Although it seems obvious that field tanks with tank strappings should stand upright (and not lean), many of us have never stopped to consider the implications of a leaning tank.
What’s wrong with a leaning tank?
Plain and simple: leaning tanks cause the operator to “give away” oil to the purchaser.
What’s the reason for this?
If we recall our surface area lesson from high school geometry, an oval has a larger surface area than a circle. And, when measuring the volume of a cylinder (think: oil field tanks), a larger surface area means a cyclinder of a lesser height can carry the same amount of volume.
Essentially, when an oil tank leans, the surface area of oil increases and your pumpers will record lower gauge levels than they would at a tank that stands perfectly upright.
For example, if you have a lease that produces 1000 bbls of oil, and it has a storage tank that leans 5 degrees…
(1000 bbls hauled) X (cos. 5 degree tank lean) = 996 bbls
… (yeah, we hadn’t seen “cosine” in ages either) the volume of oil you “give away” to the purchaser is equal to 4 barrels out of every 1000 produced.
That’s right – if you produce 1000 bbls and you have a tank that leans 5 degrees, you’ll get paid for 996 of ’em.
If a well produces 20 barrels a day and its tank leans 5 degrees, at $90 oil this will equate to more than $2600 of foregone revenue per year.
Multiply this by 5 tanks at 5 different leases, and your oil purchaser is making out like a bandit!!
Leaning tanks not only affect the bottom line, they affect the operator’s ability to carry out an accurate and referenceable log of historical production.
So, next time you’re building-out a new lease (or refurbishing an old one), check the lean… better yet, check it twice.
Do you have any tips to keep operators from ‘giving away’ oil? If so, post them in the comments below!