SPE 134231

A Better Way To Forecast Production From Unconventional Gas Wells

Peter P. Valk and W. John Lee, SPE, Texas A&M University

Copyright 2010, Society of Petroleum Engineers

This paper was prepared for presentation at the SPE Annual Technical Conference and Exhibition held in Florence, Italy, 1922 September 2010.
This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not been reviewed
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Abstract
This work combines two ideasthe stretched exponential decline curve model and the novel paradigm of data-intensive
discoveryto provide a controlled production forecast for any individual tight gas/shale gas well on the basis of data gathered
through parameter processing for a large group of wells.. Group production for a large number of wells follows stretched
exponential decline behavior of production rates, which we model using the corresponding decline curve model. Compared to the
Arps model, the new approach offers numerous advantages; the two most significant ones are the bounded nature of estimated
ultimate recovery (EUR) without limits on time or rate, and the straight-line behavior of a recovery potential expression that we
introduce. This approach moves production forecasts in tight and unconventional gas fields from individual and subjective curve
matching to a new methodology we call group-data controlled forecast. In terms of the novel stretched exponential decline curve
model, the combined process offers statistically more consistent reserve estimates and also provides a potential well monitoring
tool.
Introduction
In 1923 Arnold, one of the first scientists to apply decline curve analysis wrote: Twenty years ago the estimate of oil reserves was
computed generally by calculating the contents of the supposed reservoir rock from data regarding thickness, extent, etc., guessing
at the saturation and percentage of recoverable oil, and finally arriving at a very rough approximation of the desired information.
Now, thanks to the great mass of data available and to the perfection of methods of computation, we get more accurate results. If
we know the production of a given well over a reasonable period (even a period of days in some instances), we can calculate with
remarkable accuracy the future production of the well by years and in totality, and thus arrive at the recoverable reserve for this
well and its surrounding area.
Arps (1945) seminal work shows that early research focused on three major issues: conditions necessary for past production to
be a predictor for future performance, appropriate mathematical models to describe observed trends, and available methods to
identify model parameters. In the following decades, additional questions appeared: how to incorporate reservoir engineering
concepts, such as pseudosteady state, material balance, etc., to constrain the model parameters to a physically reasonable range
(Fetkovich, 1980) and whether total lease or field analysis would give results different from individual well analysis (Shea et al.,
1964).
In the 80s it was inevitable to apply hyperbolic decline to tight gas wells, and it soon turned out that the data are less amenable
to straightforward application of the hyperbolic model (see, for example, Maley, 1985).Unconventional gas applications even
amplified the problem, as reported frequently in the literature (Spivey et al., 2001; Rushing et al., 2007; Cheng et al., 2008; Ilk,
2008.)
To some extent the various resolution attempts have come full circle: restriction of the parameter space, adjustment of the
fitting criteria, modification of the parameter search procedure, combination with mechanistic (physics-based) reservoir modeling,
all of which already had some roots in the pre-1945 literature (Lewis and Beal, 1918; Cutler, 1924; Larkey, 1925; Johnson and
Bollens,1927.)
This work combines two ideas: the stretched exponential decline curve model and the novel paradigm of data-intensive
discovery, both of which are relatively new in the given context, and certainly this is the first attempt to apply them

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simultaneously. The approach appears to have definite advantages over Arps-type decline curve analysis, at least for
unconventional gas applications.

Stretched Exponential Decline

If we bear in mind that hyperbolic decline was introduced by Cutler 1924 because exponential decline gave too conservative
estimates in the final stage, then it is natural to consider it as a practical generalization of the exponential function. Such a specific
generalization is, however, rather unique to the petroleum industry. In physics, many processes manifest stretched exponential
behavior, as first described by Kohlrausch in 1847, and then by a great number of authors (Philips, 1966). The approach found
followers even in the geophysical literature (Laherrre and Sornette, 1998).
A natural interpretation of the stretched exponential decay of a quantity is that it is generated by a sum (integral) of pure
exponential decays with a fat tailed probability distribution of the time constants (Johnston, 2006.) Therefore, we can interpret
the stretched exponential production decline (SEPD) model (Table 1) as the acknowledgement of the heterogeneity: the actual
production decline is determined by a great number of contributing volumes individually in exponential decay (i.e., in some kind
of pseudosteady state), but with a specific distribution of characteristic time constants. The family of the background distribution
of characteristic time constants is known analytically, and has been visualized by Johnston (2006). The distribution is determined
by a parameter pair, (n, ). Broadly speaking, the parameter is the median of the characteristic time constants. The nearer the
parameter n is to zero, the larger is the tail of the distribution; that is, more elementary volumes have very large time constants.
TABLE 1THE STRETCHED EXPONENTIAL PRODUCTION DECLINE MODEL

