Everything is faster in the Permian - including decline rates

Crude For Thought episode #43 show notes

1 minute read

Episode #43: Everything is faster in the Permian

In this week's episode of Crude For Thought, we look at why everything is accelerating in the Permian Basin including terminal decline rates for oil wells. The impact on well level economics is relatively insignificant, but what if using historical norms leads to some fairly inaccurate forecasting assumptions. Ryan Duman and Robert Clarke discuss our latest "Permian Risk" insight.

Get your copy of this complimentary report on Permian decline rates

While the Permian is home to thousands of vertical wells that have been producing for decades, given the relative immaturity of the Wolfcamp compared to other zones, pure field data for horizontal tight-oil wells only goes back about eight years. Consequently, operators and investors have routinely used proxy values, based on decades-old data from vertical wells and other shale plays, to model tight-oil terminal decline rates.

After nearly a decade of production, the first wave of Permian tight-oil wells are beginning to enter maturity and operators face tough questions regarding their late-life performance. In our report, "Everything is accelerating in the Permian, including decline rates," we examine the inherent risks of this largely unstudied practice, compare it to actual mature Wolfcamp well results, and model the long-term supply and cash flow implications to operators and investors.

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