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By J. C. Scully

In June, 1965, Sanderson and scully5 reported at the Conference on Environment Sensitive Mechanical Properties of Materials at the Research Institute for Advanced Studies at Baltimore that thin foils of titanium could be prepared by chemical polishing in a mixture of 44 pct HF and 73 pct HNO3 in the volumetric ratio 2:3. The technique is simpler than that since reported by Rice and Orava. As-received annealed titanium (containing 0.8 pct Fe and 30 ppm H) in the form of sheet 0.05 cm thick is placed in the solution and moved up and down. The reaction is violent but suitable foils are obtained very easily and consistently. A typical micrograph is shown in Fig. 3. The small precipitates were not identified. Yamane and ueda6 observed many spotlike features which they referred to as small dislocation loops. While their spots may be due to the reaction of the warm foil with the air as suggested by Rice and Orava, the precipitates in Fig. 3 are also found when foils of titanium are prepared by electro-polishing at low temperatures and subsequently examined in the electron microscope without any inter- mediate warming. Furthermore, they are not a surface effect. It is necessary to add that alloys of titanium cannot be so easily thinned by the chemical polishing solution described above since it contaminates the a, phase with hydrogen and produces y hydride. These matters are described at length in a paper7 and their relevance to stress corrosion is considered elsewhere.'-* Author's Reply The authors are grateful to Dr. Scully for bringing to our attention his hitherto unpublished technique for thinning unalloyed titanium, and deeply regret the unintended apparent duplication. The chemical thinning solution (7 parts HNO3 and 3 parts HF, by volume) reported by us is the same as that with which, for some period in the past, we had experienced success in the preparation of foils from single and polycrystalline niobium. Its subsequent effective application to titanium was a logical step, which, clearly independently of Scully, was conceived by Mr. Rice, to whom full credit is due. A few comments are warranted concerning some of the details of the preceding Discussion. It is evident to the discerning reader that the two thinning techniques under consideration are chemically almost identical, and in that sense are equally "simple". The chemical aspect is, of course, the one of primary importance in both communications. Thereafter, the relative simplicity is dictated by the mechanics of the actual thinning operation selected by the individual investigator. Our standard dimpling, or dishing, procedure was chosen with a view toward providing, for the electron transparent areas of the sample, the maximum protection from extraneous deformation during handling. That the long, straight dislocations visible in Scully's electron micrograph of a seemingly recovered structure closely resemble handling dislocations would tend to indicate the merit of our adopted technique. Features similar to those which Scully has attributed to precipitates, without any apparent diffraction contrast confirmation, were not observed in any of our clean foils taken from annealed or deformed specimens. This was admittedly somewhat surprising since the 3700 ppm (nominal) Fe in the A-70 commercial-grade titanium examined should have given rise to TiFe precipitates. Presumably these existed but were un-resolvable. Curiously, Scully's "precipitate1' density is fairly high although the iron content quoted was less than one-fourth of that in our material. One is forced to conclude from the evidence that prior thermal and mechanical treatments are responsible for the two different types of structure observed.

Jan 1, 1968

By J. D. Forrester, Erich Sarapuu, T. C. Cheasley

John G. Tripp-—The concept of converting fuel deposits in-situ to useful forms of energy and chemical raw materials has important possibilities as a means of stretching out our fuel resources. The authors have worked in this field for years and in fact are among the pioneers in developing in-situ techniques based on underground electrocarbonization. Their efforts have aroused great interest in this subject and their contributions will undoubtedly gain even more significance as time goes on. The 4 to 5 billion tons of petroleum are proved reserves, that is, they are completely defined and could be produced economically with present methods of recovery. Reserves of coal, tar sands, and oil shale shown in Table I are not equivalent to proved reserves as the term is used in the oil industry. Incidentally, the 4.3 billion tons of oil shown in the tabulation is equal to about 28 billion barrels of oil and, therefore, presumably does not include reserves of natural gas liquids estimated at about 5 billion barrels. The relative comparisons would be more complete if these liquids together with the reserves of natural gas were included in the tabulation. It is stated in the report that production costs of the order of 10c per million Btu's could be expected from a large industrial electrocarbonization installation. The authors state that the operation probably could be operated successfully and at a profit. I would like to express my view that for the operation to be profitable extremely favorable conditions would have to prevail. For example, the coal seam would have to be thick and close to the surface in order to minimize drilling costs; the deposit should be dry and so situated that there would be little, if any, inflow of ground water; and the seam would have to be relatively gas tight to avoid excessive gas leakage. Notwithstanding the tremendous strides that have already been made, it is my hope that the authors plan to continue their development work. Experiments on underground electrolinking and initial carbonization at Gorgas, Ala., indicate a need for improved control over the operation. Subsequent examination of the underground system at Gorgas has shown that the gasification zone did not always follow a direct path between the electrodes. Undoubtedly the control of the in-situ thermal processes can be improved by further development work. With respect to the electrocarbonization of oil shale it may be well to point out that the cost of mining oil shale is estimated to be 50c to 60c per ton. These are low mining costs as compared to coal. Thus it would appear that there is less economic incentive for applying in-situ thermal methods to oil shale than there is for applying these methods to coal. As is the case with in-situ methods for petroleum, the product from the shale having the most economic interest would be liquid oil rather than gas. The authors point out that for distances up to several hundred miles it is cheaper to transmit energy as electricity than it is to ship energy as coal. This is a very important point, and with coal shipping rates rising periodically, it could prove increasingly important in the future. I believe that the authors deserve great credit for their outstanding work on underground electrocarbonization. The knowledge resulting from their efforts is of great value to our fuels technology. James L. Elder—The experimental work conducted by the authors on the electrolinking-carbonization of carbonaceous materials in situ is of great interest. The method is of great importance in the development

