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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: Umunhum who wrote (125038)	10/19/2009 2:50:18 PM
From: cyesp	3 Recommendations of 206181

The shale play analysis is interesting and caution is merited, but I struggle with his decline analysis for the first 10-20 years. Shale formations are clearly tight and I have never seen a tight formation decline exponentially, every single one declines hyperbolically. It is related (I believe) to a bounded vs unbounded reservoir size. A tight formation is so tight it doesn't see the reservoir boundary in 10 years time. Natural fractures add an additional complexity, but should not effect this behavior. Excessive infilling to the point of well to well interference could cause the declines he is reporting.

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