Calculator – TRUApp Energy

1.Let's run key operational numbers for a TRADITIONAL upstream O&G producer Some expenses vary greatly between firms with small, medium and large production facilities. Adjust as needed Not ALL, but the KEY sections listed, to illustrate the value of TRUApp. Non-affected line items are omitted

Small

Small
Medium
Large

Revenue / Income $ 26,850,000

Production BPD+BOE

Oil Price USD per barrel

# of wells for per-well numbers below. shutdown days

The employee headcount (usually staff) can be reduced: Who'd do admin and support work?

The contractor headcount (usually craft) can be reduced: Who'd do craft and specialized work?

Other Key Costs can be reduced: What will not be done? Will things break often?

Some CapEx can totally be reduced: What is (negatively) affected? Future production???

Logically simplified and automated, integrated processes lead to much less effort to execute

Numerous disconnected I.T. systems replaced will directly reduce expenses

Single field "operating system", TRUApp, needs much, much reduced headcount in the same field!

All other costs that depend on personnel and processes will naturally get reduced. Big time.

Less Key, Operational Costs $ -76,545,044

Royalties & Tax "not “income tax“"

Employees

% office based

Contractors

% field based

Other Key cost expand

Reduce taxes?

Reduce staff? % reduction, saving of $

Can we have more people in the office? % office based

Reduce contractors? % reduction, saving of $

Can we move some to the office? % field-based

Reduce other key costs? % reduction, saving of $

Employee: starting with , reduced to (with negative consequences?)

Way less employees will be needed employees

80% office-based

Employees in the office/from home % in office

Contractors: starting with , reduced to (with negative consequences?)

Way less contractors will be needed contractors

80% field-based

Contractors working in the field % on the field

Other Key cost: reducing $ down to $

Better efficiency further reduces key costs expand

Gross, Key Operating Profit (or Loss) $ -49,695,044

$ -1,242,376,100 Unworkable

Field Life years, on average

Other Key cost details $ -14,974,617

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Office Rent of Office Space (combined if multiple offices)

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people in the office (based on your numbers above)

sq. ft per person (for an average office and cubicle space)

$ per sq ft per month of Class A office

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Office Expenses Usually averages 25% of rent: General, utilities, maintenance, repairs, supplies, subscriptions, dues, comms, internet, transportation, parking, gifts, furniture, fixtures, etc (non-IT)

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Insurance All business insurance, besides employee health insurance

$ Let's say a $10M bond costs 1%. Based on a size of the oilfield, a different bond amount is needed (rough estimates: small - $2.5M, med - $10M, large - $40M)

$ General Liability insurance with various riders needed, Our cost estimate is $1k per $1M in sales

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WorkComp from US BLS: $0.45 per hour worked for 2,200 annual of employees only

Well Work-over cost If, say, a gas lifted well needs to be worked over once every 3 years for a duration of 7 days

$ (pump jack vs gas lift?) total daily rate would be

$ daily rate of a work over rig

$ coil intervention unit

$ slickline

Turnaround

$ Daily cost of work (a 20k bpd facility could easily have a $15M cost for a 10 day turnaround).

$ based on the assumptions, we can see daily cost of turnaround work per 1 bpd then...

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Camp & Billeting Estimates are calc'ed based on renting beds, all inclusive costs. Owning camps changes this slighly

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field-based employees

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field-based contractors

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total beds needed (employees – non-rotational, contractors – all rotational thus share beds… usually you'd need more beds rather then less)

$ avg “all-in” daily cost per bed (full room+board) IF fully renting someone’s camp

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Travel Let’s take AK. Company paid travel would have 2 legs: Anchorage -> North Slope on a commercial + charter flight to the field

$ Round trip cost of a first leg, per person: on a commercial flight

$ Round trip of the second leg, per person: on a chartered flight (say a 6 seater charter plane costs $2.5k per round trip)

$ total per person travel, round trip. One person = 12 round trips per year

Tools & PPE Full cost including: purchase, R&R, re-stock, warehouse costs, audits, etc

Let's say 2,500 bpd facility could budget $200k/mo "all in" for this line item

$ per 1 bpd facility average

Spare Parts A.k.a. Materials Management, warehousing, etc (include multiple warehouses usually seetp by vendors but billed to your facility)

Let's say 2,500 bpd facility could budget $200k/mo "full cost" w/o labor

$ per 1 bpd average

Note: warehouse does increase costs! (but provides less downtime and less other costs)

Heavy Equipment A remote facility needs heavy equipment on site to operate. For easier calcs, let's "rent everything"

Let's say, a 1500 bpd facility could use: An excavator, 2 loaders, a dozer, a crane, 10 pickups, 3 mobile pumps, a hot oil truck, a compactor, a road grader…

$ total monthly

$ total annually

$ per 1 bpd averaged

$ excavator lease

$ loader

$ dozer

$ crane

$ pickups

$ mobile pumps

$ hot oil truck

$ compactor

$ road grader

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Full IT costs These are usually “buried” in budgets of various departments and CapEx, over various years... HARD to see "clearly"!

full-time equivalent “general” IT people will be needed, but their labor is already counted above An honest minimum of 100 “software tools” for a smaller facility (going up to 4,500 such tools for a super-major). Adjust per size here. "A tool" can be small (a mighty excel spreadsheet) or large ($10M Documentum-based customized EDMS)

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of such "average software tools"

$ for all of the software needed, on annual basis

$ Each tool costs “license” fee for “half the people” as users, on avg: one time (there are some for $500, and some for $30M…) - USUALLY A CAP-EX !!! (or "buried" in a departmental budget)

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Total licenses, if licensing is per person (good idea is a # of beds in the field + ppl in the office, see above).. Thus, a $500 tool for “half the users” actually costs $47,500

$ Actual “installed & implemented” cost averages to double the license cost (including implementation… usually costs way more then double… if the firm implementing that is “amazing”) - USUALLY A CAP-EX !!!

$ and then 25% in "FULL support per year" there after, however they actually break it down (includes upgrades ("software assurance type"), updates, training, user lvl 1 vs 2 vs 3 support).

$ software is usually fully replaced every 10 years, this gives us averaged annual cost

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I.T. infrastructure: At a minimum 40U of 2U servers, 20 servers @ $10k per server (7 years life), comms, networking, etc. This roughly depends on the size of facility and # of "software tools"

$ There are always "misc costs" in the I.T. world

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All the above could be represented on an averaged annualized cost, per BPD (thus facility size dependent)

Logistics & freight forwarding A remote facility needs various logistics expenses: freight forwarding and consolidation, etc

let's say 1,500 bpd facility would be $250k per year (without labor)

$ per bpd on average

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Misc other costs Usually equal% of "Other Key Costs"

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