Production decline rates and declining curves at the ultra-high water cut stage can be used to predict the recoverable reserves and recoverable reserves of remaining oil, which is of great significance for the development and adjustment at the ultra-high water cut stage. In this paper, Arps decline curve is used to fit the production data before the ultra-high water cut stage and to predict the production at the ultra-high water cut stage. It is found that the prediction results have a large error with the actual production and can not describe the production decline rule at the ultra-high water cut stage. Based on the relative permeability curve that reflects the nature of oil-water two-phase flow, with the theory of oil-water two-phase flow and the reservoir engineering method, the formula for calculating the production decline rate at the ultra-high water-cut stage is deduced and re-recognized the law of declining production at the ultra-high water cut stage. The result shows that the production decline rate at the ultra-high water cut stage is exponential declining; as the change rate of oil phase relative permeability changes after entering ultra-high water cut period, the exponential decay based on the data of decreasing production before ultra-high water cut period can’t accurately forecast the production at the ultra-high water cut stage. In predicting the production at the ultra-high water cut stage, an exponential decline curve fitting is required using the production decline data at the ultra-high water cut stage.