Wednesday, September 21, 2016

Utica Shale Selected Gas Production Decline Curves 2014 to 2016

Production decline curves in the Utica Shale are impacted by a number of variables. In the first place, there is a natural decline over time, gas and liquids are finite and production inevitably declines. Fracking  impermeable rock generates a flow path for trapped hydrocarbons and initial production can be quite large, though decline is inevitable as fractures and proppant no longer sustain flow and reservoir rock releases what it can. Unlike traditional wells where relatively porous and permeable rock is highly prized for it natural ability to permit hydrocarbons to enter the well bore and move to the surface, unconventional wells require coaxing via fracking. The fracking creates finite induced pathways for hydrocarbons to enter the wellbore and move up to the surface.

Choke valve adjustment
All wells use a choke valve which gives the operator control over how quickly hydrocarbons are allowed to escape out of the wellbore. Chokes valves are adjusted for a number of reasons and subject to experimentation and testing to optimize results. Reasons for choke adjustment could include: limiting choke in an attempt to maximize long term total production and flattening decline curves (experimental and based on learning and history), or maximizing or minimizing choke for other economic reasons. Maximizing choke might be done to make quick cash or take advantage what is viewed as temporary economically favorable condition, or a simple need for cash flow to keep a company afloat in this environment. Minimizing choke might be done to sustain wells to a time when prices will be more advantageous, for the same reason why wells are drilled but not completed. It all comes down to economics.

Decline samples and analysis - Monroe and Belmont county
Below is a chart of ten different wells and decline rates over time. In each case, each set of five wells (top 5 set and bottom 5 set) were the maximum gas producers in one of the quarterly production reports. While the lower five wells on the graph decline significantly, choke adjustment appears to have been made to smooth out what might have been a steeper decline, perhaps maximizing total production or attempting to flatten and sustain a level of cash flow for stability. In contrast, three out of five of the wells in the top part of the graph saw much higher and sustained initial production but then declined more sharply.

Selected Utica Shale Gas Production Decline Curves. Data comes from the ODNR quarterly production reports. During their early production months, each set of five wells (Top vs Bottom) were top five in production for a quarter. Not that the RICE-BELMONT-GOLD DIGGER 1H well is nearly on top of its nearby 3H counterpart, where production diverged very little and only visibly here near the end of the Q2 2016 where the white line emerges behind the overlap.

Additional factors impacted production decline rates
A variety of additional factors also impact decline rates, ranging from the type and grade of proppant used, number of fracking stages, type of fracking fluid, contact with the most productive zones, and more.