Any financial advisor worth their salt will caution you that past performance is not a guarantee of the same in the future. And so it is with US shale oil. Recent EIA estimates claim potential production of up to 10 million barrels per day (BPD). That projection is pure fiction and in this article I will explain why. Right off the bat, assuming annual declines of 2.0 Million BPD, wells having a 365-day average annual rate of 400 BPD requiring 5,000 wells and utilizing 330 rigs (with each well drilling 15 years per annum) would be needed just to offset declines. Should annual declines exceed 20% per new and vintage production, the number of rigs goes up proportionally. Productivity of shale basins (a misnomer as the dominant facies consist of mixtures of sandstone, dolomite, limestone, siltstone, and clays) is determined by a number factors. The first is the degree […]