Shale wells suffer from steep decline rates. A rush of output occurs at first, but almost immediately after the well comes online, the flow rate drops off precipitously. And within just a few months the well is a shadow of its former self. That is typical. But putting a bunch of wells close to each other can induce even steeper decline rates than normal because they can rob pressure from each other. If that occurs, the wells can suffer irreparable damage, and ultimately, the volume of oil and gas that can eventually be recovered could potentially be permanently diminished. Such a scenario appears to be playing out in the U.S. shale patch, with the white-hot Permian, in particular, falling victim to what is a byproduct of such a massive boom in activity. Bloomberg reports that the decline rate from “legacy” wells – those already online – is accelerating rapidly, […]