Sunday, December 12, 2010

Steady_T justifies $10 / bbl cost estimate for P2O

All the needed information has been disclosed to support the claims of profitability.

The cost of the input material has been described as free.

That leaves the operational costs of the processor and the amortization costs to be computed.

The cost of the processor has been quoted at $200,000. Estimates by others have the cost of the building site prep etc in the vicinity of $1,000,000 for the first processor and little more for the second one.

Operational costs will be low since the process itself provides the heating gas, so the operational costs will be most personnel and maintenance.

Production has been quoted as 109 bbl / 24hrs. Twice that for 2 machines. 218 bbl /24 hrs. Assume selling it at current WTI price of $85 / bbl = $18,530 per day income.

At a cost of $10 / bbl that results in $2180 per day for salaries, operational expenses, maintenance, and amortization.

Lets say 2 employees @ $30/hr ,including benefits etc., X 24 hrs a day = $1440/ day leaving $740 / day for operational expenses, amortization, and maintenance.

Amortization of $1.5 mil over at 10 year period is $410 / day.

Leaving $330 / day for maintenance and misc operational expenses.

Yeah.... I think that there is a legitimate basis for a $10 / bbl cost estimate.

1 comment:

  1. 2 employees for 24hr coverage? From where does the 25+ tons/day come? Perhaps smaller units in a network so that trucking is minimized-gas stations in reverse.


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