Depletion Rate

A topic I don't see addressed very often is the striking production decline rates of shale wells. A year ago, companies were finding Marcellus horizontal wells deplete about 75% the first year and 90% within 5 years. Link:

 

http://www.thefriendsvillegroup.org/declinecurve_range.pdf

 

Although the industry business model is to keep moving on and drilling (thus the beauty of the huge Marcellus), the impact of this decline is huge on individual landowners and their finite wells. A couple royalty calculators have recently been pulled off of the internet due to their failure to accurately project this decline. We are all focusing on the initial rate of production reports (average of 5 mmcfe, high wells of 13-14 mmcfe), and not the reality that ongoing royalties will be 10% of these initial calculations... Don't buy your yacht on credit.

 

Has anyone heard or read any current reports or experience on decline rates?

 

Views: 1598

▶ Reply to This

Replies to This Discussion

Permalink Reply by Matthew Santiago on October 21, 2010 at 10:13am
Contact an individual "outback" on this forum. He believe he will have the info your looking for directly from the source.
Permalink Reply by Tom on October 21, 2010 at 8:46pm
I'm pretty sure they report on a quarterly basis. Someone needs to copy or print out some of these flow rates before they post the new figures. That will give you some indication of decline. What Mike said is very true however. There are many factors this early in the game. The Greenzweig well in Bradford County was producing 3.3 initially when it started up in July and now I understand it's up to 4+. My brain is sore trying to out-figure these energy companies.
Permalink Reply by Dave Stewart on October 22, 2010 at 2:47pm
This lengthy article does a decent job of highlighting problems with decline curves along with some other issues:
http://www.rigzone.com/news/article.asp?a_id=99414
It makes quite a few observations that merit some thought.

It does appear that there is little public data that can be used to put together decline curves. I would agree that the best bet is to work with the conservative assumptions that are available. Drilling companies no doubt have good data on areas in which they are drilling. However, competition prevents them from being too specific.

RSS

1 2
+ Add a Discussion + Add a Blog
+ Add a Photo + Add a Video

Local Groups




Stay Connected
Like Us

Follow Us

Subscribe

Join our lists

Top Content on GMS 

1 Have you received an offer to buy your minerals? What State/County/Township are you in?

Have you received an offer to buy your minerals? What State/County/Township are you in?
2 Ohio's Utica shale is shaping up as a gas-rich, not oil-rich play

Ohio's Utica shale is shaping up as a gas-rich, not oil-rich play
3 George Mitchell: Hydraulic Fracturing Pioneer Turns 94...wish him well on GMS

George Mitchell: Hydraulic Fracturing Pioneer Turns 94...wish him well on GMS
4 Back From Top Secret Mission

Back From Top Secret Mission
5 So, is that it? Are we done?

So, is that it? Are we done?
6 determining a unit

determining a unit
7 DRILLING damaged water supplies in PA ...

DRILLING damaged water supplies in PA ...
8 ODNR Projections For Utica Shale Future Production

ODNR Projections For Utica Shale Future Production
9 Rumor: Chevron looking to buy a big block of deep rights.

Rumor: Chevron looking to buy a big block of deep rights.
10 Lies ! Damnable Lies !

Lies ! Damnable Lies !

advertisements