Defining differential equation of the model

exp

Rate expression as function of time

1
1

EUR
1

EUR

1
1

Cumulative production as a function of time

EUR in terms of the model parameters

ln

Recovery potential calculated from actual rate using two model parameters

One of the results of using the hyperbolic decline approach in analytical models and reservoir simulators is that the boundarydominated flow regime is necessary for meaningful extrapolation. Since the traditional boundary-dominated state is very
questionable in tight and especially shale gas, little use can be made of the consensus developed by Fetkovich and others in the
80s. The stochastic interpretation, however, provides the advantage. that the distribution of time constants is an intrinsic property
of a continuous unconventional gas reservoir, and hence it determines the totality of the production decline curve. In other words,
we can extrapolate from early data, at least in some sense, and exactly that has been done in early attempts to apply SEPD (Valk,
2009; Ilk et al., 2008; Mattar and Moghadam, 2009.)
Some Properties of the SEPD Model
As in the case of the formal treatment of hyperbolic and exponential decline by Arps, the SEPD model can be also derived from a
defining differential equation with two parameters: in this case n and , while the third parameter, q0, appears as an initial
condition of the defining ordinary differential equation?
Besides the more familiar gamma function, the new model incorporates the incomplete gamma function (Abramowitz and Stegun,
0972). The recovery potential expression is derived by substituting the q and Q expressions into the EUR definition.
Compared to the Arps formalization, the new approach offers numerous advantages; among them the two most significant ones
are the bounded nature of EUR from any individual well and the straight-line behavior of the recovery potential (rp) expression
versus the cumulative production.
For positive n, and q0, the model gives a finite value of the EUR, even if no cutoff is used in time or in rate. (Unfortunately,
the Arps family of curves leads to an unbounded and physically impossible estimate of EUR for b 1.) Once the n and q0

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parameters are determined, a straight line plot of recovery potential vs cumulative production can be constructed from rates, and
the EUR can be read as the x-intercept. (For the Arps model family, the concept of recovery potential cannot even be defined for b
1.)
Of course these favorable properties do not necessarily mean that the SEPD will give more accurate forecast than some other
method. In fact, Arps hyperbolic model and the SEPD may give comparable results depending on the way the data is preprocessed and the parameters are determined. The favorable mathematical properties, however, make the SEPD model more
applicable when a large amount of data is processed without subjective deletion, interaction, or data modification, and these
requirements are essential in data-intensive discovery.
Data-intensive discovery
According to some convincing arguments, science is experiencing a transition to its fourth, data-intensive, era after previous
ones characterized as experimental, theoretical, and computational (Fourth Paradigm, 2009). We argue that decline curve analysis
is entering this phase, too. The most important consequence is that any suggested idea, method, or algorithm should pass testing
by independent individuals who have access to the same huge open dataset(s).
The desire of capturing the individuality of any well will certainly remain with us. However, the probabilistic criterion for
proved (P90) reserves does not require a good fit; it rather requires some kind of proof that a given estimate is met or surpassed
by (future) reality in at least 90 % of the cases. Strictly speaking, such proof can be provided only if sufficient wells have been
abandoned, which is obviously not the case for unconventional resourcesand it never will be. Industry will always be interested
in the performance of the newest technology in the newest plays. We do not have the luxury of long-duration data sets, and even
the shorter ones are affected by the accelerated evolution of completion technology.
On the positive side, in normal operations an enormous quantity of data is created, preserved, and made public, ready for
analysis. In some sense this provides a fundamentally new opportunity to run algorithms on huge samples and evaluate statistics
in other words, to make data-intensive discovery. For instance, operators are forced to reopen the question whether an individual
wells production decline up to a certain point in time determines the decline characteristics in the future, and the mere existence of
the large databases requires some kind of proof of any hypotheses made in this respect.
Our primary interest is the novel horizontal wells in the Barnett shale, completed with multiple intersecting fractures. This
technology gained acceptance in about 2004 and has become almost exclusive since then. Therefore, our time horizon is very
limited. In the following we use the Barnett shale production database to illustrate our approach.
Development of the Methodology on the Example of Barnett Shale
In the following analysis we incorporated production data of 14,687 wells in the Barnett shale. As an illustration, we show the
wells starting production in July 2004 and July 2006. Actual data should not be called production rate, but rather incremental
production during the last month (Q). All gas volumes are expressed in Mscf throughout this paper.

