Expect oil prices to move down, then up, then WAY up


  • Peter

    If shale wells decline approximately 30% per year, their average life would be slightly more than 3 years.
    However, because pressure declines over time and depletion of oil, there must be a point where recovery of remaining oil is not cost effective.
    At the current price of $40/barrel, how far into the 3rd year would oil production continue? Is 20%? 10%? of existing oil left in the ground?

    Thank you!

    • art.berman


      You misunderstood my statement. Look at the associated slide. The decline rate of the production base–all wells–is about 30% per year.



    • Tom Hewett

      Peter, Tight gas and shale wells typically decline hyperbolically when plotted on semi-log scale. 1st year declines are commonly 75% moderating with time to rates that are closer to 8-10%. Well life is almost always longer than 3 years. 5-15 years will cover the range that most wells will recover the bulk of their reserves. The shale wells are leaving a lot of oil in the ground – 80-90% in most cases although dry natural gas recoveries can be much greater.

  • peter

    thank you both!

    tom’s explanation answered my questions!

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