Jan 1, 1955

By Wm. R. Webster

This is a contribution for the proposed new discussion on the physics of steel. The former discussion on the subject started with the consideration of five papers presented at the Chicago meeting in 1893, and continued for several years. The Suggested Lines of Discussion, prepared by Doctor Howe, covered a wide field and added greatly to the success of the work. Naturally, the first step in a new discussion will be to remodel and bring up to date the old Suggested Lines of Discussion so as to embody all the important advances in the metallurgy of steel that have a bearing on the physics of steel and keep the papers and discussions within the field of work undertaken. This paper will be devoted to the practical application, in rolling steel, of the effects of carbon, phosphorus, and manganese on its tensile strength, with some suggestions on further research work. Dr. J. E. Stead, in his paper Influence of Some Elements on the Mechanical Properties of Steel,' gave a complete review of all that had been done during the past thirty years. He gave full credit to all investigators who worked on these lines, also their results, with his views on same, and in many cases his own results. All of this data and much new valuable information were put in convenient shape for reference and study. To do this required a great deal of work, which is fully appreciated by the steel manufacturers and investigators. The variations in the values given by the different investigators for the increase of the tensile strength of steel for each 0.01 per cent. of carbon, phosphorus, and manganese were largely due to the steels they worked on, the large or small variations in the amount of the elcments present, and the omission to take into consideration all the factors, from the blast furnace through to finished rolled material, that affect the character of the steel. For instance, a poorly made dirty steel requires considerably more carbon to give the same ultimate strength than a well-made clean steel with the same phosphorus and manganese content.

Jan 1, 1922

By R. K. Hopkins

For a great many years fusion welding has been used in and around petroleum refineries, but it is only within six or seven years that the more important pressure vessels have been constructed by this process, because before that time the properties of fusion welds would not withstand such rigorous service. Since the adoption of fusion welding for the construction of this equipment, the refiner has required pressure vessels suitable for operation over a very wide range of conditions. On the one hand, vessels must operate at extremely high temperatures, in the range of 950" to 1000° F., and on the other vessels must be suitable for operation at sub-zero temperatures down as low as —75" F. Also, vessels are required suitable for operation at pressures upwards of 1000 lb. per sq. in., and as low as a 29-in. vacuum. In addition, vessels are required to withstand the attack of very corrosive mediums. It has been a rather difficult task for the fabricator to meet all of these requirements, but as a result of the extensive research carried on by steel manufacturers and several fabricators of class I vessels, practically all of these demands have been met. In order to meet the refiners' requirements for this wide range of conditions, the fabricator has worked closely with the metallurgist. This has enabled him to choose the proper base metal for each service condition, but it has been the fabricator's problem to develop a welding rod and welding technique, as well as a heat-treatment, that would produce in the welded vessel characteristics in and around the weld comparable to those in the base metal. Where corrosion is not a serious problem, and where the operating temperatures are not too high, ordinary carbon steel has served very well. But, when corrosion is serious, and/or when the temperatures are either very high or very low, it is necessary to use some form of alloy steel to give satisfactory service. A great deal of credit is due to the members of the Boiler Code Committee and also to the members of the Joint A.P.I.-A.S.M.E. Committee, who have formulated codes that insure the safety of the

Jan 1, 1935

By R. K. Hopkins

For a great many years fusion welding has been used in and around petroleum refineries, but it is only within six or seven years that the more important pressure vessels have been constructed by this process, because before that time the properties of fusion welds would not withstand such rigorous service. Since the adoption of fusion welding for the construction of this equipment, the refiner has required pressure vessels suitable for operation over a very wide range of conditions. On the one hand, vessels must operate at extremely high temperatures, in the range of 950" to 1000° F., and on the other vessels must be suitable for operation at sub-zero temperatures down as low as —75" F. Also, vessels are required suitable for operation at pressures upwards of 1000 lb. per sq. in., and as low as a 29-in. vacuum. In addition, vessels are required to withstand the attack of very corrosive mediums. It has been a rather difficult task for the fabricator to meet all of these requirements, but as a result of the extensive research carried on by steel manufacturers and several fabricators of class I vessels, practically all of these demands have been met. In order to meet the refiners' requirements for this wide range of conditions, the fabricator has worked closely with the metallurgist. This has enabled him to choose the proper base metal for each service condition, but it has been the fabricator's problem to develop a welding rod and welding technique, as well as a heat-treatment, that would produce in the welded vessel characteristics in and around the weld comparable to those in the base metal. Where corrosion is not a serious problem, and where the operating temperatures are not too high, ordinary carbon steel has served very well. But, when corrosion is serious, and/or when the temperatures are either very high or very low, it is necessary to use some form of alloy steel to give satisfactory service. A great deal of credit is due to the members of the Boiler Code Committee and also to the members of the Joint A.P.I.-A.S.M.E. Committee, who have formulated codes that insure the safety of the

Jan 1, 1935

By Wm. R. Webster

This is a contribution for the proposed new discussion on the physics of steel. The former discussion on the subject started with the consideration of five papers presented at the Chicago meeting in 1893, and continued for several years. The Suggested Lines of Discussion, prepared by Doctor Howe, covered a wide field and added greatly to the success of the work. Naturally, the first step in a new discussion will be to remodel and bring up to date the old Suggested Lines of Discussion so as to embody all the important advances in the metallurgy of steel that have a bearing on the physics of steel and keep the papers and discussions within the field of work undertaken. This paper will be devoted to the practical application, in rolling steel, of the effects of carbon, phosphorus, and manganese on its tensile strength, with some suggestions on further research work. Dr. J. E. Stead, in his paper Influence of Some Elements on the Mechanical Properties of Steel,' gave a complete review of all that had been done during the past thirty years. He gave full credit to all investigators who worked on these lines, also their results, with his views on same, and in many cases his own results. All of this data and much new valuable information were put in convenient shape for reference and study. To do this required a great deal of work, which is fully appreciated by the steel manufacturers and investigators. The variations in the values given by the different investigators for the increase of the tensile strength of steel for each 0.01 per cent. of carbon, phosphorus, and manganese were largely due to the steels they worked on, the large or small variations in the amount of the elcments present, and the omission to take into consideration all the factors, from the blast furnace through to finished rolled material, that affect the character of the steel. For instance, a poorly made dirty steel requires considerably more carbon to give the same ultimate strength than a well-made clean steel with the same phosphorus and manganese content.

