Petroleum Economics - Analysis of Decline Curves (T.P. 1758, Petr. Tech., Sept 1944)

Since production curtailment for other than engineering reasons is gradually disappearing, and more and more wells are now producing at capacity and showing declining production rates, it was considered timely to present a brief review of the development of decline-curve analysis during the past three or four decades. Several of the commoner types of decline curves were discussed in detail and the mathematical relationships between production rate, time, cumulative production and decline percentage for each case were studied. The well-known loss-ratio method was found to be an extremely valuable tool for statistical analysis and extrapolation of various types of curves. A tentative classification of decline curves, based on their loss ratios, was suggested. Some new graphical methods were introduced to facilitate estimation of the future life and the future production of producing properties where curves are plotted on semilogarithmic paper. To facilitate graphical extrapolation of hyperbolic-type decline curves, a series of decline charts was proposed, which will make straight-line extrapolation of both rate-time and rate-cumulative curves possible. Introduction During the period of severe production curtailment, which is now behind us, production-decline curves lost most of their usefulness and popularity in prorated areas because the production rates of all wells, except those in the stripper class, were constant or almost constant. While production-decline curves were thus losing in importance for estimating reserves, an increasing reservoir consciousness and a better understanding of reservoir performance developed among petroleum engineers. This fact, together with intelligent interpretation and use of electric logs, core-analysis data, bottom-hole pressure behavior and physical characteristics of reservoir fluids, eliminated a considerable part of the guesswork in previous volumetric methods and put reserve estimates, based on this method, on a sound scientific basis' At the same time, a number of ingenious substitutes were developed for the regular production-decline curve, which made it possible to obtain an independent check on volumetric estimates in appraisal work, even though the production rates were constant. with the now steadily increasing demand for oil to supply the huge requirements of this global war, proration for reasons of than prevention of underground waste is gradually disappearing. More and more wells are, or will be, producing at capacity or at their optimum rates, as determined by sound engineering practice. With this trend, the character of producing wells seems to regain, more or less, its "individuality," and the old and familiar decline curve appears to have had a comeback as a valuable tool in the hands of the petroleum engineer. It may be timely, therefore, to retrace the development of decline-curve analysis in the past by presenting a brief chronological review of bulletins and papers published during the past three or four decades, which have