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:
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?