ARTEM ABRAMOV, RYSTAD ENERGY
MORE STABLE INITIAL OUTPUT, BUT MORE AGGRESSIVE TERMINAL DECLINE
Mixed evidence from shale well decline rates
THERE HAVE BEEN MANY impressive observations on the
productivity improvements for shale wells over recent years.
These improvements have been driven by a combination of
boosted completion intensity, “high-grading” of drilling locations
and general technological advancements. While significant attention is paid to the increasing initial oil output per well, improvements in decline rates and consequently ultimate recovery
(EUR) are often overlooked. Largely, this is explained by the
necessity to make speculative assumptions of well lifetime and
long-term decline profile, but as of today, we do not possess
sufficiently long empiric history for shale wells.
When EURs are calculated with the same methodology across
all shale wells, their evolution over time can be reasonably compared with the changes in initial productivity. Figure 1 demonstrates how average oil 30-day initial production and 30-year
EUR changed from 2012-2014 to 2015-2016 in major liquid plays.
Only horizontal wells are included and EUR calculation is conducted at well level with a terminal decline assumption of 10%.
It can be concluded that both average EURs and IP rates increased
significantly over time in all plays. However, while IP rates improved by approximately 20% in the Bakken, the Eagle Ford, and
the Permian Delware and doubled in the Permian Midland, EURs
demonstrated a 40%-75% increase in these plays except for an
outstanding increase of 190% in Permian Midland.
The main contributor to the improvements in total recoverable
volumes is the growing popularity of restricted flow completions
and lower decline rates, which is a result of increased completion
intensity. In 2012, a typical shale oil well was fracked with 0.64
thousand lbs of sand per feet. This number has now more than
doubled. The Permian Delaware is one of the major plays where
restricted flows and pressure control have become standard.
Figure 2 shows how evolution of average cumulative oil output
per well changed from 2013 to 2016. Only official production
data is included and the dotted line for 2016 shows the most
likely continuation of cumulative production if wells continue
their current decline profiles.