Arps decline · EUR · NPV & IRR · payout · breakeven price
Costs are charged at WI, revenue is received at NRI. Use the royalty / NRI calculator to get your NRI, and the decline curve fitting tool to get qi, decline and b from production data.
Tax rates are illustrative, not state presets. Enter your own.
How the economics tools fit together: NPV, payback, tariffs and operating costs
Arps (1945) describes how well rate falls with time: exponential (constant percentage decline), hyperbolic (decline slows over time, exponent b typically between 0 and 1; above 1 is common for early shale production and needs a terminal decline) and harmonic (b = 1). Hyperbolic with a terminal exponential decline is the standard way to forecast shale and tight wells.
Nominal decline Di is the instantaneous rate in the equations. Effective decline is an annual percentage, defined two ways (SPEE REP 6): secant effective is the actual drop in rate over the first year (65% means the rate falls to 35%), giving hyperbolic Di = ((1-De)^(-b) - 1)/b; tangent effective gives Di = -ln(1-De) for any b. The two are equal for exponential decline. Choose the convention your decline came from.
The flat oil price at which the well NPV, at your discount rate, equals zero. Below it the well does not earn your required return. This calculator solves it by holding the gas price and all costs fixed.
EUR is the cumulative production from the decline curve until the economic limit (the first month operating cash flow is negative) or the maximum well life. It changes with price and costs because a higher price extends the economic life.
No. It is a screening model with flat prices, a constant gas-oil ratio or condensate yield, and no shrink, differentials, escalation or abandonment cost. Use it to compare scenarios, not to book reserves.