The barrels of oil or gas mcf per day declared in Well Completion reports seems to always be much higher than the production per month eventually declared by the purchasing company. Any explanation for why this happens?
Many reasons, but generally speaking a well will decline steadily over its life, beginning from Day 1. There also can be legitimate reasons to not produce a well at its wide-open potential, such as limiting frac sand flowback, fracture closure, water coning, near wellbore gas breakout and other problems that could hurt the well in the long term.
Also, many Companies will extrapolate short-term tests of only an hour or two to come up with impressive (and unrealistic) 24 hour rates to announce to the public. This is more prevalent among smaller public Companies looking to boost their stock price. There is no regulatory standard as to exactly what procedure is to be applied to the measurement of initial production.
Thanks very much. As an aside, the instances I've recently noticed were within 6-months of completion of a well.
For any public company, keeping the stock price up is probably the main culprit. Steve explained it well.