Jan 1, 1922

By Walter S. Lutz, J. T. Griffith

The rainfall during the last six months of 1942 in Scranton and vicinity was 24.06 in.—only 4.35 in more than the average for this district in any equivalent period—yet that rain forced The Hudson Coal Co. to handle 38.8 tons of water for every ton of coal mined. It filled to overflowing, or to a higher level, 14 flooded mine areas holding, in total volume, 8.3 billion gallons of water in storage; brought about a pumpage of 11.4 billion gallons in the months of December 1942 and January, February and March 1943 Half of the total energy generated or purchased (44,322,980 kw-hr.) was required to keep the mines sufficiently free of water to permit the mining of coal during a period of much needed output. Fig. I shows the extent to which this flooding of exhausted and idle properties has proceeded, and is known to be proceeding further, at the upper end of the Northern field. This rainfall (24.06 in.) means 80,559,444 tons of water on approximately 46.2 sq. miles of area tributary to the pumping plants. During the high rainfall period, 72,687,661 tons went underground, being pumped at the stations in this territory. This means an inflow of 88per cent, a runoff of 12 per cent compared with 64 per cent during normal conditions in a normal region. During this period no floods, either surface or underground, had to be dealt with, although the streams and rivers were high on several occasions. In general, the rainfall for the first three months of 1943 can be described as heavy but not abnormal.9 These figures not only indicate the large volumes of water to be handled but, by their very size, they also emphasize that the mine-water problem is not to be conquered, at least from an economical standpoint, by merely buying and installing more and more pumps. Into the solving of this water problem must go much planning, adhering to the principle of keeping the highest percentage of water at the highest possible level for the longest period of time; the storage of huge volumes in sumps capable of being reduced after the flood inflow and at rates less than the inflow; plans for prevention of surface inflow; provision of the minimum of pumping capacity arranged to as nearly 100 per cent pumping load factor as is possible; intercompany joint pumping plants; the conducting of water from one plant to another and from one property to another over distances measured in miles; priorities in power to the threatening situations; and. balance of the necessities and dangers existent in one colliery over another, day by day, when quantities of water are running high. Despite these astronomical figures of water volumes, their disposal to the surface is accomplished reasonably cheaply because, although the annual cost of $575,020 is a large sum, the cost per ton is about 0.1168 cents. Credit for this goes

Jan 1, 1947

By J. T. Griffith, Walter S. Lutz

The rainfall during the last six months of 1942 in Scranton and vicinity was 24.06 in.—only 4.35 in more than the average for this district in any equivalent period—yet that rain forced The Hudson Coal Co. to handle 38.8 tons of water for every ton of coal mined. It filled to overflowing, or to a higher level, 14 flooded mine areas holding, in total volume, 8.3 billion gallons of water in storage; brought about a pumpage of 11.4 billion gallons in the months of December 1942 and January, February and March 1943 Half of the total energy generated or purchased (44,322,980 kw-hr.) was required to keep the mines sufficiently free of water to permit the mining of coal during a period of much needed output. Fig. I shows the extent to which this flooding of exhausted and idle properties has proceeded, and is known to be proceeding further, at the upper end of the Northern field. This rainfall (24.06 in.) means 80,559,444 tons of water on approximately 46.2 sq. miles of area tributary to the pumping plants. During the high rainfall period, 72,687,661 tons went underground, being pumped at the stations in this territory. This means an inflow of 88per cent, a runoff of 12 per cent compared with 64 per cent during normal conditions in a normal region. During this period no floods, either surface or underground, had to be dealt with, although the streams and rivers were high on several occasions. In general, the rainfall for the first three months of 1943 can be described as heavy but not abnormal.9 These figures not only indicate the large volumes of water to be handled but, by their very size, they also emphasize that the mine-water problem is not to be conquered, at least from an economical standpoint, by merely buying and installing more and more pumps. Into the solving of this water problem must go much planning, adhering to the principle of keeping the highest percentage of water at the highest possible level for the longest period of time; the storage of huge volumes in sumps capable of being reduced after the flood inflow and at rates less than the inflow; plans for prevention of surface inflow; provision of the minimum of pumping capacity arranged to as nearly 100 per cent pumping load factor as is possible; intercompany joint pumping plants; the conducting of water from one plant to another and from one property to another over distances measured in miles; priorities in power to the threatening situations; and. balance of the necessities and dangers existent in one colliery over another, day by day, when quantities of water are running high. Despite these astronomical figures of water volumes, their disposal to the surface is accomplished reasonably cheaply because, although the annual cost of $575,020 is a large sum, the cost per ton is about 0.1168 cents. Credit for this goes

