As the shale gale took off over the past few years, it generated a lot of excitement within the oil and gas industry and the denizens of Wall Street. One buzz word E&P executives used seemed to dominate their investor presentations, which touted ever-better well performance: the type curve.
Studies have shown that forecasting groups, the most common method for creating type wells, and a key technique used for forecasting unconventional wells’ performance, consistently leads to the overestimation of reserves. Some studies have shown these results to be off by as much as 25%. Other analysis work using hind casting studies shows those type wells are more likely to overstate EUR, and by an amount as high as 40%.