Estimated ultimate recovery (EUR) and well economics are two subjects of high interest for unconventional wells, especially during the downturn of the market when the profitability of unconventional oil/gas becomes marginal. In this work, the authors investigated a few models that are commercially available for EUR assessment and developed a mathematical model for evaluating shale oil economics.

EUR is typically assessed by a Decline Curve Analysis (DCA). The authors applied different models (including Arps’ and multi-segment) to estimate EURs. The influence of the length of production data on EUR is also analyzed. A comprehensive approach was taken to analyze all major costs that occur in every phase from leasing to well abandonment. Eventually, a mathematical model is established which enables the estimation of well economics by use of publicly available data, e.g., production data, well total depth, and stimulation treatment.

By applying the estimated EURs in the newly developed model, the authors analyzed the economics of more than 3900 shale oil wells in Eagle Ford and Bakken. Results show that the mean breakeven oil prices in Eagle Ford and Bakken are, respectively, $69/bbl and $63/bbl. At an oil price of $50/bbl, more than 60% of the wells in those two shale plays are not profitable.

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