Experience RS

Well Declines Pinch Pipeliners

Base declines of existing wells are becoming increasingly important to midstreamers, the companies that gather and process oil and gas, as the prospect of minimal activity in 2020 becomes real. The base decline of a midstreamer's system is calculated as the percentage drop in volumes assuming no new wells are connected. The higher the base decline percentage, the faster volumes shrink in a given time frame.

Production additions, represented by the green wedge in Figure 1, offset those declines in a system’s existing production stack, represented by the gray, pink and orange wedges. Additions are a product of the number of new wells connected to the system and the production profile associated with each well.

Historically, oil and gas firms used base declines to understand the level of drilling and completions activity needed to hit production targets. This was possible because upstream operators had the well-level data required to build a production stack similar to what is shown in Figure 1. Building the base of existing production is hard because we must model every producing vintage back to the first well. Generally, midstreamers lack the resources to build the hundreds or thousands of type curves on a vintage, operator, interval and sub-play level.

RSEG is able to fill this gap by tagging individual wells to gathering systems using RS Core. This enables users to build production forecasts for midstream companies from the ground up with well-level type curves at any aggregation level. Metrics historically only viewed from an upstream lens, such as base declines and many others, can now be quantified and analyzed in a single workflow.

 

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