Decline Curve Analysis of Shale Oil Production : The Case of Eagle Ford

Abstract: Production of oil and gas from shale is often described as a revolution to energyproduction in North America. Since the beginning of this century the shale oilproduction has increased from practically zero to currently supply almost half of theU.S. oil production. This development is made possible by the technology ofhorizontal drilling and hydraulic fracturing. Since the production has not been ongoingfor that long, production data is still fairly limited in length and there are still largeuncertainties in many parameters, for instance production decline, lifespan, drainagearea, geographical extent and future technological development. More research isneeded to be able to estimate future production and resources with more certainty. At the moment shale oil is extracted only in North America but around the worldinvestigations are starting to assess if the conditions are suitable from shale oilextraction elsewhere. The global technically recoverable resource has been estimatedto 345 Gb, 10% of all global technically recoverable resources. Health andenvironmental aspects of shale oil and gas production have not yet been investigatedthoroughly and there is a risk that these parameters may slow down or limit thespreading of shale development. This report aims to examine production patterns of shale oil wells by applying declinecurve analysis. This analysis comprises of analyzing historical production data toinvestigate how the future production may develop. The area of the study is the EagleFord shale play in Texas, U.S. The goal is to fit decline curves to production data andthen use them for making estimates of future production in the Eagle Ford. The production in the shale oil wells included in the study reach their peak already within a few months after production starts. After this point, production is declining.After one year, production has decreased by 75% and after two years the productionis 87% of the peak production. The hyperbolic decline curve has a good fit toproduction data and in many cases the curve is close to harmonic. It is too early todetermine whether the alternative decline curve that is tested, the scaling declinecurve, has a better fit in the long term. The report also investigates how the density of the petroleum affects the declinecurve. The result is that lighter products decline faster than heavier. A sensitivity analysis is performed to illustrate how different parameters affect thefuture production development. In addition to the wells’ decline rate, the assumptionson the maximum number of wells, the maximal production and the rate at which newwells are added affect the ultimately recoverable resource. These parameters all havelarge uncertainties and makes resource estimations more difficult.