A 12-unit Powder River operator:
what 4 points of runtime are worth

Big operators talk about runtime in basis points across hundreds of units. Sagebrush Energy has 12 compressors in Campbell County, Wyoming, and a pumper who knows every one of them by sound. When one goes down, it is a quarter of a well pad, not a rounding error.

Their fleet ran 94% last year. The rental contract guarantees 98%. The question the owner asked was simple: if we got to the guarantee, what would it be worth?

Four points, priced

Each unit moves about 60 BOE a day at a realized $72. 4 points of runtime across 12 units works out to:

The rent line is the one that usually gets the attention, and it is the smallest. 97% of the value is production.

Where the four points come from

On a 12-unit lease, 4,205 down unit-hours a year is not spread evenly. In Sagebrush's case two units with recurring ignition faults accounted for most of it. That is the practical upside of a small fleet: the problem has a name and a serial number.

We did not need a strategy. We needed to stop letting the same two units fail the same way.— the owner, in our scenario

Each point is worth knowing

At this fleet's size and price, each point of runtime is worth about $194,112 a year. That is the number to bring to the vendor when you ask for a faster response or a swap of the two problem units.