When it comes to achieving optimal production, it's common to focus your attention on the stuff coming out of the ground, and how to achieve every efficiency around the extraction side of your business. While production optimization at the wellhead is a key component to operational efficiency, it's easy to forget the role preventative maintenance plays toward achieving the same goal. If you're not regularly and properly maintaining the equipment you rely on throughout your operation, your overall expenses can overwhelm the profitability of a well or your operation.
Whether it's a tank, compressor, pump jack, or facility, a properly maintained asset ensures that you maximize the return on your investment. Often, when producers focus on preventative maintenance, it is a result of the regulatory requirements for equipment inspections, meter calibration, and gas/liquids analysis. And while it is definitely important to ensure that you have controls in place when it comes time for an audit, particularly when the alternative is losing money to potential fines, there are greater financial benefits to consider.
Perhaps the biggest cost savings to be had with preventative maintenance is the reduction in downtime you can achieve. Below is a chart that shows an example of savings you could expect with a proper preventative maintenance program, simply by reducing the downtime associated with having your equipment break down unexpectedly.
| Additional revenue due to reduced downtime from equipment failures | |
|---|---|
| % downtime resulting from equipment failures (current) | 0.5% |
| % reduction in downtime with preventative maintenance | 25% |
| Current production level (BOE per day) | 100,000 |
| Current market price (per barrel) | $95 |
| Incremental revenue with preventative maintenance | $4,334,375 |
As you can see, this is a significant amount of money, without factoring in the difference in cost between maintaining a working asset vs repairing a broken one, any potential regulatory fines, and the savings associated with extending the life of your equipment. By any measure, preventative maintenance is an essential component to achieving operational efficiency, and could be the difference between economic viability and abandonment.
