My Nebraska well has produced for 31 years and is still producing 300- 500 barrels per month, about average for wells in the area. But today, very few new conventional wells are drilled. Unconventional wells – which include tight-sand oil and oil-rich shale – that use horizontal drilling and fracking have replaced conventional wells. These wells reduce exploration risk… but at a cost. Unconventional-well decline rates are very high: 85%-90% in the first three years alone… Rocks in these fields are tight and under high pressure. After the fracking process blasts the rocks, the natural pressure pushes the oil out very quickly. But as the oil flows out and the free oil close to the wellbore is produced, the pressure declines. And production rates go down fast.
This means that to maintain overall production rates, companies must drill additional wells quickly.
And when drilling slows or stops, production rates decline very rapidly. We’re starting to see that decline already in shales like the Eagle Ford and the Bakken.
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