Jan 1, 1947

By Christian F. Baiz

INTRODUCTION Industrial minerals can have similar financing requirements to those needs of metaliferrous and coal mining projects. One of the outstanding differences is the understanding of the many different markets that these industrial minerals represent. There are in excess of 30 principal industrial minerals ranging in terms of annual production from the largest quantity such as sand and gravel, to possibly the smallest quantity of production of a legitimate industrial mineral which may be defined as industrial and rough gem diamond. (See Tables 1 and 2) Project finance techniques, analytical methods, and information requirements are covered elsewhere in this Chapter and Chapter 10. Some comments on equity finance aspects follow. EQUITY AMOUNT The amount of equity in a financing transaction provides a cushion to the lender in case the project runs into trouble. Generally speaking, the greater the amount of risk in a project, the more equity a lender will require. The amount of cash equity in a project financing transaction is between 25 and 40 percent. The amount of leverage (debt/equity) is negotiable based on such factors as the strength and extent of the sponsor's undertakings, of the project's economics, and the term of a strong sales contract. Naturally, a borrower seeks to obtain d loan with as little equity required as can be negotiated. Zero percent equity is usually associated with a take-or-pay contract (a hell-or-high- water unconditional commitment under which the purchaser must pay for the commodity as though it were shipped regardless of whether it is actually mined or shipped) with a financially strong corporate entity i.e., the parent company or an end user. As a take-or-pay contract is tantamount to a guarantee of payment, the banker views the credit basis of the loan as being other than the borrower's mining operation and therefore will analyze the creditworthiness of the institution purchasing the commodity on the basis of its corporate balance sheet. Do not confuse a take-or-pay contract with a take-if- tendered or take-and-pay contract. Another means in the United States of obtaining zero percent equity is the carved out production payment financing, typical of coal mine financing. This involves the sale, or conveyance, by the owner of the mineral property of a production payment to a nominally capitalized company. The nominally capitalized company is formed solely to buy the production payment and usually borrows 100 percent of the purchase price from a lender. Equity amounts of 10 to 20 percent generally are found in transactions which employ techniques such as an advance sale or a subordinated lease/loan. These agreements are viewed as quasi equity by most banks for several reasons. First, the proceeds represent a cash infusion early in the project's life - usually prior to the bank lending any funds. Thus, the repayment schedule is "behind" that of the bank debt. In the case of an advance sale, repayment is in the form of a long-term supply contract with favorable terms, usually priced close to the mining operation's costs. There is also usually a requirement that all costs of the project be paid for by the loan or equity, often making the sponsors financially responsible for any cost overruns. Cost overruns are a major risk in any project, large or small, and are often due to unforeseen factors such as wildcat strikes, a piece of faulty equipment, or any event which delays completion, e.g., remote location, weather, etc.. . The question of how overruns are covered can be negotiated. For example, in addition to the original debt/equity ratio of the project, there can also be a cost overrun ratio that will

Jan 1, 1985

By J. Brian Eby

The Gulf Coast of southern Louisiana during the year of 1940 was subjected to an extensive exploration and development campaign, as a result of which 16 oil fields and about 38 new producing sands were found. Although this record of discovery appears in keeping with the rate of 1939 actually in amount of new proven reserves, it may fall short of that of the previous year. Only five or six of the discoveries rated as first-class or important fields at the close of the year. The most prominent new fields opened during the year were Neale field in Beaure-gard Parish, the West Cote Blanche field in St. Mary Parish, the Stella field and the West Bay field in Plaquemines Parish, and the Lake Salvador field in St. Charles Parish. There were many important oil-sand discoveries in proven fields, such as in the Bayou Perot field, the Golden Meadows field, the Iowa field, West Lake Verrett field, and the Venice field. During the year, 1047 weUs were drilled in southern Louisiana, of which 768 were completed as oil-producing wells, 17 as gas wells and 262 as dry holes. The Neale field in northwest Beauregard Parish is considered one of the most important discoveries of the year. The f~eld centers around the north half of sec. 26, 'Y.3 S., R.I I W., just north of the town of Neale. It was discovered by the Atlantic Refining Co., using reflection seismograph to locate the structure. Production was found in the second well drilled in the Wilcox sand on the downthrown side of a fault. The structure is known as the "Tepetate" type, being similar to that of the well-known Tepetate field. There were 12 oil wells and 3 dry holes drilled during the year. The Wilcox sand in this field occurs between 8350 and 8400 ft. and averages 30 ft. in thickness. The West Cote Blanche Bay field, in West Cote Blanche Bay, St. Mary Parish, is a 1940 discovery by the Texas Company, credited to reflection seismograph exploration. The oil is from two sands occurring at 3110 to 3140 ft. and from 4950 to 5020 it. Four wells were drilled during the year, three oil wells and one dry hole. The deepest hole drilled reached 9491 ft. without encountering salt or dome material. In Plaquemines Parish, south of New Orleans, the California company has a new field known as the Stella field. The sand was found at a depth of 7485 ft., and 5 ft. of perforations made a well capable of producing 486 bbl. of oil in 24 hr. through a 9.is-in. choke. The oil is 42" gravity. The discovery well was drilled to a total depth of 10,258 ft. and other producing sands were indicated. A good field appears assured, although only one well was completed within the year. The Lake Salvador field, in the center of Lake Salvador, St. Charles Parish, gives promise of being one of the most important discoveries of the year. The discovery well was perforated at 9775 to 9800 ft. making 850 bbl. of 33.7° gravity oil daily through a 1/4-in. choke. Three wells were completed in 1940 but few details have as yet been made available.he Gulf Oil Corporation apparently has a good field in its wildcat discovery in West Bay, Plaquemines Parish. This well found

