Decline curve analysis

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File:Decline curve analysis software image of exponential decline - hyperbolic decline.jpg
Decline curve generated by decline curve analysis software, utilized in petroleum economics to indicate the depletion of oil & gas in a Petroleum reservoir. The Y axis is a semi log scale, indicating the rate of Oil depletion (green line), and gas depletion (red line). The X axis is a coordinate scale, indicating time in years and displays the production decline curve. The top red line is the gas decline curve, which is a hyperbolic decline curve. Gas is measured in MCF (Thousand cubic feet). The lower Blue line is the oil decline curve, which is an exponential decline curve. Oil is measured in BBL, or Oil barrels. Data is from actual sales, not pumped production. The dips to zero indicate there were no sales that month, likely because the Oil well did not produce a full tank, and thus was not worth a visit from a Tank truck. The upper right Legend (map) displays CUM, which is the cumulative gas or oil produced. ULT is the ultimate recovery projected for the well. Pv10 is the Discounted present value of 10%, which is the Future value of the remaining lease, valued for this oil well at $1.089 Million USD.

Decline curve analysis is a means of predicting Oil well production behavior at different points in time based on the oil well past production history. Production decline curve analysis is a traditional means of identifying well production problems and predicting well performance and life based on measured oil well production.[1] Before the availability of computers, decline curve analysis was originally performed by hand on Semi-log plot paper. Currently, decline curve analysis software on PC computers is used to plot production decline curves for petroleum economics analysis.

Background

Oil wells usually reach their maximum daily output shortly after Completion (oil and gas wells). From that time they decline in production, the rapidity of decline depending on the output of the wells and on other factors governing their productivity. The production decline curve analysis of a well shows the amount of oil produced per unit of time for several consecutive periods; if the conditions affecting the rate of production are not changed by outside influences, the curve will be fairly regular, and, if projected, will furnish useful knowledge as to the future production of the well. By the aid of this knowledge the value of a property may be judged, and proper depletion and depreciation charges may be made on the books of the operating company.(Lewis 1918)[2]

Production decline curve analysis is important in determining the value in oil and gas wells in oil & gas economics. Decline curves are the most common means of forecasting oil and gas production. Decline curves have many advantages; they use data which is easy to obtain, they are easy to plot, they yield results on a time basis, and they are easy to analyze. Decline curves are also one of the oldest methods of predicting oil reserves.(Thompson 1985)

See also

References

  1. ↑ http://infohost.nmt.edu/~petro/faculty/Kelly/Deline.pdf
  2. ↑ http://www.archive.org/stream/transactionsmining59amer/transactionsmining59amer_djvu.txt

Lewis, J. O.; Beal, C. (February, 1918). "Some New Methods for Estimating the Future Production of oil Wells". American Institute of Mining Engineers Transactions. AIME. http://www.archive.org/stream/transactionsmining59amer/transactionsmining59amer_djvu.txt.

Thompson, Robert & Wright, John (1985), Oil Property Evaluation (2nd ed.), Golden, Colorado: Thompson-Wright Associates

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