Fig. 1Monthly production increment (in MSCF) of all wells starting production
in July 2004 (left) and July 2006 (right) leads to a chaotic distribution.

The individual well behavior seems rather chaotic. This is mostly because of the many means to intervene and improve
productivity of weak wells. By taking the July groups of wells and calculating mean values for each month into month-groups, a
clearer picture emerges (Fig 2).

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Fig. 2Average monthly production increment (in Mscf) of the selected three month-groups yields clearer trends.

Fig. 2 shows the mean (per well) monthly production increment of all wells starting production in July 2004, 05, and 06. As we
see, the monthly mean is affected by the peak (occurring in the second or third month), by the time elapsed from start, and also by
additional effects related to the absolute time (seasonal demand, gas price, etc.) This latter phenomenon can be depicted from dips
appearing on all three curves at the same absolute time.
The explanation for the low first month value is that on average, the first month has only 15 producing days (assuming evenly
distributed actual starting dates).
These three groups are only examples of the 230 month-groups for vertical wells and 80 month-groups for horizontal wells that
have at least 3 years of production history. Our selection of the 3-year criterion is not incidental; in some sense it is a compromise:
should we select a longer time horizon, we would be forced to exclude exactly those wells we are really interested in. Should we
select an even shorter time horizon, the noise-to-signal ratio (due to season, demand, price etc.) would increase.
For each month-group we calculate the first-, second-, and third-year production. The results are show in Fig. 3. Since each
month-group is represented by a hypothetical average well (three of them shown in Fig. 2), we anticipate some consistency.
As often happens with huge amounts of data, we still find great variability, obvious in Fig. 3.

Fig. 3The x axis shows the index of the month-group. The y axis shows 1-, 2-, and 3-year cumulatives for the average well in the
month-group for vertical wells (left) and horizontal wells (right). Great variability is evident.

One of the problems associated with working with averages is that the number of active wells is not necessarily constant for a
month-group in the first 3 years. Nevertheless, we can considerably reduce the variability by constructing ratios of year-end
cumulatives, and hence focus on relative decline instead of absolute level of production.

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Fig. 4The ratio of 2/1 and 3/1-year cumulatives for the various month-groups show a more consistent behavior.

While Fig. 4 shows some promising consistency, it raises some questions, too. How is it possible that for some month-groups the
third year cumulative is more than 3 times the first-year cumulative? Obviously, those wells were not declining, not only
individually, but even as a group.
Nevertheless, both the vertical and the horizontal curves smooth out considerably (i.e., become essentially horizontal) for the
newer wells. The stabilization reflects two facts: the huge number of wells in these month-groups and the maturation of the
fracturing technology.
Cumulative ratios are the integral counterparts of Johnsons (1927) rate decline ratios and we favor them because they are more
stable.
Since the 2/1 and 3/1 cumulative ratios behave relatively stably, we can calculate the weighted mean of the ratios, where each
month group value is weighted by the number of wells in the group. The results are shown in Table 2.
TABLE 2WEIGHED MEANS OF CUMULATIVE RATIOS

All (6,348 of 13,482)

Vertical (3,542 of 3,724)
Horizontal (2,806 of 9,758)

2/1 year cumulative ratio, r21

1.563
1.570
1.549

3/1 year cumulative ratio, r31

1.985
2.005
1.954

Now we solve two nonlinear equations to obtain the model parameters n and :
,
,
,
,

.
.

(1a)

.
.

(1b)

The corresponding two equations for the Arps model are well-known, and we here show only the resulting b and Di parameters.
TABLE 3MODEL PARAMETERS FROM DATA IN TABLE 2
SEPD
Arps
n
b
Di 1/month
, month
All
0.231
0.585
1.69
0.251
Vertical
0.203
0.246
1.82
0.292
Horizontal
0.247
0.776
1.58
0.240

The industry has known for many years that comparable approaches result in b > 1 for tight gas wells (Maley, 1985), though to our
knowledge this is the first time that such a large data set has been used to provide evidence.

