How to Predict Decline Rate, Production and Lifespan of a Well?

Colorado Mineral Rights Weld County, CO
1

HI--I'm new here and have enjoyed reading through many discussions in this forum and on the MineralWeb site. I've learned a lot but I still have a few questions:

We inherited mineral rights from my husband's parents and grandfather. We are currently receiving royalties from EOG from a well in Randall Creek, Weld County and are trying to plan for the future-VERY conservatively.

Is there any way to predict the lifespan of the well? The projected output and decline rate? Is that something EOG would tell me if I call their royalty-related number? Is there a way to predict production based on their investment in the well? Thanks!!

2

Do not think you are going to get a real answer as I have always been told "your guess is as good as ours" from the oil guys. With all the new drilling and fracking technics, I don't really think they know. Our first well was drilled in 1968 and has been re-drilled and fracked so many times I have lost count, but its still producing.

Talk to your accountant as you are allowed by the IRS a depletion deduction on your tax returns.

  • Depletion Allowance - The depletion allowance is one way to accomplish this. Since minerals are a finite source and will eventually play out, the IRS code generally allows royalty owners to deduct up to 15% of the income from their mineral interests.
3

Thanks, Gary. The month to month extraction last year varied so much I'd love to know what we can expect in the future. I'm impressed your well is still producing since 1968!