Life Cycle of a WellThe new oil and gas investor does not normally have a good understanding of the nature of oil and gas production decline curves. Initial observation of high productivity wells can result in misunderstanding and alarm. All oil and gas wells decline in productivity over time as they produce. The rate of production is variable based on a number of factors, including formation type, formation pressure, porosity, permeability; production constants such as: choke size, co-produced water, pipeline capacity, pipeline back-pressure and or capability of compressor to counter the back pressure; produced contaminants, required treatment and the treatments impact on production level. Regardless, most highly productive oil and gas wells decline noticeably during the first 3 - 6 months, as the initial pressure drops. The tendency is to visualize a straight line trend that continues to go to zero within a very few years. Such a straight line does not accurately represent the nature of the decline curve. Oil and gas well production decline curves do not function in accordance with straight lines. They operate in accordance with curvilinear, more complex relationship. The industry does not use normal linear graphs to analyze production curves. It uses logarithmic graphs. Logarithmic graphs show a steady percentage reduction as a straight line, whereas a normal linear graph would show it as a sort of hyperbolic curve. Most oil and gas wells production decline curves demonstrate declines at a gradually reducing percentage rate over time. Tyler County Austin Chalk Wells Timberwolf Wells The next series of graphs shows the forecasted production of the two B.W.O.C. Timberwolf wells in Tyler Count – the Timberwolf #1 Woodbine well and the Timberwolf #2H Austin Chalk well, based on the B.W.O.C. 2005 year-end reserve report by H. J. Gruy Engineering. The wells are shown in both the standard linear graph form as well as the logarithmic graph form. The graph demonstrate the different decline curves for the two types of wells, as well as how the two types of graphs illustrate the decline curves. As the viewer can readily see, the logarithmic form much better represent the actual decline curve of the wells. To access the graphs, either click on theTimberwolf link below , or the Timberwolf button at the top of the page.
Brazos Valley The next graph shows the currently producing B.W.O.C. horizontal Brazos County Woodbine wells, as of June 2006, compared to the average of other vertical Brazos County Woodbine wells. The BWOC horizontal wells indicate that they are following the same pattern as the vertical wells, just at a higher level. The exception is that the vertical wells almost always needed to put quickly on pump, while the horizontal wells flow for 8-12 months before needing to be placed on pump. To access the graph, either click on the Brazos Valley link below, or the Brazos Valley button at the top of the page. Copyright B&R Energy LLC |