Natural Gas Compressors and Compression Equipment -
Benefits of Natural Gas Compression

American Gas Compression Services Inc.
Compression Profitability, Revenues & Profit, Increased Oil Production 
  AGCSI
240 West Jessup
Brighton, CO 80601
Phone (303) 659-8203
Fax (303) 659-1750

Copyright 2006 AGCSI
All Rights Reserved
 

FORMULA
Given break even cost annual $25,000 (includes compressor rental, maintenance, tax,
RI & ORRI* thus, (sales price X quantity X 365) - $25,000 = Increased Annual Net Revenue X 0.7
(tax, RI & ORRI = 0.3 of gross revenue)

* Royalty Interest and Overriding Royalty Interest

 

Benefits of Natural Gas Compression

Compression allows a well to produce higher volumes of gas, generating higher revenues. In some cases, compression is required for a well to produce at all.

As seen on the following incremental cash flow graph, wells with compression delivering more than 15 MCFD add net dollars to your profitability.

This graph demonstrates the additional net revenues received when compression is added. Net Revenues are defined as gross sales less operating expenses, which include royalties, taxes, pumper fees, administrative fees, and compression costs.

The excess of the revenues generated from increased gas production volumes over the costs of compression are profit for your company.

The chart does not include increased oil production revenues which often accompany the gas production as compression can reduce bottom hole pressures which allow more oil to flow into the well bore. An increase of as little as one barrel per day at $70 can generally net revenue equal to the cost of compression rental.

To find out more about the costs of compression, visit the Compression Consultation page and send us the information needed to determine your compression requirements.


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American Gas Compression Services, Inc. (AGCSI)  rents, sells and services gas compression equipment,
including remanufactured and new equipment, and provides gas compression services.
AGCSI is a wholly owned subsidiary of American Atlas Resource Corporation.