Type curves and production decline
Arps decline, EUR, the base and wells drilled.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: type curves and production decline.Updated 5 November 2026
Part of project finance and infrastructure models, with the models, labs and guides around it.
What it does
Production built from wells rather than grown at a rate. A type curve gives one new well’s average rate in each year online: a first-year rate, then an Arps decline, q1 x (1 + b x Di x (t - 1))^(-1/b), which falls steeply at first and flattens as the exponent b rises; at b of nil it is the exponential decline. The sum of the curve is the well’s estimated ultimate recovery (EUR). The wells already producing decline on their own, shallower curve; the development budget divided by the cost of a well gives wells drilled, and each vintage of wells adds its own type curve from the year it comes online. Production is the base plus every vintage, in boe with gas at 6 mcf to the barrel, split into oil, NGLs and gas.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Assumptions, rows 24–38: Days in the year, Type curve: first-year average rate per well, Type curve: initial annual decline (Di), Type curve: hyperbolic exponent (b)…
- Production, rows 6–9: Average rate per well, Production per well, Estimated ultimate recovery (EUR) per well, Development cost per boe of EUR, FY0
- Production, rows 12–16: Producing wells at FY0 (base decline), Wells drilled in FY0, Proved developed production, Producing wells at FY0, annual…
- Production, rows 19–25: Cost per well, Development spending, Wells drilled, Wells drilled in FY1…
- Production, rows 28–34: Production, Production growth, Production, annual, Oil…
What a reviewer looks for
- Production grown at a rate, so the drilling needed to offset decline never shows.
- An exponential decline on shale wells, which cuts off the long tail and understates EUR.
- Wells counted as producing in the year they are drilled, with no time to complete and connect them.
Learn it, then build it
Vocabulary: Barrel of Oil Equivalent (boe), Proved Reserves (1P and 2P).