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Comparison of the Two Decline Models

For comparison purposes we show what happens if - , 1-, or 3-year production data are available from a horizontal well. The
multiplier is the number by which we multiply the available cumulative production to extrapolate to a final month, shown on the xaxis.

Fig. 5Multipliers to extrapolate the cumulative production to a given final month: red for SEPD and blue for Arps with parameters
shown in Table 3 for horizontal wells. Extrapolation based on - (circle), 1- (upper triangle), or 3- year (lower triangle) cutoff time.

All curves start from one. The red curves (SEPD) ultimately level off while the blue curves (Arps) grow beyond any limit. The
red and blue curves will very likely describe equally well all the available data; moreover, they will give nearly the same
prediction for the following 4 to 5 years. Therefore, a simple quality of fit argument cannot differentiate between them.
For individual wells, even the 600-month prediction can turn out better, based on the blue curve, than the one based on the
red curve. The problem is that the fundamentally unlimited behavior of the Arps model with b > 1 acts as a potential time bomb.
There is no reason other than tradition to stick with such a potentially dangerous model.
In the following we will work only with the SEPD model, on the basis that this choice is dictated by its realistic mathematical
properties.
SEPD Master Curves for Horizontal and Vertical Wells in the Barnett Shale
Fig 6 shows the two master curves (red for horizontal and blue for vertical) calculated from the definition
/

(2)

Fig. 6The master curves are constructed from that part of the SEPD model that does not include the q0 parameter. The slight difference
in shape stems from the difference in the model parameters n and. Units of both Qm and Qm are months.

The actual construction is as follows: First the Qm,i values are calculated at t = i - 0.5, i = 1,2,... Then the difference series is
constructed:

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Finally, the (

with

), i = 1,2, points are connected and plotted as a curve.

There is no significance to the actual value (level) of this curve; only its shape matters. Note, however, that the units of both Qm
and Qm are months.
Once a data set is available, we use the number of producing months (i) and the cumulative production Q to nail down the q0
parameter for the well (or group of wells:)

(3)

This simple fitting procedure determines the one free parameterq0 by satisfying the constraint that the cumulative
production calculated from the number of months should be equal to the observed cumulative production. In the whole procedure
we did not use any rate value, because rate is not measured and is certainly not reported to state regulatory agencies. Only
increments of cumulative production are used; i.e., the raw reported data.
From Fig. 6 it seems that the horizontal wells produce a greater fraction of their cumulative production in the earlier periods.
This is somewhat anticipated, because the purpose of the multiple fractured horizontal well is to shift production to earlier periods;
this, in turn, shifts the underlying distribution of characteristic times toward lower values. Nevertheless, the formation
characteristics dominate the underlying distribution and hence most of the difference between horizontal and vertical wells will
show up not in the n and parameters but in the q0 parameter.
Some Examples of the Results So Far
As a first example we consider our three July groups of Fig. 2. Shown on Fig. 7 are the production declines for a hypothetical
average well in the three July groups (2004 red, 2005 blue, 2006 green).

Fig. 7Fitted decline curves for the average wells in each July groups of 2004, 05 and 06.

For each group we determine the q0 from the last cumulative production using Eq. 3, and from that we obtain the solid lines. There
is no other fitting. The actual monthly increments are surprisingly well described, even in the early part of the production.
A similar representation is shown on Fig. 8 for all the horizontal well month-groups between January 2004 and December
2006, but each series is normalized by its own q0. The normalized series for horizontal wells (left) and should align along the red
master curve of Fig. 6, the vertical wells (right), along the blue master curve.

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Fig. 8The normalized month-group series aligns around the master curves for horizontal and vertical well groups. (Colored by starting
month.)