Jan 1, 1941

By James A. Lewis

It is the purpose of this paper to show the importance of sand characteristics, when combined with other physical data, in evaluating production obtained by secondary recovery operations, and to indicate the benefits to be gained from the application of these principles to primary production. Introduction During the past 10 years there has been a growing interest within the industry regarding the movement of fluids through oil reservoirs. A number of research projects have been directed toward the development of the physical laws governing this movement. In the period 1933 to the present, correlations between laboratory analysis of cores, reservoir fluids and well performance have been established and have been applied to successful secondary water-flooding recovery operations; and to the completion, production, reconditioning and evaluation of wells in new fields. The application of these data to water-flooding, either natural or artificial, is comparatively new, but the principlcs involved were set forth in 1880 by John F. Carll,1 who said: The flooding of an oil district is generally viewed as a great calamity, yet it may be questioned whether a larger amount of oil cannot be drawn from the rocks in that way than by any other, for it is certain that all the oil can-not be drawn from the reservoir without admission of something to take its place. If one company owned all of the wells drawing upon a pool, and had accurate records of the depth and characteristics of the oil producing stratum in each well, it is quite possible that some system might be devised by which water could be let down through certain shafts, and thus the rocks be completely voided of oil and left full of water. As it is, however, no systematized plan of action can be adopted. The careless handling of one well. by which water is let down to the oil rock, may spoil several others belonging to different parties. A clashing of interests at once arises and is likely to result in disaster to the whole district. In judging of the probable effects of the intro-duction of water into any particular oil district several things are to be considered. (1st) The time of flooding—whether early in the progress of development, while yet a large percentage of oil remains unexhausted or at a later period after the supply has suffered from long continued depletion. (2nd) The structure of the rock—whether regular and homogeneous throughout, or composed of fine sand inter. bedding connected and irregular layers of gravel, sometimes lying near the top and at others near the bottom. (3rd) The shape of the area being flooded. (4th) The position of the point at which water is admitted. in relation to the location of the surrounding wells still pumping oil. (5th) The height (which governs the pressure) of the column of water obtaining admittance. (6th) The duration of the water supply. Although we may take exception to part of Carll's reasoning, particularly " and thus the rocks be completely voided of oil and left full of water," we must give him credit for pointing out the increased effectiveness of water encroachment in displacing oil from a sand and for his recording six of the present seven considerations necessary for evaluation of production of oil by water

Jan 1, 1942

By James A. Lewis

It is the purpose of this paper to show the importance of sand characteristics, when combined with other physical data, in evaluating production obtained by secondary recovery operations, and to indicate the benefits to be gained from the application of these principles to primary production. Introduction During the past 10 years there has been a growing interest within the industry regarding the movement of fluids through oil reservoirs. A number of research projects have been directed toward the development of the physical laws governing this movement. In the period 1933 to the present, correlations between laboratory analysis of cores, reservoir fluids and well performance have been established and have been applied to successful secondary water-flooding recovery operations; and to the completion, production, reconditioning and evaluation of wells in new fields. The application of these data to water-flooding, either natural or artificial, is comparatively new, but the principlcs involved were set forth in 1880 by John F. Carll,1 who said: The flooding of an oil district is generally viewed as a great calamity, yet it may be questioned whether a larger amount of oil cannot be drawn from the rocks in that way than by any other, for it is certain that all the oil can-not be drawn from the reservoir without admission of something to take its place. If one company owned all of the wells drawing upon a pool, and had accurate records of the depth and characteristics of the oil producing stratum in each well, it is quite possible that some system might be devised by which water could be let down through certain shafts, and thus the rocks be completely voided of oil and left full of water. As it is, however, no systematized plan of action can be adopted. The careless handling of one well. by which water is let down to the oil rock, may spoil several others belonging to different parties. A clashing of interests at once arises and is likely to result in disaster to the whole district. In judging of the probable effects of the intro-duction of water into any particular oil district several things are to be considered. (1st) The time of flooding—whether early in the progress of development, while yet a large percentage of oil remains unexhausted or at a later period after the supply has suffered from long continued depletion. (2nd) The structure of the rock—whether regular and homogeneous throughout, or composed of fine sand inter. bedding connected and irregular layers of gravel, sometimes lying near the top and at others near the bottom. (3rd) The shape of the area being flooded. (4th) The position of the point at which water is admitted. in relation to the location of the surrounding wells still pumping oil. (5th) The height (which governs the pressure) of the column of water obtaining admittance. (6th) The duration of the water supply. Although we may take exception to part of Carll's reasoning, particularly " and thus the rocks be completely voided of oil and left full of water," we must give him credit for pointing out the increased effectiveness of water encroachment in displacing oil from a sand and for his recording six of the present seven considerations necessary for evaluation of production of oil by water

Jan 1, 1942

By R. V. Colligan

[CONTENTS PACE Educating and Training Economic Geologists of the Future. By C. H. BEHRE, JR. (TP 2278, Min. Tech., Nov. 1948. Discussions by R. V. COLLIGAN and EVAN JUST) ....... I Mercury Industry in Italy. By EDWIN B. ECKEL. (TP 2292, Min. Tech., Jan. 1948. Discussion .............................. by C. N. SCHUETTE) 3 Chert in the Kingsport Formation at Mascot, Tennessee. By ARTHUR T. ALLEN. (TP 2299, ............... Min. Tech., Jan. 1948. Discussion by M. M. BUTLER) 5 Wall Rock Alteration at Butte, Montana. By RENO H. SALES and CHARLES MEYER. (TP 2400, Min. Tech., May 1948. Djscussions by C. D. HULIN, W. D. JOHNSTON, JR., and L. C. ................................... GRATON) 5] Educating and Training Economic Geologists of the Future R. V. COLLIGAN*-I can best illustrate my opinions by drafting another five year plan (Table 2). This plan is set up following the same stipulations outlined by Dr. Behre, namely: (I) the student is preparing himself for commercial work as a mining geologist; (2) he is attending an institution with a sufficiently broad curriculum (that is, engineering school and mining school as well as liberal arts college) to furnish the courses listed; and (3) he is not planning to continue his studies through to a doctor's degree before going into commercial work. A comparison of my study plan (Table 2) and that submitted by Dr. Behre (Table I) will at once point up the basic similarity, due to the obvious fact that there are so many essential courses which must be included in any outline of study. However, a more detailed analysis will show up certain differences, which, in fact, are only certain refinements on Dr. Behre's program. These I plan to discuss in order of their importance. The first and most important change is the addition of 12 hr of optional subjects, making a total of 24 hr of optional subjects as against a total of 12 hr under Dr. Behre's schedule. This of course entails the elimination of certain courses, which I shall discuss later. However, I wish to make it clear that I suggest eliminating these courses not because I feel that they are unnecessary, but rather because I feel the optional courses are more necessary to the complete education of the individual. I appreciate that Dr. Behre recognizes the importance of the cultural side of education, but I take issue with his thesis that the student will get it without credit and in his spare time. I do not think that the average college student, and certainly not the college freshman, is mature enough to know what he needs and where to get it in his spare time. I think it must be "spoon-fed"; he must be oriented through specific courses. University life (or should I say "college life") is too full of athletics, fraternity activities, dances, "bull sessions," and countless other enjoyable distractions, all of which contribute to the "full man." I fail to see how the average young American male can possibly sandwich in a necessary complement of "cultural activities" in his spare time. Since these latter activities do not fall within the pattern set by the "group," and show less promise of immediate return in enjoyment, or increased social status on the campus, they are bound to suffer in competition with the more popular, "group" activities. No doubt much of the criticism levelled against arts colleges, namely, that the cultural courses are useless, is well taken, for the culture

