In conventional wells, whether in the Middle East, the Gulf of Mexico, or
the North Sea, the wells operate on extremely long cycles. Typically, the
amount of crude oil they produce declines at between 2% and 5% per year.
Hence, a well that generates 2,000 barrels a day in the first year will
yield between 95% and 98% of that quantity in year two. Since the output
falls so gradually, wells typically keep pumping for 20 years or longer.
Except for fracking. Unlike conventional projects, shale wells enjoy an
extremely short life. In the Bakken region straddling Montana and North
Dakota, a well that starts out pumping 1,000 barrels a day will decline to
just 280 barrels by the start of year two, a shrinkage of 72%. By the
beginning of year three, more than half the reserves of that well will be
depleted, and annual production will fall to a trickle.
