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The purpose of the model is to show possible scenarios of Bakken and Permian oil production until 2028.
The model is based on 3 time series: monthly IP30 averages of all the wells having IP30 in a particular month, the underlying number of these wells and monthly well production decline data, expressed in % of IP30, associated with these wells. The model runs over a period of 180 months, or 15 years, starting in 2014 and ending in 2028.
The model has been back tested with the effective monthly Bakken and Permian production data since 2014. The model results reproduce quite exactly the production data of the underlying databases. Official annual oil production averages (expressed in bopd) of the basins are matched by the model within 2% in 2017 and 2018 after running over periods of 4 to 5 years.
So, we “only” need to predict future monthly IP30 values, the monthly number of corresponding wells and the shape of the decline curves. Short term, the results are most accurate if monthly input variations are taken into account, but for long term projection over a period of several years, monthly inputs based on quarterly or even annual averages provide very good approximations.
The decline curves are based on a large number of wells. They are quite stable. In the Bakken case, a slow steepening over the years can be observed. These changes are codified in different decline curves or profiles, expressed in monthly % of IP30, assigned to the wells at their IP30 month.
For the 2014 wells, 5 years of empirical data are available (see the chapters about Ip30 and production declines for Bakken and Permian wells). The values of the curve after month 60 are derived from theoretical considerations, assuming decreasing YoY decline rates. For the 2014 Bakken wells for example, the corresponding decline curve shows production of 7.2 % of IP30 in month 60 and 2.6% in month 180.
For the decline curves, statistical average pre-peak production is also taken into account. For example for the Bakken, It starts with 1.8% of IP30 in month -7 (seven months before IP30) and increases to 43% of IP30 in the month preceding the IP30 month. The 5 year average total pre-IP30 month production, expressed as % of IP30, is 83% for the Bakken and 78% for the Permian.
On that basis, the production of a group of wells having IP30 in a specific month is calculated for each of the following month until 2028. This calculation is performed for all the wells with IP30 between 2014 and 2028. The values in the resulting matrix of 180×180 cells are then aggregated to determine total basin production for a specific month.
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