DEFINITION of 'Decline Curve'
A method for estimating reserves and predicting production in oil reservoirs and oil fields. The decline curve shows how oil and gas production rates decrease over time.
BREAKING DOWN 'Decline Curve'
Most decline curves are based on exponential, hyperbolic or harmonic Arps equations, but tend to have shortcomings such as underestimating reserves, underestimating production rates, or overestimating reservoir performance. The Arps equations were developed in the mid-1900s but are still used today despite their limitations.