“We have deceived ourselves into thinking that since we have an infinite resource, we don’t need to worry,” Patzek said. “We are stumbling like blind people into a future which is not as pretty as we think.”
The Arps formula is only as good as the assumptions a company puts into it, Patzek said. Estimates can be inflated when Arps is based on limited drilling history for data or on a few high-performing wells to predict performance across a wide swath of acreage. Forecasts can also be skewed higher by assuming slower production declines than Arps observed.
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