October 31, 1975 - Gerald R. Ford Presidential Library and Museum

elating residuals versus shift factors to determine the statistical
best shift while the contractor used a trial and error converging
iteration to determine the unknown constant.
The hyperbolic decline program was tested against known test data
which ensured accuracy of the program. Calculations on portions of
actual data followed and the results were examined to ensure proper
execution of the program.
Reserves. Once a declining trend was established by the curve fit
routine, reserves to the economic limit were calculated by summing the
volumes under the curve.
Data Screens. Certain situations were encountered where decline curve
evaluation was rejected for analysis. These are listed below:
Situation Screen
1. No production reported in 1973 production greater than
most recent year. zero.
2. Production not declining. Three-year running average.
3. Less than 4 points to Three-year running average.
determine curve.
4. Confidence level of 95 Table of values for 95 percent
percent not met. confidence level.
5. Projected production declined Slope less than 0.02.
less than a 2 percent rate.
6. Calculated reserves greater Reserves 25 times greater than
than 25 times the latest 1973 production.
year's production.
Evaluation
The expertise gained from the decline curve analysis has revealed
certain shortcomings in applying a computer program to rapidly process
field data for determining reserves.
The production input data (number of producing wells and unimpeded
production rates) must be accurate or the results will be faulty.
Arbitrary abandonment rates based only on depth are not realistically
valid. The economic abandonment rate for each field at the same
depth can vary widely because of surface operating cost differences.
For example. in Pennsylvania some wells are still producing at averages
of less than 1/2 barrel per day while wells in the Alaskan Cook Inlet
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