The following are cost spreadsheets from area well data. To the best of our knowledge, it is a true representation of the costs involved. By itself though, it is a partial analysis. And while it has great potential, it can potentially mislead the decision making process. The Bulk Handling system must be cost justified, but not limited by traditional criteria used by drilling & operational engineers. By placing the complete analysis and decision making in terms of spreadsheet analysis of those terms which are not easily quantifiable and are familiar, the engineer may become biased towards the exact quantifiable magnitudes. It is, to a large extent, those items which are not easily quantifiable that weighs the decision of using bulk handling systems with drilling fluids. We are confronted with a requirement to change the nature of the traditional operation decision making process to include fields of knowledge wider than those normally employed. Other expertise needs to be included to provide estimates of more difficult costing functions.   
 
Several of these Costing Functions are :    
 
  • Safety : What are the savings or productivity increases due to fewer LTA's in terms of insurance premiums or morale ?
  • Environmental : What are the savings or incresed return associated with a more motivated crew working in a dust free and clean work area ?
  • Health : What is the reduction in man days lost due to dust type, or chemical burn related injuries ?
  • Labor : How do we quantify the reduction in manpower, not just in cutting sacks, cleaning debris, or adding chemicals, but rather in work enhancement of a better working environment ?
  • Technical : How much chemical is saved by having all chemicals added consistantly by a computer avoiding fluctuating properties.
 
Liquid Dispensing System Cost Effectiveness
( Typical Oil / Mud Job )
    
  • Pallets
                    $ 520.00
  • Drum Disposal
                    $ 5200.00
  • Spilled or overtreatment
                    $ 8300.00
  • Reduced Labor
                    $ 2600.00
 
Total Savings
                   $ 16620.00
 
Cost of Liquid Syatem                     $ 13260.00
Liquid unit & 8 liquid containers 550 gal.
 
Net Savings
 
                    $ 3360.00   
 
 Does not include problems associated with handling 55 gallon drums
 
Cost Effectiveness
 
  • Wraps & Pallets
                    $ 6282.00
  • Disposal cost
                    $ 8350.00
  • Lost & damaged material
Conservative estimate  8% dry product.   
100% of product used.
                    $ 17700.00   
   
   
 
  • Reduced Labor
No handling or cutting traditional paper sacks, 7 hrs. labor saved  each day.
                    $ 5040.00   
   
   
 
 
Total Savings
                 $ 37372.00
 
Cost of Bulk Syatem
                 $ 18900.00
 
 
Two Weigh Base, One PWI Computer,   
Ten Bulk Containers.  Total cost of system based on 60 day well.
             $ 315.00 X 60 days   
 
 
 
 
Net Savings Per Well
                 $ 18472.00
 
This savings excludes intangible dollars
sush as injuries, liabilities, environmental, etc.
Bulk Systems eliminate, or greatly reduce these costs as well.
 
Frequently all that is assessed is the direct cost, the more easily identified costs. The spreadsheet itself becomes the sole decision making tool. The use of Bulk handling systems is easily justified when a broader view is taken. A new method of analysis is used , in which the Operations Engineer ( and the spreadsheet ) is but one of several inputs to the decision process. Other disciplines are included and involved, they are : Logistics, Safety, Quality  Assurance, Chemistry, Medical ( or Health ), Environmental, Risk Management, and finally Top Management.
 

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                    P.O. Box # 2905   Hammond, La. 70404     Office # 504 542-8265   Fax # 504 542-7947 
 
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