Jan 1, 1947

By J. Brian Eby

The Gulf Coast of southern Louisiana during the year of 1940 was subjected to an extensive exploration and development campaign, as a result of which 16 oil fields and about 38 new producing sands were found. Although this record of discovery appears in keeping with the rate of 1939 actually in amount of new proven reserves, it may fall short of that of the previous year. Only five or six of the discoveries rated as first-class or important fields at the close of the year. The most prominent new fields opened during the year were Neale field in Beaure-gard Parish, the West Cote Blanche field in St. Mary Parish, the Stella field and the West Bay field in Plaquemines Parish, and the Lake Salvador field in St. Charles Parish. There were many important oil-sand discoveries in proven fields, such as in the Bayou Perot field, the Golden Meadows field, the Iowa field, West Lake Verrett field, and the Venice field. During the year, 1047 weUs were drilled in southern Louisiana, of which 768 were completed as oil-producing wells, 17 as gas wells and 262 as dry holes. The Neale field in northwest Beauregard Parish is considered one of the most important discoveries of the year. The f~eld centers around the north half of sec. 26, 'Y.3 S., R.I I W., just north of the town of Neale. It was discovered by the Atlantic Refining Co., using reflection seismograph to locate the structure. Production was found in the second well drilled in the Wilcox sand on the downthrown side of a fault. The structure is known as the "Tepetate" type, being similar to that of the well-known Tepetate field. There were 12 oil wells and 3 dry holes drilled during the year. The Wilcox sand in this field occurs between 8350 and 8400 ft. and averages 30 ft. in thickness. The West Cote Blanche Bay field, in West Cote Blanche Bay, St. Mary Parish, is a 1940 discovery by the Texas Company, credited to reflection seismograph exploration. The oil is from two sands occurring at 3110 to 3140 ft. and from 4950 to 5020 it. Four wells were drilled during the year, three oil wells and one dry hole. The deepest hole drilled reached 9491 ft. without encountering salt or dome material. In Plaquemines Parish, south of New Orleans, the California company has a new field known as the Stella field. The sand was found at a depth of 7485 ft., and 5 ft. of perforations made a well capable of producing 486 bbl. of oil in 24 hr. through a 9.is-in. choke. The oil is 42" gravity. The discovery well was drilled to a total depth of 10,258 ft. and other producing sands were indicated. A good field appears assured, although only one well was completed within the year. The Lake Salvador field, in the center of Lake Salvador, St. Charles Parish, gives promise of being one of the most important discoveries of the year. The discovery well was perforated at 9775 to 9800 ft. making 850 bbl. of 33.7° gravity oil daily through a 1/4-in. choke. Three wells were completed in 1940 but few details have as yet been made available.he Gulf Oil Corporation apparently has a good field in its wildcat discovery in West Bay, Plaquemines Parish. This well found

Jan 1, 1941

By J. J. Beeson

For the past fifty years or more, the structural features of the Cordil-leran mountain system of western United States have presented some most interesting problems. Any geologist or engineer living in this region, or even making occasional examinations of the mines, will lose much of interest and importance if he is not familiar with the literature. Some of the greatest works on geology have been the result of studies carried on in sections of this region. Among the more important of the earlier works are those of Dutton,l King,2 Gilbert3 and Powell;4 of the more recent Lindgren,5 Ransome,6 Spurr,7 Butler8 and others have contributed much. Many of the papers are largely of scientific interest but even these lay the foundation for the commercial application of the broader features of the geology. I have read many of these works with the keenest interest and pleasure; in fact, some have been read until some of the more important findings seem to be my own. In this paper, however, it is my aim to accept credit for little more than the labor of assembling some of the ideas of others. This is done with the hope that an interesting and valuable discussion will be the result. If some of the ideas presented should

Jan 1, 1927

By Roy A. Lindgren

SINCE the year 1643, when the first blast furnace in America for treating iron ore was built at Saugus, Mass., out of mica schist quarried in the neighboring district, the procurement of a suitable refractory for furnace lining has been a problem of concern to the operators of furnaces. The stacks built of mica schist continued to smelt iron ore until about 1836, when, according to F. H. Norton, the first firebrick were produced', at Queens Run, Pa. Other writers speak of brick having been molded and burned in Massachusetts about the year 1834. In 1841, Andrew Russell began to produce medium refractory plastic clay brick near East Liverpool, Ohio, that were used for lining blast furnaces'. The well-known Kentucky clay-producing district was not opened up until the year 1871, but since then it has produced a large percentage of the linings for iron blast furnaces. While some strides have been made by the refractories industry during the 100 years that have passed since the first firebrick were produced, it has been only during the last two decades that any real progress has been made towards bettering the product, even though the method of production had improved. Perhaps the fault lies with the user of the brick rather than with the producer, for not sooner demanding a supe¬rior product. During the past 15 years the tonnage produced per lining has increased from 500,000 gross tons to 1,000,000 gross tons, and now some furnaces are producing 1,600,000 gross tons and better on a single lining. It is true that enlarged capacity of furnaces and improved practice have accounted for some of this increase in tonnage, nevertheless better quality in firebrick must be given credit for its share. However, we are not yet ready to say that we have reached a maximum life of furnace lining. We believe that a better product can be produced and that the refractories industries of America will, through their extensive research depart-

