so, since almost nothing was known about it) , it represented a composite of oil 

 men's opinions on operating costs, probable rate of decline, and expected profits. 

 Even today, the net daily barrels produced is used as a yardstick in evaluating 

 some properties. 



As the oil industry grew, some systematic operators began to keep charts 

 on the wells and to draw curves on their production. As every well was always 

 produced at its maximum rate, these charts recorded not only the decline of 

 daily production but also the decline of daily capacity. As none of the wells 

 ever increased, these curves became known as decline curves. From the study 

 of many of these curves, it became apparent that in many fields, the decline 

 followed a certain pattern. Observers found that they could draw an average 

 curve of all the wells, and could fit any well curve into a portion of a master 

 curve — and that, properly placed, the future performance of that well followed 

 the master curve. From this fact evolved the Law of Equal Expectations ex- 

 pressed as: "If two wells under similar conditions produce equal amounts during 

 any given year, the amounts they will produce thereafter, on the average, will 

 be approximately equal regardless of their relative ages." In other words, a 50- 

 barrel-a-day well that is 10 years old will produce about as much oil in the 

 future as a 50-barrel well that is 1 year old. 



Of course, decline curves had little to do with subsurface geology. Our 

 knowledge of subsurface geology was expanding each decade, but figuring 

 reserves was a matter of daily production figures and graph paper. Family 

 curves, composite curves, running averages, comparative ratios, cumulative- 

 productive curves — all had their sponsors and special uses. Plotting the curves 

 on logarithmic or semi-logarithmic papers made a straight line out of the curves 

 and aided in their projection. 



The matter of estimating how much oil a well would produce in the future 

 from facts on its past production, and the past production of other wells, attained 

 a high degree of proficiency with an exacting standard of accuracy. The future 

 production of a well could be closely predicted, with or without a knowledge of 

 subsurface geology. It is still true that when decline curves are available (as 

 in the later life of wells, when they will no longer make their allowable, and are 

 thus being produced at capacity) a proper projection of the curve gives the 

 best possible estimate as to both the ultimate production of a well and the rate 

 of that production. 



PRORATION One of the really great changes in the oil 



industry came in about 1931 with the advent 

 of overproduction. The oil industry has always been plagued by overproduction 

 and periodic price declines. As early as 1926 legal efforts were made to curtail 

 production equitably (always claimed in the cause of conservation, but actually 



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