February 19, 2017

Chesapeake Shows the Real Decline Curve to the SEC and Investors

Chesapeake Spring 2010 Stockholders Report Filed with the SEC

Arthur Berman first calculated the decline rates in 2009 – once public,  the companies could not lie to their stockholders – they sort of tried to hide it on page 10, but… we noticed!

Chesapeake spring 2010 stockholders report – see page 10 (below) for gas well decline rate. Production goes up by drilling more and more wells.
Decline rate is 70% the first year and the 30% of the balance the second year – so the decline rate is 85% in two years  and unproductive in a year or so more – as much of the Barnett shale is after producing for less than 5 years and gas wells are being plugged in PA after about five years.

The darker color line in the graph below is the production curve of an individual gas well – the production drops to 15% of the initial production within two years.  The rising lighter colored curve is total production of all Chesapeake’s gas wells – this rising production curve happens by drilling more and more wells because the wells decline so fast.  SEE enlargable image on page 10 of the full report – link below.

 

View Full Report Here