Jan 1, 1937

By Rodney G. Ravenscroft

Leasing is not a new phenomenon. Experts have identified its origins as early as biblical times. It is a method of finance that has grown rapidly and is now used in most countries, including those of South East Asia, South America, the Middle East and even the People's Republic of China. Internationally, the leasing world divides fairly easily into two groups and this is determined, by and large, according to whether a country has Anglo-Saxon origins or not. Most of the Anglo-Saxon countries have seen tax-oriented leasing become a sophisticated means of financing the acquisition of large and costly items of equipment and large projects. Countries such as France, Spain and Japan have a highly developed leasing industry but it is not tax-oriented. This paper will not address leasing of this kind. LEASING - THE CONCEPT Wide acceptance of leasing as an alternative for financing capital equipment has grown with the recognition by the users of equipment that it is use and not ownership that generates profits. Whilst this seems obvious, memories of repossession of assets during the Depression and attitudes towards leasing as "last resort financing" have raised strong philosophical resistance that has only recently begun to be overturned. A financial lease is a commitment by way of contract between a user of equipment (lessee) and a financial owner (lessor) under which the lessee makes a series of payments in return for use of the equipment. The lessee is acquiring economic value associated with ownership but not ownership of the equipment itself - that remains with the lessor. A lease is a method of financing the use of an asset; other methods finance the assets themselves. It is the taxation aspects that then become important. The lessee is giving up some or all of the taxation benefits of ownership such as depreciation and investment tax credits. The lessor claims these benefits, as he is entitled to do as owner, and takes them into consideration when determining the level of lease payments that are necessary to generate his required rate of return. These lease payments are, of course, lower than they would have been without those taxation benefits. The lease payments themselves are fully tax deductible. This is tax shelter leasing. The lessor is acquiring taxation deductions that are applied fully and immediately against his other taxable income so as to reduce the amount of tax he is to pay to the revenue authorities. It is this concept that makes financial leasing work. Governments provide incentives by way of tax concessions to encourage capital investment. Governments presume that prudent capital investment will offer employment opportunities, generate sales and streamline economic activity. These, in turn, will lead to the collection of government revenue. It makes no difference at all whether these incentives are claimed by a commercial or industrial owner/user or by a financial owner who makes equipment available for use by industry. Rather, the issue is to ensure that if an incentive is available, it is used so as to achieve its desired results. No greater or lesser incentive is available for leasing and leasing does not misuse the taxation aspects of equipment ownership. The critical issue is whether the full value

Jan 1, 1985

By Anna H. Connard

SUMMARY The discussion focusses on developments in the debt/equity swap market since the Marte project was negotiated in early 1988. It emphasises carrying forward the recent market trends to anticipate the breadth and scope of debt/equity conversions for mine development in the 1990s. Secondary market prices of LDC paper, conversion values and political influences in the host countries and the use of near debt and commodity-based instruments as components of mine financing in debt/equity deals will be placed in the perspective of recent trends and expectations for the future. THE MARTE PROJECT The Marte mine is a gold porphyry deposit in Chile's high Atacama, for which financing was put together at the beginning of 1988. The Marte project was financed by a combination of common equity and loans. It was unusual that the equity infusions were made under different programs. Some of the international equity was infused with fresh funds via DL 600. Other common foreign equity was provided through the conversion of Chilean bank debt under Chapter XIX. On the loan side,. export credits for the import component of machinery and equipment were sought. Local bank financing was negotiated for the remainder of ' the project's anticipated cost. The debt conversion market in Chile was at its apex in terms of interest, activity and government support when the mine financing was arranged. The price of Chilean paper in the secondary market hovered about 62 to 66 cents per U.S. dollar of face value. Meanwhile, the Chilean government was negotiating conversion redemptions significantly closer to full face value. The government differentiated between debt paper exchanged for corporate investors who had sourced that paper in the secondary market, and debt paper held by bank investors who would incur a transaction loss in the conversion. The use of a combined DL 600lChapter XIX equity financing created different yield calculation bases for the various investors. Chapter XIX prevents remittance of profits before year 5 and capital repatriation before year 11. Investors choosing this vehicle have either for a corporate policy in the target project not to declare dividends until repatriation is allowed, or they have to seek uses for the peso liquidity that would be generated through dividend declarations in the early years. However, DL 600 investors face no such waiting period on dividends, nor do they have restrictions imposed on cashing out of the investment before the 11th year. Therefore, any equity structure with components of both investment mechanisms will have inherent differences in cost basis and future income flows for the various participants. This equity imbalance is defensible if the investment motivations of the parties are analyzed: a mining investor using fresh funds looks for a hurdle return on equity calculated at conservative commodity prices, with as much flexibility to reap upside benefits as possible; a mining investor choosing to invest through a debt conversion mechanism will realize a modest short term gain on the conversion, reducing his effective cost basis, but sacrificing some return because of the waiting period on repatriation of dividends. INVESTMENT OBJECTIVES A bank investor exchanging his own paper for an equity participation in a mining project realizes a conversion loss on the transaction. He seeks a risk adjusted acceptable hurdle rate of return to recoup that loss over time. Motivation for the bank investor to take that loss may be derived partly from a strategy to diversify its existing portfolio by internal policy and externally regulated guidelines. The bank will compare yields on its loan portfolio to that country with anticipated dividend flows discounted back at a risk adjusted rate. It will analyze the project with return objectives of yield enhancement over time and with

