Single well production forecast

Table 1 illustrates a simple spreadsheet model for a single-well production forecast. The model has one
main assumption, which is that the production is represented using exponential decline for the oil [q = q ieat,
and q(n +1) = qnea], where qi is the annual production of the first year, and a is the annual percentage decline
rate. While this model used exponential decline, similar models can be built for linear, harmonic, or
hyperbolic declines.

Table 1Production Forecast, Single Well

Choice of input distributions

In this simple single-well production forecast, there are only two input distributions required:

production start rate

decline rate

The production in time period one (year one) is estimated from Darcys Law, a product model with factors
of permeability, pay (1/viscosity), and so on. Because this is a product, one would expect that the
distribution is approximately log-normal. In fact, experience has shown that there is a great deal of
uncertainty and variability in production start rates. Thus, not only initial production rate, but also the
production in each subsequent time period, is right-skewed.
Decline rate, on the other hand, does not typically have a wide variability in a given reservoir environment.
If the production is to be maintained for 10 years, it will be impossible to have a very high decline rate. If the
decline rate is too low, we will be simulating an unrealistic recovery of reserves over the forecast period.
These constraints, whether practical or logical, lead us to conclude that decline rate is best suited to be
represented with a normal distribution.