The data seem to follow the initial sharp decline and then the subtle hump at intermediate times characteristic of the SEDP
model with the horizontal well parameters provided in Table 3. One interesting feature of Fig. 8 is that there are no individual
point series (points with the same color) remaining on one side of the red master curve. Rather the individual series criss-cross the
master curve several times.
A similar treatment shows the vertical month-groups and their master curve on Fig. 9. Interestingly, the data though
admittedly with much more scatter follows the vertical master curve on the right side of Fig. 9 in the sense that there is no
evidence of the hump found with the horizontal wells.
So far we showed only point series, each averaged from several dozen wells starting in the same month. We have provided
some evidence that the month-groups follow the common trend depicted from the cumulative ratios for the two wellbore
orientations. It still remains to see whether individual wells follow the group trend.
Making a similar normalized plot with individual well data would be impractical, because we would need to place an enormous
number of points on one plot. For instance, currently there are 9,208 active horizontal wells, and that adds up to 278,652 monthly
production increment/ cumulative production pairs. Nevertheless, on Fig. 9 we attempt to visualize the data (horizontal wells to the
left, vertical to the right) for wells drilled during this millenium. We normalize each individual well series by its own q0 calculated
from the last cumulative production. Then we define bins of width 0.1 Qm unit (which is 0.2 months) on the x-axis and show
only the center of gravity of the points in the bin, together with limits of one standard deviation.

Fig. 9Data from all horizontal (left) and vertical (right) wells new this millennium normalized and averaged over 0.1 unit bins generally
follow the pattern presented.

Problem With Restimulated Wells

Old vertical wells represent a problematic group, as clearly seen from Fig. 10.

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Fig. 10(Left) Data from all inactive vertical wells of the last millennium (old) normalized and averaged over 0.1 unit bins; right,
data from all active vertical old wells (last millennium) normalized and averaged over 0.1 unit bins. Data at left (inactive vertical wells)
show a single decline trend. Data at right (active vertical wells) show two decline periods, the first one before restimulation, the second
one after restimulation.

Fig. 11Data from the 10 individual wells started in July 1990. The re-stimulation around 2001 multiplied the EURs. Solid and dashed
lines show current forecast by two methods.

Fig. 11 illustrates the dilemma for old wells, using the 1990 July group as an example. These 10 wells were restimulated around
2001, using slick-water fracturing technology. To forecast production from these wells, we can use the current cumulative
production, but it is not clear whether we should assign it to the total number of producing months or to the number of months
after 2001. The two ways give rise to two different extrapolation options: the dashed line was obtained using the total number of
months; the solid line was obtained using only the number of months after 2001, effectively banking the production up to 2000 and
adding a new hypothetical well for the incremental production starting in Jan 2001.
Repeating the procedure for all old active wells, we obtain EURinf (EUR without any restriction on time or rate) with the total
number of months (first method) and EURinf2 with the months only after 2001 (second method).

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Fig. 12Comparison of EUR (in MSCF) obtained by two different methods for active old vertical wells, basically all of which were restimulated around 2001.

From Fig. 12 we conclude that the two EUR values correlate relatively well and hence either way of calculating EUR is tolerable.
This is especially useful because old wells will eventually lose more and more producing months, an effect very difficult to capture
in a probabilistic way. As seen from Fig. 13, the actual number of producing months for old, inactive wells (blue) is less than the
calendar dates would suggest. This is quite natural. Active old wells (red) lose more and more producing months during their long
careers, too.

Fig. 13The number of actual production months departs from the potential maximum because of downtime or abandonment of active
(red) and already inactive (blue) wells.

Group-Data Controlled Forecast

How can we provide some evidence that the group-data controlled forecast represented by the two master curves lead to
reasonable EURs? This seems to be an impossible task, because there is no control group for 40 or 50 years of production. In this
section we provide a proxy for forecasting the future. We pretend we are at a certain point in time, (, 1, 2, 3, 4, 5 years after first
production), and forecast the future up to present day. Then we compare the prediction to what actually happened.
As an example we select 4 horizontal wells from each July group. First we locate the median well (by cumulative at present
day) and then we pick the 2nd and 6th well above and below. The reader might suspect that in spite of our declared objective way
of selecting wells, we try to present some favorable examples. However, this time our goal is somewhat different and the examples
are actually not so favorable at all. By showing just a couple of the figures, we argue that the actual production histories of the
wells are extremely hectic and that gleaning some kind of sophisticated individual decline behavior from a limited individual past
would be a mistake.

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Fig. 14EUR for four sample wells calculated from 5.5 years of production data (right) and from a half year of data (left).

