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PDP Decline Forecasts- It’s All Downhill from Here

Estimated future production from Proved Developed Producing (PDP) wells is a key component in developing oil and gas production forecasts, and is important in understanding macro supply dynamics, as well as more micro-level dynamics, for example at a well or operator level. Further, considering the tenuous oil environment we are in, PDP estimates also provide an understanding of the natural production decline in a region if new wells completely stop being turned on (shut-ins aside).

BTU View now features PDP decline forecasts, with the ability to dynamically visualize the data in different ways, from a regional to a well level. BTU’s proprietary PDP modeling is done at a well level and aggregated up accordingly, factoring in when historical state level production data is complete, which varies by state. Shale production is typified by steeper decline curves than conventional production. As a result, new wells need to be continually brought online to offset these declines. The view for the PDP decline estimate for Central Midland region in the Permian is shown below.

Using the data from the tool, additional insights can be made in the relative declines from key shale oil regions. The figure below compares the projected PDP declines for oil-driven sublocations in the Permian, Eagle Ford, Williston and DJ shale plays from a point in time where the state reported data is considered complete. First-year oil declines range from 30% to 40%, with largest percent declines in the DJ and Central Williston. From a production magnitude perspective, PDP production declines by about 500 Mb/d in the Central Midland and the Central Williston. Absent shut-ins and new activity, this gives an indication of how quickly production may fall in these sub locations.

Looking at the corresponding estimated gas PDP production from these regions, the first-year percent PDP declines are not as steep as the oil declines, as illustrated below. Central Midland first-year oil PDP declines by 34% while gas declines by about 20%.

To slice and dice PDP estimates in a multitude of ways and on the fly, request a trial of the PDP module in the BTU View platform.

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Marissa Anderson is the Manager of Data Analytics at BTU Analytics, LLC. She has diverse experience in the energy industry including fundamental analysis, investor relations and engineering. Prior to joining BTU Analytics, Marissa was a Senior Investor Relations Analyst with MarkWest Energy Partners, L.P., and a Senior Energy Analyst with Bentek Energy where she focused on the Natural Gas Liquids market. Marissa holds a B.S. in Chemical Engineering from the Colorado School of Mines, an M.S. in Global Energy Management from the University of Colorado Denver, and is a licensed professional engineer in the state of Colorado.

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