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Turkey
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Re: Just a sample of the BS pumpers use......other silly things they use is taking an instantaneous (one day average) flow rate to the flare stack and assuming that will be the rate flowed down a pressurised sales gas line and will remain flat line for a year?
A 4mmcf/day first day or two average flow to flare stack and atmospheric pressure may very well be around 1mmcf/day against sales line pressure. Then that flow rate will decline rapidly over the first month - perhaps giving an average IP 30 rate of around 0.5 mmcf/day? Then decline that 0.5 mmcf/day hyperbolically or harmonically by 85-90% over the first year - not exponentially or straight line decline - hyperbolic or harmonic!
0.5 mmcf/day first month would be around 0.075 mmcf/day over the last month at 85% decline - and being harmonic or hyperbolic most of that decline will be over the first two months.
Lets give it one month at 0.5 mmcf/day, then month 2 at 0.35 mmcf/day, month 3 at 0.25 mmcf/day, month 4 at 0.20 mmcf/day - and then straight line it from 0.2-0.1 mmcf/day for generous simplicity. Sales gas net at ~ C$5.7 per mcf. (From Company reports)
Months five through twelve, eight months at (0.2+0.1) /2 (for generous simplicity) = 0.15 mmcf/day for ~ 245 days, 0.15x245 = 36.75 mmcf.
EDIT: (Brain fart yesterday - bad case of slipped decimal points...)
Corrected:
Month one 0.5x30 = 15 mmcf.
Month two 0.35x30 = 10.5 mmcf.
Month three 0.25x30 = 7.5 mmcf.
Month four 0.2x30 = 6.0 mmcf.
Months five through twelve, eight months at (0.2+0.1) /2 (for generous simplicity) =
0.15 mmcf/day for ~ 245 days, 0.15x245 = 36.75 mmcf. Lets restate the arithmetic.
Total production for the first full 12 months on production:
15+10.5+7.5+6.0+36.75=75.75mmcf.
75.75 mmcf at C$5.70 per mcf equals 1000x75.75x5.7= C$431,775 or C$0.432 million dollars. Even if we double the average rate through the year we are at less than C$1 million dollars for first year production. That steep (hyperbolic) decline of approximately 85% plus or minus is a real killer. (The numbers given as an example are probably closer to an exponential decline - which is more generous over the first year than either hyperbolic or harmonic decline.
Next...
GS
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