Close the Loop: From Geology Assumptions to Live Production Reality

I want to walk you through something that happens in every oil company, every day, and most people never stop to think about how much money rides on it.

Your geology team proposes a well. They run through the play. They look at the structure. They find the trap. They estimate the odds of hydrocarbons. Then they send it over to engineering and say, let’s get an AFE. Let’s go build this thing out. Let’s go drill it.

And there are a lot of assumptions that went into that decision. The reservoir quality. What did the offset wells produce? What are we basing our economics on? What’s the IP at thirty days? Ninety days? What’s the decline curve? What do we project for ultimate recovery?

Robert Wichert called it exactly what it is on Wisdom at the Wellhead: that’s all financial guesstimate to justify the well.

He’s right. And I’ve lived inside that reality for thirty years. Every well starts with a guess. The question is what happens after the bit hits the ground. Do you close the loop between what you assumed and what the reservoir actually does? Or do you just move on to the next AFE and hope the assumptions hold?

What if every well you drilled made the next well smarter?

The Decline Curves We’re Still Using Were Built in a Different Era

Robert made a point on the podcast that I think exposes one of the biggest blind spots in how we plan wells. He said that a lot of the time, we’re basing our decline curves on wells that were completed in the 1970s or 1980s. And what did they do back then? They perforated and walked away.

Think about that for a second. We’re making million-dollar capital decisions today based on production behavior from wells that were completed with technology from forty or fifty years ago. No modern frac design. No optimized perforating. No understanding of what the rock could actually deliver with today’s completion methods. The assumptions baked into those old type curves are conservative by default, not because the reservoir is limited, but because the completions were.

I’ve seen this in my own career more times than I’d like to admit. You look at the type curve for a play and it tells you one story. Then somebody goes in with better science, gets more cores, really understands the rock, customizes the completion, and the well blows past the projection. The reservoir was never the problem. The assumptions were.

What Closing the Loop Actually Looks Like

Robert described a process at Cougar that I think every operator should study. Once a well is drilled and comes online, they’re measuring production daily. Sometimes more frequently. And immediately, they can compare the actual decline curve with what they projected it to be.

That’s the loop. Geology makes assumptions. Engineering builds an AFE based on those assumptions. The well gets drilled. Production data comes in. And instead of filing that data away and waiting for the annual reserves review, somebody is looking at it right now, comparing it to what was expected, and asking the question: are we beating the decline curve?

If the answer is yes, you need to understand why. Was it the completion design? The fluid system? Something about the reservoir that the old type curves didn’t capture? And then you need to ask the follow-up question that Robert is already asking: can we do that again on the next well?

If the answer is no, if the well is underperforming the projection, you need to understand that just as fast. Because every day you spend assuming the old plan is fine is a day you’re not fixing whatever went wrong.

Take More Science. Understand the Rock.

One of the things Robert said that resonated with me was his approach to breaking out of old assumptions. He said: we’re going to take more science. We’re going to get more cores. We’re going to really understand the rock. We can customize the completion.

That word “customize” is important. Most operators don’t customize completions to the rock. They apply whatever worked last time, or whatever the service company recommends, or whatever fits the budget. And then they wonder why the results are inconsistent. The rock is different from well to well, zone to zone, sometimes foot to foot. If you’re applying the same completion design everywhere without understanding what the rock actually needs, you’re leaving performance on the table.

I spent fifteen years as a petroleum engineer, and one of the things I learned early is that the reservoir doesn’t care about your assumptions. It produces what it produces based on the physics. Your job is to get the completion right for the rock you’re in, not the rock you wished you were in. And the only way to do that consistently is to close the loop. Drill. Measure. Compare. Adjust. Repeat.

Why Most Companies Don’t Close the Loop

I’ll be honest about this because I’ve been part of it. The reason most companies don’t close the loop is because the data isn’t connected. Geology lives in one system. Engineering lives in another. Production data sits in accounting and doesn’t show up for sixty days. By the time you could actually compare what you assumed to what happened, the next three wells are already designed and permitted.

That’s the integration problem showing up in a place most people don’t think about. It’s not just an accounting convenience. It’s the difference between making your next well based on real feedback and making it based on the same assumptions you used last time.

Robert doesn’t have that problem because he connected everything before he started operating. Production data flows into the same system as the engineering projections. The comparison happens naturally. The loop closes by design, not by heroic effort from some analyst pulling data out of three different databases at quarter-end.

Final Thought

Every well you drill teaches you something. The question is whether your systems are set up to capture the lesson, or whether it gets buried in a spreadsheet that nobody opens until the reserves auditor asks for it.

Close the loop. Compare what you assumed to what happened. Understand the rock you’re actually in, not the rock the 1980s type curve says you’re in. And let every well make the next one smarter.

The reservoir is always telling you the truth. The only question is whether you’re listening.

Robert Wichert built Cougar Energy so the feedback loop between geology, engineering, and production never breaks. On Wisdom at the Wellhead, he walks through exactly how that changes the way you plan, drill, and complete every well in a program.