Nevertheless, the procedure based on the master decline provides increasingly consistent EUR estimates, by allowing
individuality only in the q0 parameter that is solely determined by the latest cumulative (and the number of producing months).
This is obviously because that the (n, ) pair is controlled by the totality of horizontal well declines.
Table 4 shows the evolution of the calculated EURinf (in Mscf) for 4 wells from the July groups of 2004, 05 and 06.
TABLE 4CALCULATED EUR PER WELL, Mscf 106
July 2004
Cutoff (year)
1/2
1
2
3
4
5

3063
2.05
2.04
1.94
1.88
1.82
1.80

Well Number
255
5850
2.18
1.81
2.24
1.95
1.94
2.34
1.96
2.33
2.00
2.31
2.04
2.32

12222
0.97
1.53
2.14
2.47
2.71
2.84

July 2005
Cutoff (year)

13

Well Number
3077
5561

11650

1/2
1
2
3
4
5

1.86
2.00
1.72
1.74
1.73
1.70

July 2006
Cutoff (year)
1/2
1
2
3
4

1670
3.18
2.80
2.17
1.87
1.86

2.91
2.52
2.13
2.01
1.93
1.88

2.08
2.12
2.05
2.11
2.15
2.17

2.05
2.25
2.36
2.45
2.49
2.52

Well Number
14226
2795
2.49
1.92
2.47
1.92
2.20
1.99
2.09
2.01
2.07
2.02

502
2.01
2.16
2.19
2.11
2.20

We can conclude that the master curve approach sacrifices individual goodness of fit for overall consistency. The point is that
esthetics of individually picked examples does not substitute for statistical investigation. How well one can achieve a satisfying
goodness of fit with a given combination of a model and parameter identification methodology does not say much at all about
the forecasting power in the statistical sense. We will return to this issue in the section P90 Methodology.
At this point we focus on the consequences of the time evolution of the q0 parameter.
Monitoring With Recovery Potential Plot
; 0 for each well. This is the
During our time travel, at any point in time we can plot a straight line going from (0;1) to
theoretical line the rp values should follow if the model were exact. The rp expression can be also calculated from q/q0 and plotted

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on the same graph. For instance, for Well 14155 of the July 2004 group, Fig. 15 shows the recovery potential plot after a half
year (at the time only the solid points and the straight line can be seen; the empty circles are unknown) and after 5 years. Strictly
speaking, both the straight line and the position of the points are changing from half to 5.5 years because q0 is updated.

Fig. 15Recovery potential plot after half year cutoff (left) and 5 years cutoff (right). only the solid points and the straight line are
available at any given time. Production over time updates the n and parameters, changing the slope and the x-axis intercept of the
curve.

In case of Well 14155, the straight line already established itself in the first half year and afterwards
changed relatively little. The operator can draw various conclusions regarding the periods when the points are above and when
they are bellow the line. In this case these conclusions can be drawn on the go, not only in hindsight. This is made possible by the
relative stability of q0. We suggest that the recovery potential plot is a useful monitoring tool at hand, though admittedly this
hand-picked example was a favorable one.
Another example (Well 9076 of the same July group), Fig. 16, reveals that between half and 2 years the operator was able to
improve the well (i.e., q0 and hence EUR increased). The actions taken in the 5th year did not lead to substantial increase of EUR,
but rather a temporary acceleration of recovery. As seen from Fig. 16, the future points smoothly land onto the straight line.
We have observed many such examples for the more prolific wells.

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Fig. 16Recovery potential plot after a half year (top left), 2 years (top right), and 5.5 years (bottom), Only the solid points and the straight
line are available at any given time.

In the case of extremely weak wells, the straight line position changes significantly with increasing cutoff time, and meaningful
conclusions about the EUR are more difficult to draw. This happens because these wells are still in an adolescent stage where
the operator tries to improve the operating conditions (such as by liquid cleanup.) Desperate measures sometimes work, as is
illustrated by Fig. 14, where the initially worst well, well 12222, became the best well, but by Year 5 well 12222 had joined the
regular decline mode trend.

P90 Methodology
One of the most challenging tasks related to forecasting is to provide a P90 estimate of EUR, the focal point of new SEC reporting
rules (Lee, 2009). In the previous section we developed a framework and now we apply it to arrive at some quantitative statements.
As we continue our time travel we design the following numerical experiment. For each well we take 6, 12, 18, etc. months
cutoff time and record the forecast value for the present day cumulative production. Since we have 13,482 wells and some of them
have several hundred months history, we get quite a large number of predicted values, in fact 103,542 individual predictions for
the 13,482 present day values. Some of the predictions are larger and some of them are smaller than the actual end value. We are
interested in the empirical cumulative distribution of the predicted (as a percentage of the actual) value.
Fig. 17 visualizes the empirical probability distribution resulting from the 103,542 predictions.

