected at constant rate per unit length along a line x,. The Linear Aquifer The linear closed aquifer, performing at constant terminal pressure was selected as the first case to be analyzed. The development of the equations is based on uniform injection per unit of thickness, and gravity effects are neglected. In practical application this condition is probably most closely achieved when the

Jan 1, 1970

By J. R. Long, A. H. Roberson, T. R. Graham, R. S. Dean

EXPERIMENTAL work on the properties of high-purity alloys of the copper-manganese-zinc system has necessarily required extensive metallographic work to determine the equilibrium conditions in this system. Previous work on these alloys is fragmentary and, unfortunately, based on alloys made with impure grades of manganese, thus introducing significant amounts of iron, silicon, aluminum and carbon. Since these elements are known to affect equilibrium conditions, it became desirable to re-examine these alloys made from the pure metals. The alpha solid solution field was of particular interest and, therefore, was chosen for the initial work, which was outlined to determine the composition limits of this field. PREVIOUS WORK Heusler1 conducted an extensive survey of the liquid-solid regions of this system and also made an estimate of the solid-phase boundaries at 340°C. The pertinent part of his diagram is given in Fig. I, but it is of limited usefulness, since it applied to a single temperature only and is based on impure alloys under admittedly nonequilibrium conditions. Bauer and Hansen,2 likewise working with impure alloys, have determined the phase boundaries for alphabeta brasses containing small amounts of manganese and indicate an increase in the extent of the alpha field with increasing manganese. This is not in accordance with Heusler or with data obtained on pure alloys.3 They also described a third constituent precipitating in the alpha plus beta field below 350° to 400°C. but did not identify this constituent. Guillet4 and Heike and Ledibur5 have also noted this precipitate Each of these investigators recognized that impurities present in the manganese could and did have an effect on the structure and properties of their alloys. Corson6 in particular pointed out the hardening effects of silicon, aluminum, and carbon in copper-manganese alloys and Heusler reported that his alloys containing more than 25 per cent manganese were extremely brittle. In all probability this brittleness was due to the impurities present. This early work, therefore, should be taken as a general guide for preliminary studies only, and high-purity alloys may be expected to produce different results. The work of the Bureau of Mines laboratories with electrolytic manganese has been briefly summarized by Dean7 but includes only a short section on this system. Later work3 outlined a limited portion of the alpha field in the neighborhood of 65 per cent copper, 10 per cent manganese, and 25 per cent zinc. The present work was under-

Jan 1, 1945

By Ingvar Janelid

DURING the last ten years, in the effort to save manpower and costs, methods of drilling and blasting in Sweden have changed and developed in a revolutionary manner. These developments have been accompanied by extensive alterations in methods of tunneling and in mining technique. Since the end of the 1940's there has been a 100 pct change-over in Sweden to the use of tungsten carbide tipped drill steel. Both investigations and practical results have shown clearly that a tungsten carbide chisel bit fastened directly on the drill steel is the most economical for Swedish conditions. This applies to drill steel up to the longest size it is practical to handle. In terms of drilling footage, durability of the drill steel and the tungsten carbide bit is generally the same. In this respect, therefore, a detachable bit offers no advantage over integral steel. Transportation of integral steel to the grinding plant, instead of detachable bits only, involves heavier work, but this is counteracted by placing grinding plants closer together or by grinding at the working place itself. The drilling rate with integral steel is higher, the trouble of changing bits is avoided, and the difficulties which always arise with joints are eliminated. At present steel dimensions are usually 7/8 in. with a shank 41/4 in. long, whereas the international standard shank was formerly 31/4 in. The longer shank renders possible a better guide control of the steel and consequently longer life for the rotation chuck and the water-flushing pipe. After extensive experiments and investigations, agreement has been reached in Sweden on certain series of standards, shown in Table I. Other steel dimensions are, of course, available for special purposes. The standard drill-steel set begins with a 34-mm diam and has a length interval of 2 2/3 ft. On the other hand, for ordinary drifting it has been proved more economical to use greater length intervals on the steel, so only one steel change is required for a 61/2-ft round. Moreover, owing to the relatively close hole spacing necessary in a drift round, it has been possible to reduce the diameters of the tungsten carbide bits. This results in faster and cheaper drilling. As shown by the table, the lengths of drill steels for normal drifting are 33/4 ft and 71/2 ft, with 29 and 28-mm diam bits. During the last few years operators have begun to use 3/4-in. drill steel in place of the 7/8-in. drill steel chiefly employed earlier. This is a valuable development in drilling technique, particularly in view of

Jan 1, 1955

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.