To turn a DUC well into a producing well, it must be stimulated. Pumping crews isolate sections of the lateral (stages) and pump fluid (slickwater) mixed with sand (proppants) down the wellbore under high pressure (often exceeding 8,000 PSI). This pressure creates tiny fractures in the shale rock. The sand grains lodge inside these cracks, keeping them propped open when the pump pressure is released, creating open conduits for hydrocarbons to flow to the wellbore.
When a new well is first opened to the pipeline, engineers measure its initial flow rates to evaluate reservoir pressure and model future economic returns:
Horizontal shale wells exhibit a unique production profile known as a hyperbolic decline curve. Unlike conventional wells that produce steadily for decades, shale wells start with massive IP rates but decline rapidly. A typical Permian horizontal well will experience a 60% to 80% drop in production within its first 12 months. After this initial steep decline, the well transitions into a long, slow decline tail (typically dropping by only 5% to 8% annually), producing low volumes for 20 to 30 years.
For mineral and royalty owners, the spudding and completion of a new well represents the start of royalty checks. Payouts are highest during the first 6-12 months of the well's life (the flush production phase). Owners must expect their royalty payments to decline in line with the hyperbolic curve, planning their personal finances around the stable legacy tail rather than the initial flush payout.