Jan 1, 1990

By B. Thomas Mansbach

INTRODUCTION The Overseas Private Investment Corporation ("OPIC") is a U.S. Government agency mandated to promote the economic development of the less developed countries ("LDCs") by assisting U.S. private investment in the Third World. Generally, investment decisions turn on the optimism or pessimism of the private sector's financial analysis of a project, with market price of product a major unknown in a very chancy set of projections. Discussions with American mineral companies, however, show that, more often than not, in developing country projects it is the political risks of investing in mineral exploration and extraction that pose the most serious deterrent to investment. In several of the projects described here, investments would not have been made if OPIC had not been involved providing support to the project sponsors and their funding sources. Clearly it is not OPIC's business to promote U.S. investment in a project which is not commercially viable, but OPIC's programs can neutralize the political uncertainties which act as disincentives to investment in otherwise commercially viable projects. That is to say, OPIC's programs are designed to reinforce market decisions and not distort them. Although OPIC is an independent agency of the U.S. Government, it is managed by a Board of Directors, the majority of whom come from the private sector. This, coupled with the statutory requirement that it be self-sustaining and operate with due regard for the principles of prudent risk management, requires that it operate on a business-like basis. Although established as a development agency, to the business public OPIC is both an insurance company and a lending institution, with two major programs which are available to U.S. investors in the minerals sector: its political risk insurance program and its finance program. Each has been specially tailored to the meet needs of the mining industry. The insurance program provides coverage against four basic types of political risk: Currency Inconvertibility, Expropriation, loss caused by War, Revolution and Insurrection and Interference with Operations as a result of an act of War, Revolution or Insurrection. Coverage against the risks of Civil Strife can be added to both War, Revolution and Insurrection coverage and Interference with Operations. Inconvertibility coverage provides protection against a deterioration in an investor's ability to convert local currency into U.S. dollars. This deterioration can be the result of either active or passive delays. Active delays consist of a change in exchange laws or regulations that leads to inconvertibility delays of 30 days or more. For example, if the exchange regulations at the time of contract execution allow an investor to transfer earnings equal to 18% of its registered capital per annum and the government of the host country later changes the law to allow conversion of only 12%, the insured would convert the 12% transferable under the new exchange regulations with the government foreign exchange authorities, delivering the remaining 6% to OPIC for conversion at 99% of the then prevailing rate of exchange. (OPIC does not cover devaluation risks.) Upon delivery of the local currency to OPIC, normally at the U.S. Embassy in the project country, the insured's account in the U.S. would be credited with dollars. Delays can also result from what is termed passive blockage, which includes administrative delays of more than 60 days (sometimes longer) caused by the bureaucratic tie-ups or pigeonholding of transfer requests, as well as delays suffered simply because the government of the host country does not have sufficient foreign exchange. The transfer procedure is the same as with active blockage - the local currency is delivered to OPIC in the project country and OPIC provides dollars in the United States at the then prevailing rate of exchange. The second coverage -- Expropriation -protects not only against the loss of the investment due to the well-known risks of expropriation, nationalization or confiscation by the host government, but also against

Jan 1, 1985

By Jan H. Hommen

TRENDS IN MINE FINANCE Reviewing historical trends may help in dealing with future funding strategies. The first trend is the increase in the use of debt to fund corporate America. Surprisingly, when comparing that with other corporates in the global marketplace, the U.S. does not look too poorly. Japanese, in particular, but also German companies, are much more leveraged than their U.S. counterparts. Note that in Japan and Germany the government and the consumer have shown substantial restraints when it comes to credit. Not so in the U.S. where the savings rate (4%) is much lower than that in Japan (20%) and in Germany (14%). As a result, the cost of leverage is substantially lower in Japan and in Germany than in the U.S. Lower debt costs in these countries allows one to obtain more of it for the same price. The close relationships between financial institutions, corporations and governments in Japan and Germany also make the risk of leverage more bearable and understandable. Also note that interest rate volatility in these countries is more subdued. The investor base in common stock is also changing. Private pension funds have been net sellers of equities during the last few years while public pension funds have been net buyers. Individuals are basically out of the market. It is estimated that over $330 billion of equity was retired in the U.S. through 1986-1988. The reasons are well known: restructurings, buy-backs, takeovers, mergers, and buy-outs. This de-equitization is likely to continue as the cost of equity capital is higher than the cost of debt capital, even on a before-tax basis. Because there has been no market for equity since October 19, 1987, junk bonds have replaced equity capital in the corporate finance structure. The non-investor-grade borrower has access to the public markets through high-yielding debt securities that often look like senior equity. Deregulation has also provided 24-hour markets; securitization can now liquify assets that before were rusting on balance sheets; information processing and communication tools give facts that are instantaneously available, creating the need for products to cover risk and exposures unknown before the start of the information and technology explosion. Thus we now have swaps, options, futures, options on futures, caps, as well as program trading, portfolio insurance, index funds, etc. Globalization will be unstoppable. Today's environment demands it. Corporations are now global competitors, even though they may have never shipped a product off-shore. Boundaries are disappearing and impediments have been removed. Stocks can be issued in a global offering with distribution in all major financial centers of the world. The high leverage of Japanese companies has made common stocks very scarce, which with the high savings rate, makes equity capital inexpensive in Japan. If markets were perfect everyone would issue stock in Tokyo and buy it back in New York. This would certainly stop the bleeding on the balance of payments. With the deficit balance of payments in America, it is no surprise that the cost of money is expensive here. The risk-return relationship on U.S. equity is not favorable enough to appeal to Japanese equity investors. The Tokyo-market, helped by a stronger yen, surpassed New York as the most important equity market in the world. The question is, will the Tokyo market hold up when Japanese domestic consumption increases at the expense of savings? In the U.S. debt markets, the plain vanilla debenture is making a comeback after a period of absence. Commercial paper has replaced short term bank borrowings for working capital funding by larger corporations. The banks have made an interesting comeback with loan sale programs that will continue to attract borrowers. There will be a continuing

Jan 1, 1990