Decline curves are essential in the oil business. They allow a company to assess how much oil could be pumped from a particular well in its lifetime, otherwise known as Estimated Ultimate Recovery or EUR.
These statistics along with the projected price of oil allow a company to project their future earnings for investors in hopes that their stock will be fairly valued by investors. Since an oil or gas well’s production capability declines as it is produced, the production decline over time may be plotted.
Typically decline rates most commonly follow an exponential, hyperbolic, or harmonic decline curve when production rate over time is plotted on a Cartesian scale. (Dean and Mireault, 2008) Conventional reservoirs tend to follow an exponential decline curve but the performance of unconventional low permeability reservoirs (like the Niobrara) are better modeled using hyperbolic decline trends. (Nysveen, 2013 )
Assembled below are the reported decline curves from some of the more notable companies operating in the Niobrara play. The decline curves presented were obtained from each company’s investor relations section on their corporate website. The decline curves show averages of actual production, or projections, of each company’s Niobrara wells and may be sorted by formation unit, proximity to the core Wattenberg field, or the length of a horizontal lateral.
Noble Energy’s decline curve graph shows production sorted by medium and long lateral length. The medium length laterals tend to IP at about 500 – 600 boe/d and quickly reach peak production of 700 boe/d within 90 days. The decline curve closely follows a 470 Mboe/d EUR decline curve. The long lateral curve looks like it peaks at a slightly higher peak production of 750 boe/d for about 70 days and then follows a decline curve somewhere between 750 Mboe and 1 MMboe, The decline curves suggest that Noble’s long laterals are increasing reserves and flattening production decline.
Anadarko’s decline curve graph is as simple as they get. It is about a year old and was painstakingly retrieved from their presentation archive. The curve shows IP at 800 BOE/d and flattening towards 300 BOE/d within 160 days. This curve is typical of what other Niobrara operators are finding.
PDC Energy’s decline curve graph shows the performance of the company’s wells as compared to a Middle Core Wattenberg Field Niobrara well which follows a 400 Mboe EUR (3 phase) well. PDC’s Niobrara C bench wells reach peak production within 60 days at about 500 Boe/d while the Niobrara B bench wells reach peak production at 400 Boe/d. The Codell formation wells appear to reach peak production at 400 Boe/d and follow the same curve as their Niobrara B wells.
Carrizo Oil and Gas The Carrizo decline curve shows IP at 600 BOE/d declining to 100 BOE/d within 6 months and flattening out at 50 BOE/d in 24 months. The Carrizo plot also shows the trend line for cumulative production.
Bill Barrett Corporation
Bill Barrett shows decline curves for their properties in the Core Wattenberg, Northeast Wattenberg, and Extended Reach Laterals in the NE Wattenberg. Comparisons of these charts show that Core Wattenberg wells tend to IP higher than the NE Wattenberg wells at 500 Boe/d vs 400 Boe/d.
The decline curve for the standard length lateral from NE Wattenberg and Core Wattenberg decline to about 80 Boe/d at 36 months. Bill Barrett has had some success with their Extended Reach Laterals (XRL) in NE Wattenberg managing to obtain higher IPs of 650 Boe/d and a flatter decline curve to 150 Boe/d at 36 months.
Whiting’s decline curve shows a typical Wattenberg Niobrara type curve with an IP of 400 BOE/D declining to about 70 BOE/D at 36 months. At 10 years a well following this curve would be producing 30 BOE/D.
Bonanza Creek Energy
Bonanza Creek Energy’s decline curve average for their Niobrara B bench wells closely tracks the decline of a 313 Mboe Type Curve. The initial 30-day rate was 458 Boe/d for their Niobrara B Target Type wells.