buc a couple of points;
Forward production estimate uses a type curve with a 700 BOPD IP. So the production estimates used by the company are depending on each and every well having an IP of 700. I know some of the IP's achieved so far have been pretty impressive but to sustain the 700 mark all the way through to June next year ?? Even tougher if they don't have 100% of the production !!
In recent weeks, the market has shifted its attention from cratering crude prices to the falling number of rigs operating in American oilfields. But in the coming months, the very life cycle of many of those wells may have many market watchers concerned about output and price stability, experts told CNBC.
Oil wells—whether conventional or unconventional—reach peak production soon after they yield the first drop of crude. The difference is how quickly they enter decline.
Conventional wells go through a long period of steady, flat production between peak and decline. In contrast, production falls rapidly in the first three years of unconventional wells—
those in shale, sandstone and carbonates. They then enter a long phase of very low production.
In order to even keep production
steady across an unconventional oilfield,
producers must constantly drill new, high-producing wells. Now they're cutting back on exploration, and many investors and energy companies do not fully appreciate how many new wells producers will have to drill in order to get production back to where they were
, said Michael Rowe, vice president of exploration and production research at Tudor Pickering Holt.
http://www.cnbc.com/id/102419892#.
