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Installing Plunger Lift Systems In Gas Wells

(Cont’d)

$3/Mcf

$5/Mcf

$7/Mcf

$8/Mcf

$10/ Mcf

Value of Gas Saved

$21,972

$36,620

$51,268

$58,592

$73,240

Amoco then calculated savings resulting from avoided costs in three areas—electricity, workover, and chemical

When assessing options for installing plunger lift systems on gas wells, natural gas price may influence the decision making process. Exhibit 11 shows an economic analysis of installing a plunger lift system rather than blowing down a well to the atmosphere to lift accumulated fluid at different natural gas prices.

Exhibit 11: Gas Price Impact on Economic Analysis

at its Denver City and Sundown, Texas locations, replacing other beam lift applications.

Costs and Benefits

Amoco estimated that plunger lift system installation costs

  • -

    including plunger equipment and tubing conversion costs-

averaged $13,000 per well (initial pilot costs were higher than average during the learning phase, and the cost of tubing conversion is included).

treatment.

Overall,

Amoco

costs of electricity, workover,

$24,000 per well per year.

estimated that the avoided and paraffin control averaged

3

2

2

2

2

Electricity. Cost savings were estimated based on 50 percent run times. Using the costs from Exhibit 6, the estimated electrical cost savings were estimated to be $20 per day.

436%

624%

813%

907%

1095%

Workover. On average, Amoco had one workover per year per well to fix rod parts. With the old beam lift systems, the cost of this operation was $4,000, averaging about $11 per day.

$120,630

$176,157

$231,684

$259,448

$314,976

Payback Period (months)

Internal Rate of Return (IRR)

Net Present Value (i=10%)

Case Studies

BP (formerly Amoco) Midland Farm Field

removed

paraffin

accumulation

in

the

tubing.

Chemical treatment. The realized from avoided chemical

biggest savings were treatment. Amoco was

$13,000 per well per the plunger operation

able year

to save the approximately for paraffin control because

Amoco Corporation, a Natural Gas STAR charter Partner (now merged with BP), documented its success in replacing beam lift, rod pump well production equipment with plunger lifts at its Midland Farm field. Prior to installing plunger lift systems, Amoco used beam lift installations

with fiberglass rod strings. primarily 640 inch-lb pumping

The lift equipment units powered by 60

was HP

motors. Operations personnel noted were having problems with paraffin

that wells at the plating the well

field bore

and sucker rods, which blocked fluid with fiberglass sucker rod movement.

flow and Plunger

interfered lifts were

seen as

a possible

paraffin

downhole.

solution

to

inhibit

the

accumulation

of

Amoco began its single-well pilot

plunger

lift replacement

program with a

project.

Based on the

success of this

initial

effort,

Amoco

then

expanded

the

replacement

process to the entire Midland Farm field,

field. As a result of the success in the Amoco installed 190 plunger lift units

Increased Gas Production and Revenue

For

the

initial

plunger

lift

installation,

Amoco

realized

an

increase

in

gas

production

of

more

than

400

Mcf

per

day.

Upon

expansion

of

the

plunger

lift

installation

to

the

entire

field,

the

company

realized

notable

success

in

many

wells—although increase during

some showed little or the 30 day evaluation

no production

period.

Total

production production

increase (including both and non-emitted gas) across all

incremental wells where

plunger lifts were installed was 1,348 Mcf per

average annual gas savings, which

assumes a

day. The 6 percent

production

decline,

was

11,274

Mcf

per

well

or

approximately $78,918 per well at 2006 prices. Exhibit 12 and Exhibit 13 summarize the initial results and first year

economics installation.

of

Amoco’s Midland Farm plunger In addition to the gas savings and

lift cost

savings

from the

plunger lift installations,

Amoco

realized

a

one-time

gain

from

the

sale

of

surplus

pumping

units

9

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