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Installing Plunger Lift Systems In Gas Wells

(Cont’d)

Exhibit 9: Economic Analysis of Plunger Lift Replacing a Beam Lift

Plunger Lift Maintenance

($1,300)

($1,300)

($1,300)

($1,300)

Electric Cost per Year

$0

$0

$0

$0

$0

Year 0

Year 1

Year 2

Year 3

Year 4

Value of Gas from Increased Production and Avoided Emissionsa

$51,114

$51,114

$51,114

$51,114

$1,300

$1,300

, $1 300

, $1 300

$1,000

$1,000

$1,000

$1,000

$13,200

$13,200

$13,200

$13,200

Plunger Lift Equipment and Setup Cost

($7,772)

Salvage Value Beam Lift Equipment

Avoided Beam Lift Maintenance (1 workover/yr)

Avoided Beam Lift Electricity Costs (10HP motor)

Avoided Chemical Treatments

$21,300

Net Cash Inflow

$13,528

$65,314

$65,314

$65,314

$65,314

NPV (Net Present Value)b =

Payback Period =

a b

Gas valued at $7.00 per Mcf for 7,300 Mcf due to increased production and 2 Mcf from avoided emissions per event (based on 1 workover per year). Net present value based on 10 percent discount rate over 5 years.

Year 0

Year 1

Year 2

Year 3

Year 4

Value of Gas from Increased Production and Avoided Emissionsa

$51,268

$51,268

$51,268

$51,268

($1,300)

($1,300)

($1,300)

($1,300)

$0

$0

$0

$0

$13,200

$13,200

$13,200

$13,200

Exhibit 10: Economic Analysis of Plunger Lift Replacing Blowdown

Plunger Lift Equipment and Setup Cost

Plunger Lift Maintenance

Electric Cost per Year

Avoided Chemical Treatments

$(7,772)

$0

Net Cash Inflow

($7,772)

$63,168

$63,168

$63,168

$63,168

NPV (Net Present Value)b =

Payback Period =

a b

Gas valued at $7.00 per Mcf for 7,300 Mcf due to increased production and 24 Mcf from avoided emissions per event (based on 12 blowdowns per year and 2 Mcf per blowdown). Net present value based on 10 percent discount rate over 5 years.

Year 5

$51,114

($1,300)

$0

$1,300

$1,000

$13,200

$65,314

$261,119

Immediate

Year 5

$51,268

($1,300)

$0

$13,200

$63,168

$231,684

2 months

8

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