TECHNICAL NOTE

Reserves Estimation Using a

PC Decline Analysis Program
F.S. HSIEH
Sproule Associates Limited

C. VEGA, L. VEGA
Vegga Projects Ltd.

q = kt ( n+ mt ) ...........................................................................................(1)

Abstract
Arps equations and type curve matching are the two major
decline analysis techniques for reserves estimation. Both techniques extensively depend on a trial-and-error approach to
define the decline exponents, particularly, for the case of hyperbolic decline. This paper presents a PC-based decline analysis
program developed based on the method released in recent
papers. This program can be applied to analyse a wide range of
decline types, including the most complicated hyperbolic
decline. It improves the accuracy of the analysis, and it can be
conveniently executed from a PC with an Excel spreadsheet.

Introduction
Decline analysis is frequently conducted to predict future well
rates by extrapolating a curve based on an equation that best fits
the historical rate-time performance of that well. Two commonly
used approaches are the least-squares method and the type-curve
match method. Both methods are aimed at identifying the parameters that would best fit one of the three empirical decline types:
the exponential, the hyperbolic and the harmonic declines developed by Arps(1).
To apply the least-squares a method to Arps equations, one
must assume the type of decline based on the historical performance before the mathematical curve fitting technique can be performed. The process of assuming a decline type is inconvenient,
difficult and time-consuming. The type-curve matching method
also has some disadvantages, mainly due to the non-uniqueness
problem in determining the correct type-curve to use.
This paper presents an easy to apply technique based on the
rate-time decline equation presented by Hsieh et al.(2, 3). The simplicity of this method is assured because of the use of a universal
decline equation instead of the three presented by Arps. The adequacy of the new formulation and the readiness for applying a
spreadsheet approach to the new formulation is illustrated with a
field example.

Review of Proposed Equation

This section briefly reviews the rate-time decline equation that
will be programmed using VBA (visual basic application) of
Microsoft Excel. The details on the development of the equation
can be found in the SPE (Society of Petroleum Engineers) papers
presented by Hsieh et al.(2, 3)
The rate-time decline equation proposed by Hsieh et al. contains a time-dependent exponent as,

Equation (1) contains two exponents, n and m. During the production period (pressure decline or pressure change) a well may
experience hysteresis effects such as the formation of free gas,
encroachment of aquifer water, and reduction of permeability, etc.
Changing physical conditions with pressure or time usually accelerates the decline rate, and acceleration of the decline rate gives
the rate-time curve an ever-changing, time-dependent slope. Hsieh
et al. use the time-dependent exponent m to model this effect. In
Equation (1), k is the initial flow capacity from which the current
decline cycle (the decline cycle being analysed) began, rather than
the average rate during the initial (first) time interval.
Rate-time decline is usually a hyperbolic function as reported
by Cutler(4). The reason that time decline is usually in a hyperbolic
function has also been discussed in the same paper by Hsieh et
al. (2) Equation (1) can be applied to analyse a wide range of
decline scenarios, because it is in a form for analysing hyperbolic
decline, and by varying the time-dependent decline exponent m
the slope of the rate-time curve can be adequately matched.

Identify Decline Exponents

Equation (1) can be seen as,

( )( ) ....................................................................................(2)

q = k t n t mt

In Equation (1) and (2), n is the decline exponent that dominates the earlier stage of a decline cycle (when t is small) and m
is the hysteresis exponent that gradually intensifies with increasing production time (decreasing reservoir pressure). Therefore,
one can identify the exponent n by matching the early historical
rate-time data of the current decline cycle, and once n has been
identified, m can be found by matching the remaining rate-time
history.

Spreadsheet for Decline Analysis

An Excel spreadsheet with automatic curve-fitting (Add
Trendline) options can significantly simplify decline analysis. The
following general steps illustrate the use of a spreadsheet (Table
1) for decline analysis. The shaded cells in Table 1 mark the input
data.
Arrange the historical rate-time data in certain time inter-

This paper is being published as a technical note and has not been peer reviewed.
November 2001, Volume 40, No. 11

TABLE 1: Spreadsheet application example.

vals, beginning with the first rate-time data as the second

point (cell C51). The time intervals may be day, month or a
fraction of year. In this example a three month interval is
used. The time intervals do not have to be equally spaced,
however, they must be in the same time unit. The unit of
volume depends on the type of well (oil or gas).
Construct a plot of rate vs. time using historical data, cover
only the first several points (first year data from cells B50 to
C54 in this example). One may use smaller time units to
populate the number of input data points if the production
history is short.
2

