The Decline and Ultimate Production of Oil Wells, with Notes on the Valuation of Oil Properties Page: 25
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METHOD OF SHOWING THE DECLINE OF OIL WELLS.
formation, it is impossible to make such allowances, and it is then
necessary to use the curves as being the best available basis of
estimate.
DIFFERENCES IN DECLINE OF PROPERTIES IN BARTLESVILLE FIELD (OKLA.).
To show further the fundamental error in promiscuously using
such curves without making allowances for differences in the rate of
decline of large and small wells, figure 4 has been prepared. It
shows the rates of decline of properties in the Bartlesville pool
(Okla.), on which the average daily production per well the first
year was different. In constructing these curves, all properties were
separated into six classes according to the average daily output per
well during the first year. These six classes were those in which
the wells averaged the first year zero to 10 barrels. 11 to 20 barrels, 21
to 30 barrels, 31 to 40 barrels, 41 to 50 barrels, and in excess of 50
barrels a day. The first year's daily production for each property
was called 100 per cent, and the production for succeeding years for
each property was shown as a percentage of the first year's produc-
tion. The average yearly percentages for each class thus obtained
were plotted on logarithmic coordinate paper, because with this
kind of paper the curves came out more nearly as straight lines.
The difference in decline for the different classes of wells is strik-
ing. For example, the wells which made less than 10 barrels daily the
first year average during the second year 61 per cent of that; whereas
wells that made more than 50 barrels a day the first year average
during the second year about 29.5 per cent as much. The rate of
decline of wells averaging between 10 and 50 barrels a day the first
year varied regularly between these two extremes.
The dashed line shows the composite curve for all wells and clearly
exemplifies the error of using the average curve for the whole field
in estimating the future production of wells making less than 10
and more than 50 barrels a day. Had the average curve been pro-
jected at the end of the second year, as shown by the dotted line, it
would have come close to giving an accurate prognostication of the
future decline of the average well in that pool.
APPLICATION OF LAW OF AVERAGES.
Average, or composite, curves are based on the law of averages.
There are, of course, many properties that will not follow any of
the decline curves shown in figure 4. Some properties produce less
than they should because of natural and artificial causes that affect
the yield. In fact, there are several factors that can cause the decline25
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Beal, Carl H. The Decline and Ultimate Production of Oil Wells, with Notes on the Valuation of Oil Properties, report, 1919; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc12371/m1/37/: accessed April 19, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.