Fig. 17 Histogram of predictions as percentage of actual values.

The median seems to be about 100% and the median deviation is about 7%. This is promising, but the experimental cumulative
distribution shown in Fig. 18 reveals that in 50% of the cases, our prediction was optimistic. That is not surprising (actually it
shows that in some sense we arrived at an unbiased way of estimating) but it is not what is required by P90.

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The requirement of P90 demands a procedure for which 90% of the predictions are conservative. Therefore, we have to apply a
safety factor less than 1 that will bias our estimates toward the conservative side. With a little experimenting we arrive at safety
factor 0.8.

Fig. 18 Empirical cumulative distribution of predictions (left) and with 0.8 safety factor (right), which shifts the distribution far enough to
the left to make 90% of the predictions conservative.

Multiplying all our predictions by 0.8 shifts the new empirical cumulative distribution to the left so that 90% of the predictions
become conservative. Logically, the same safety factor can be applied to EURs obtained from the same master curves by the
same procedure (whatever additional actual time and/or rate limitation is incorporated.)
In Table 6 we report our reserves estimates for the Barnett shale, using the safety factor 0.8 and the SEPD parameters for
horizontal and vertical wells presented in Table 3. Now we have some quantitative justification to call the results P90 estimates,
and repeating the construction of the empirical cumulative distribution periodically, say in every 6 months in the future, we can
continuously monitor the validity of the hypothesis that our overall methodology still satisfies the P90 criteria.
6

TABLE 5PRODUCTION FROM INACTIVE WELLS, Mscf 10

Gas Already
6
Number of Wells
Produced, Mscf 10
Vertical
366
245
Horizontal/deviated
540
399
All
906
644

TABLE 6RESERVES ESTIMATES, ACTIVE WELLS, Mscf 109

Number of wells Already produced P90 EURinf* P90 future production
Vertical
3358
2.06
6.19
4.13
Horizontal/deviated
9218
5.26
20.1
14.8
All
12576
7.33
26.3
18.9

*without time or rate limit

Of course reality may play a trick on us. It is possible, for instance, that a new restimulation technology will emerge, with
effects as dramatic as in 2001. Therefore, our claim is not so much that we can predict the future (nobody can) but that the
procedure provides a reliable and consistent evaluation methodology.
The Barnett shale example is unique in many ways. It includes a great number of wells, the technology spreads extremely fast
(in the last 5 years vertical wells have given way to horizontal wells almost completely), and the decline trends seem to be quite
consistentat least within a completion type, most importantly for horizontal wells intersected by several propped fractures with

SPE 134231

15

the overall amount of sand reaching millions of pounds. Therefore we do not claim that repeating the analysis in another play will
lead to similar consistency. Nevertheless, with some variations, the main concepts will be applicable.
Conclusions
Two important points can be made from these investigations. First, a model family with good mathematical properties is better
than a model family with less favorable mathematical properties, even if both can satisfactorily describe a couple of hand-picked
data sets. In this respect we think that the SEPD model has definite advantages over the Arps family of decline curves, at least for
unconventional gas applications. Second, there are many ways to obtain model parameters, but in the era of increasing amounts of
open and accessible data, we should try to process the data collectively rather than individually, especially if some theoretical
consideration supports the existence of common trends in the data. While new aspiring models and fitting techniques will certainly
be offered again and again in the future, we place more hope in the transition to data-driven discovery, where the data amount (and
the open access to it) provide some transparent assurance of the repeatability of the results.
Acknowledgement
The authors are grateful to HPDI, LLC for providing access to their production data database. Contributions from our students,
Bunyamin Can and Beau Clark, are appreciated.

Nomenclature
b = Arps' decline exponent, dimensionless
Di = Arps' decline constant, 1/month
EUR = estimated ultimate recovery, Mscf
EURinf = estimated ultimate recovery without imposing time or rate limit, Mscf
n = exponent parameter for SEPD model, dimensionless
q = production, Mscf
q0 = production parameter common in Arps model and in SEPD, Mscf/month
Q = cumulative production, Mscf
Qm = normalized cumulative production, Q/q0, months
, = normalized cumulative production for given number of months i, Q/q0, month??
rp = recovery potential, dimensionless
t = production time, months
Q = cumulative production increment, Mscf
= characteristic time parameter for SEPD model, month

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