Activate the Add Trendline option in Excel and ask for

displaying the power equation that best matches the early
rate-time history or use Equation (1) with m = 0. Now, the
required input data, such as k and n, can be found from the
displayed matching equation (Figures 1 and 2). Alternately,
VBA codes can be prepared so the spreadsheet will continuously display the matching trend lines corresponding to k
values have also been programmed to change at a predetermined increment from a certain lower limit (100,000 at
cell G49 is used in this example) to certain upper limits. The
user stops the search when the best n and k values are found
Journal of Canadian Petroleum Technology

through the matching/scanning process. In this example,

based on the first year production history the values for k
and n are found to be 273,314 and 1.1567, respectively.
Subsequently, the k and the n values are entered into cells
G51 and J51, respectively, to continue the search for the
exponent m.
One may identify m by repeatedly entering different m values together with the previously identified values of k and n
into Equation (1) to match the remaining available historical
data (from cell C55 down in this example). Alternately, one
can prepare VBA codes to find m by scanning the match
similar to the above process for finding n until the one that
gives the best match is found. In this example, the resulting
m is found to be 0.0012 (echoed at cell G53). The user may
enter a refined m (0.00125 at cell H53) based on the value
from the scanning, echoed at G53.
Once the needed parameters (k, n and m) have been defined,
the future rates (column D) and the cumulative productions
(column E), after the last historical point (cell B54), can be
calculated to a date that adequately covers the required
length of the prediction time.
The attached figures (log-log plot and semi-log plot) illustrate
the process and the results of the evaluation.

NOMENCLATURE
k

= flow capacity from that current decline cycle begins,

volume/time
m
= time-dependent hyperbolic decline exponent due to hysteresis effects during pressure decline
n
= hyperbolic decline exponent observed/identified from
early rate-time history
Pi
= initial reservoir pressure from that current decline cycle
begins, kPa
q or y = production rate, volume/time
t or x = any time unit used in decline analysis, day or month or
year
x
= a fraction applied to Pi

REFERENCES
1. ARPS, J.J., Analysis of Decline Curves; Trans. AIME, p. 228, 1945.
2. HSIEH, F.S., KANDEL, P.S., and VEGA, C., Material-Balance
Method for Production Rejuvenation With Horizontal Wells; paper
SPE 65484 presented at the 2000 SPE/the Petroleum Society
Horizontal Well Technology, Calgary, AB, November 6 9, 2000.
3. HSIEH, F.S., VEGA, C., and VEGA, L., Applying a Time
Dependent Darcy Equation for Decline Analysis for Wells of
Varying Reservoir Type; paper SPE 71036 presented at the SPE
Rocky Mountain Petroleum Technology Conference, Keystone, CO,
May 21 25, 2001.
4. CUTLER, W.W. Jr., Estimation of Underground Reserves by Well
Production Curves; Bull. USBM, p. 228, 1924.

Limited Production History

The approach for dealing with short production history is to
populate the limited available rate-time data using smaller time
units such as month or day. Usually, five data points are needed
for identifying n and another five data points are needed for identifying m. Another approach is to use most of the available data
for identifying n, then continue on the analysis by assuming that
m = 1/(x*Pi) as shown in the example (cell L53). Pi (cell J53) is
the reservoir pressure in kPa at which the current decline cycle
begins, and x is a fraction. Usually, the value of x is found to be
around 0.064 (0.4 if Pi is in psia). However, the second approach
should only be taken after the first approach has been tried. The
first approach is usually effective in dealing with short production
history.

Reserves Booking
The reserves obtained from decline analyses are the technical
reserves based on the past well performance. One can run this
spreadsheet to generate new predictions (reserves scheduling)
with the use of higher (or different) m values to obtain reserves
for different (lower) risk categories.

Authors Biographies
Frank Hsieh is a senior petroleum engineer at Sproule Associates Limited, specializing in the hydrocarbon-in-place and
reserves estimations. His experience
includes reservoir engineering, formation
evaluation and reservoir simulation. He has
conducted numerous reservoir simulation
studies and workshops worldwide. Frank
received a B.Sc. in chemistry from the
National Chung-Hsing University in
Taiwan, later, a B.Sc. in petroleum engineering from Louisiana Tech University. He is a member of
APEGGA and SPE.
Cecilia Vega is currently a math and science teacher. Previously, she was a petroleum engineer at Ecopetrol (Colombian
National Oil Company) and a reservoir
engineer at ICP (Colombian Petroleum
Institute) after receiving a B.Sc. in petroleum engineering from UIS (Santander
Industrial University) in Colombia.

Conclusions
Commonly available spreadsheet programs such as Excel are
well suited for conducting decline analyses using the rate-time
equation proposed by Hsieh et al. The approach presented in this
paper can be taken by users to prepare their own decline analysis
programs for analysing a wide variety of the hyperbolic decline
scenarios, and generating future reserves schedules at different
risk categories for economical evaluations.

Lucy Vega is currently a core analyst at

Core Laboratories in Calgary. Previously,
she was a core analyst at Core Laboratories
in Colombia after receiving a B.Sc. in
chemical engineering and a B.Sc. in petroleum engineering, both from UIS
(Santander Industrial University) in
Colombia.

Acknowledgements
We would like thank Sproule Associates Limited and Vegga
Projects Ltd. for supporting the project and their permission to
publish this paper.
November 2001, Volume 40, No. 11