Petroleum Reserves

Estimation Methods
© 2003-2004 Petrobjects
www.petrobjects.com

Decline Curves
A decline curve of a well is simply a plot of the well’s production rate on the y-
axis versus time on the x-axis. The plot is usually done on a semilog paper; i.e. the
y-axis is logarithmic and the x-axis is linear. When the data plots as a straight line,
it is modeled with a constant percentage decline “exponential decline”. When the
data plots concave upward, it is modeled with a “hyperbolic decline”. A special case
of the hyperbolic decline is known as “harmonic decline”.
The most common decline curve relationship is the constant percentage decline
(exponential). With more and more low productivity wells coming on stream, there
is currently a swing toward decline rates proportional to production rates
(hyperbolic and harmonic). Although some wells exhibit these trends, hyperbolic or
harmonic decline extrapolations should only be used for these specific cases. Over-
exuberance in the use of hyperbolic or harmonic relationships can result in
excessive reserves estimates. Figure 5 is an example of a production graph with
exponential and harmonic extrapolations.

Figure 5: Decline curve of an oil well

Decline curves are the most common means of forecasting production. They
have many advantages:
Data is easy to obtain,
They are easy to plot,
They yield results on a time basis, and
They are easy to analyze.

© 2003-2004 Petrobjects 1
www.petrobjects.com
 Petroleum Reserves
Estimation Methods
© 2003-2004 Petrobjects
www.petrobjects.com

If the conditions affecting the rate of production of the well are not changed by
outside influences, the curve will be fairly regular, and, if projected, will furnish
useful knowledge as to the future production of the well.

Exponential Decline
As mentioned above, in the exponential decline, the well’s production data
plots as a straight line on a semilog paper. The equation of the straight line
on the semilog paper is given by:

q = qi e − Dt

Where:

q = well’s production rate at time t, STB/day

qi = well’s production rate at time 0, STB/day
D = nominal exponential decline rate, 1/day
t = time, day

The following table summarizes the equations used in exponential decline.

Exponential Decline b = 0
Description Equation
Rate q = qi e − Dt
q −q
Cumulative Oil Production Np = i
D
D = − ln (1 − De )
Nominal Decline Rate q −q
De = i
qi
Effective Decline Rate De = 1 − e − D
ln (qi / q )
Life t=
D

Example #3: A well has declined from 100 BOPD to 96 BOPD during a one
month period. Assuming exponential decline, predict the rate after 11 more

© 2003-2004 Petrobjects 2
www.petrobjects.com
 Petroleum Reserves
Estimation Methods
© 2003-2004 Petrobjects
www.petrobjects.com

months and after 22.5 months. Also predict the amount of oil produced after
one year.

Solution:

qi = 100 BOPD
q = 96 BOPD
t = 1 month

1. Calculate the effective decline rate per month:

qi − q 100 − 96
De = = = 0.04 / month
qi 100

2. Calculate the nominal decline rate per month:

D = − ln(1 − De ) = − ln (1 − 0.04 ) = − ln (0.96) = 0.040822/month

3. Calculate the rate after 11 more months:

q = qi e − Dt = 100e (−0.040822 x12 ) = 61.27 BOPD

4. Calculate the rate after 22.5 months:

q = qi e − Dt = 100e (−0.040822 x 22.5 ) = 39.91 POPD

5. Calculate the nominal decline rate per year:

D = 0.040822/month x 12 = 0.48986/year

6. Calculate the cumulative oil produced after one year:

qi − q (100 − 61.27 ) STB / D

Np = = * 365D / Y = 28,858 STB
D 0.489864 / Y

This completes the solution.

© 2003-2004 Petrobjects 3
www.petrobjects.com
 Petroleum Reserves
Estimation Methods
© 2003-2004 Petrobjects
www.petrobjects.com

Hyperbolic Decline
Alternatively, if the well’s production data plotted on a semilog paper
concaves upward, then it is modeled with a hyperbolic decline. The equation
of the hyperbolic decline is given by:

1
q = qi (1 + bDi t )
−
b

Where:

q = well’s production rate at time t, STB/day

qi = well’s production rate at time 0, STB/day
Di = initial nominal exponential decline rate (t = 0), 1/day
b = hyperbolic exponent
t = time, day

The following table summarizes the equations used in hyperbolic decline:

Hyperbolic Decline b > 0, b ≠ 1

Description Equation
1
q = qi (1 + bDi t )
−
Rate b

qib
Cumulative Oil Production Np =
Di (1 − b )
(qi1−b − q1−b )
1
[
Di = (1 − Dei ) − 1
b
−b
]
Nominal Decline Rate q −q
Dei = i
qi
Effective Decline Rate De = 1 − e − D

t=
(qi / q ) − 1
b

Life
bDi

Example #4: Given the following data:

qi = 100 BOPD
Di = 0.5 / year
b = 0.9

© 2003-2004 Petrobjects 4
www.petrobjects.com
 Petroleum Reserves
Estimation Methods
© 2003-2004 Petrobjects
www.petrobjects.com

Assuming hyperbolic decline, predict the amount of oil produced for five
years.

Solution:

1. Calculate the well flow rate at the end of each year for five years using:

1 1 1
q = qi (1 + bDi t ) = (100)(1 + 0.9 x 0.5 xt ) = 100(1 + 0.45t )
− − −
b 0.9 0.9 BOPD

2. Calculate the cumulative oil produced at the end of each year for five
years using:

qib
Np =
Di (1 − b )
(qi1− b − q1− b )

=
(100)0.9 (100(1−0.9 ) − q (1−0.9 ) ) 365 days
0.5(1 − 0.9 ) year
= 460598.9 * (1.584893 − q 0.1 )

3. Form the following table:

Cum. Yearly
Year Rate at End of Year
Production Production
0 100 0 -
1 66.176 29,524 29,524
2 49.009 50,248 20,724
3 38.699 66,115 15,867
4 31.854 78,914 12,799
5 26.992 89,606 10,692

This completes the solution.

Harmonic Decline
A special case of the hyperbolic decline is known as “harmonic decline”,
where b is taken to be equal to 1. The following table summarizes the
equations used in harmonic decline:

© 2003-2004 Petrobjects 5
www.petrobjects.com
 Petroleum Reserves
Estimation Methods
© 2003-2004 Petrobjects
www.petrobjects.com

Harmonic Decline b = 1
Description Equation
qi
Rate q=
1 + bDi t
q q
Cumulative Oil Production N p = i ln i
Di q
Dei
Nominal Decline Rate Di =
1 − Dei
q −q
Effective Decline Rate Dei = i
qi

t= i
(q / q ) − 1
Life
Di

© 2003-2004 Petrobjects 6
www.petrobjects.com