Modular Production Equipment - Cost Savings
Examples of Wellhead and Compressor Station Savings
Formula (applicable to oil and natural gas)
Production Rate x Current Market Price = Revenue Per Day
Payment Terms (Days) – Installation Time (Days) = Total Days Generating
Total Days Revenue Generating x Revenue Per Day = Total Revenue Before Payment Due
Total Revenue Before Payment – Equipment Cost = Retained Revenue
Examples with natural gas production only - 1 skid only
Production Rate 5 MMSCFD x $2.00 = $10,000 Per Day
30 Day Terms – 1 Day Installation = 29 Days Rev Generating
29 Days x $10,000 Per Day = $290,000 Generated Rev.
$290,000 Generated Rev. - $35,897 Equipment Cost = $254,103 Retained Rev.
In summary, 86% retained earnings after equipment is purchased. Payback is 3.5 days in this example.
Examples with natural gas production only - Total compressor package
Production Rate 70 MMSCFD x $2.00 = $140,000 Per Day
30 Day Terms from equipment started = 30 Days Rev Generating
30 Days x $140,000 Per Day = $4,200,000 Generated Rev.
$4,200,000 Generated Rev. – $1,000,000 Equipment Cost = $3,200,000 Retained Rev.
In summary, 80% retained earnings after equipment is purchased. Payback is 7 days in this example (5 days when gas price at $2.75).
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