Bulletin 228 Estimation of Underground Oil reserves by Oil Well Production Curves

This bulletin reviews, in the light of recent experience, the use of production-decline curves in estimating the future production of oil from wells. It deals with the estimation of the reserves of recoverable oil in properties already producing or in those adjacent to them, takes cognizance of the physical laws governing expulsion of oil from oil sands, and shows how the production-decline curve can be made to utilize these laws in estimating reserves and rates of production. The valuation of oil properties should be based on the total amount of oil recoverable from a property by the methods in use, the rate of recovery, the cost of production, and the selling price. Numerous other curves besides those for reserves and rates of production may be formed from the production-decline curve and will present desired information in a convenient time-saving form. These curves also are described. Methods developed before the production-decline curve method was used are briefly discussed in order that the principles on which estimations of oil reserves are based may be made plain. The construction of curves and tables for estimating future production of individual wells and of average wells in most of the important oil districts of the United States is described and operating problems that may be solved by the use of production-decline curves are discussed. The bulletin does not deal with costs, oil prices, or the methods of evaluating oil properties. Many engineers have amply demonstrated the value of the production- decline curve method by forecasting within reasonable limits the production of many thousands of wells and tracts. The value of similar estimates depends however, on (1) the application of trustworthy methods; (2) the care and judgment of the estimator; and (3) the length and reliability of the records and the accuracy of ofher information used in estimating future production. When adequate records and information are available, experience has shown that It qualified engineer can forecast production far more accurately than has been deemed possible, except where the usual conditions governing the expulsion of oil from a sand have been radically changed by applying compressed air or by flooding with water, or, to a less degree, by using vacuum. In general, the production-decline curve method, though there are limits to its accuracy, is far more trustworthy than any other.