API (American Petroleum Institute)
A trade association for the petrochemical industry.
Barrel
A unit of volume equal to 42 U.S. gallons.
Barrels of Oil Equivalent (BOE)
A measure of the energy of non-oil fuels. For example, a BOE of natural gas is roughly 6,000 cubic feet. The measure is derived by assessing the amount of a fuel required to generate the same heat content as a typical barrel of oil.
Benchmark Crude Oil
An established variety of crude oil used by a country as the standard of comparison in documenting the properties of other oils and in setting prices. West Texas Intermediate is the U.S. benchmark. Brent is the benchmark in the U.K.
Bcf
One billion cubic feet.
Bcfe
One billion cubic feet of natural gas equivalent.
Blowout
A sudden, uncontrolled flow of fluid from a well.
Blowout Preventer (BOP)
A safety device installed to allow closure of a well should it begin a blowout, and to control escape of pressurized fluids during drilling and related operations. A blowout preventer stack is mounted on top of a well and consists of a series of rams and spools for closing down a wellhead.
Bonus
Cash consideration paid to a landowner or mineral owner on the execution of an oil, gas or mineral lease.
Borehole
A hole resulting from the drilling (boring) of a well.
Bottomhole Assembly
The drill collars, sub pipe and adapters and bit installed at the bottom of a drill.
British Thermal Unit (BTU)
The quantity of heat needed to raise the temperature of 1 pound of water by 1 degree Fahrenheit at or near 39.2 degrees Fahrenheit.
Bulk Terminal
A facility, used primarily for the storage and/or marketing of petroleum products, which has a total bulk storage capacity of 50,000 barrels or more and/or receives petroleum products by tanker, barge or pipeline.
Cased Hole Log
A wireline logging device installed in a well that has been successfully cased. Cased hole logs enable engineers to analyze and monitor the characteristics and movements of a given well.
Casing
A steel pipe with a large diameter that supports the walls or sides of the borehole to prevent them from caving in.
Casinghead
A fitting attached to the top of the casing in an oil or gas well that regulates the flow of oil or gas, allowing the pumping of oil from the well.
Check Stub
Stub attached to a check disclosing month of production, gas or oil, price received, and total volumes produced.
Christmas Tree
An intricate assemblage of pipe connections, gauges, fittings and valves/controls located at the top of a casing of a flowing oil well. The Christmas tree controls the flow of the well.
Coalbed Methane
A natural methane gas that is found in coal seams, while traditional natural gas deposits are trapped in porous rock formations. A small amount of CBM is already produced successfully in the Rocky Mountain region of the U.S.
Condensate
A term used to describe light liquid hydrocarbons separated from crude oil after production and sold separately.
Condensate (Lease)
A liquid recovered from natural gas at the well or at small gas/oil separators in the field. Consists primarily of pentanes and heavier hydrocarbons. Also called field condensate. Does not include plant condensate
Condensate (Plant-Petroleum)
A light hydrocarbon liquid, consisting mostly of pentanes and heavier hydrocarbons, recovered by condensation of hydrocarbon vapors at natural gas liquids processing plants.
Conveyances
The interest, property or rights transferred from one party to another party.
Crude Oil
A mixture of hydrocarbons that exists in liquid form at atmospheric pressure after passing through surface separating facilities. Included are lease condensate and liquid hydrocarbons produced from tar sands, Gilsonite and oil shale. Drip gases are also included, but topped crude oil (residual) and other unfinished oils are excluded. Liquids produced at natural gas processing plants and mixed with crude oil are likewise excluded where identifiable.
Decline Curve
A graphic representation of projected oil production over time.
Deepwater Well
An offshore well drilled in more than 1,000 feet of water depth.
Delayed Rental
Yearly payments paid during primary term to lessor to delay drilling.
Depletion (Economic)
The reduction in value of a mineral deposit as it is depleted through production.
Depletion (Physical)
The consumption of a mineral deposit by production of the mineral to the point that its deposits are no longer available.
DIP
This is your interest in the revenues of a well. Also referred to as net revenue interest.
Directional Drilling
Involves the intentional inclination of a well away from vertical in order to optimize production and enable drilling in challenging environments. Sometimes referred to as slant drilling, the process has generated public controversy over related attempts to extract oil from under the Great Lakes and was cited by Iraq as one of its grievances with the emirs of Kuwait, leading to its invasion of the country in the early 1990s. Also called deviation drilling.
Division Order
A schedule of owners and their decimal share in revenues of the well, derived from the sale of oil or gas.
Downstream
The segment of the oil and gas business involved in the secondary and final phases of the use of production from wells. That is, the post-well delivery of oil and gas through the pipeline to the refinery and processing plants and/or tothe final customers. Downstream is the opposite of upstream.
Drill Bit
The cutting device connected to the bottom end of a drill, used to bore through rock formations in drilling.
Energy Information Administration (EIA)
An independent agency within the U.S. Department of Energy, the Energy Information Administration (EIA) develops surveys, collects energy data and does analytical and modeling analyses of energy issues.
Enhanced Oil Recovery
Any enhancement of oil recovery methods, most typically involving flooding depleted reservoirs with water or gas in order to recover any remaining oil.
Exploratory Well
A well drilled to find and produce oil and gas in an area previously considered unproductive, to find a new reservoir in a known field (i.e., one previously producing oil or gas in another reservoir) or to extend the limit of a known oil or gas reservoir.
Explosive Fracturing
A specific fracturing technique in which nitroglycerin is exploded at reservoir depth in order to create fracturing and stimulate production. This technique is also known as well shooting.
Federal Energy Regulatory Commission (FERC)
A quasi-independent regulatory agency within the Department of Energy having jurisdiction over interstate electricity sales, wholesale electricity rates, hydro-electric licensing, natural gas pricing, oil pipeline rates and gas pipeline certification.
Forced Pooling
The bringing together, as required by law or a valid order or regulation, of separately owned or separate interests in small tracts sufficient for the granting of a well permit under applicable spacing rules.
Fracturing
Application of hydraulic pressure to the reservoir formation to create fractures through which oil or gas may move to the wellbore.
Futures Contract
An agreement to buy or sell a specified number of shares of a particular stock or commodity in a designated future month, at a price agreed upon by both buyer and seller. Futures contracts are frequently traded on the futures market. They differ from options in that options offer the right to buy or sell, while futures contracts bind the buyer and seller to an actual transaction.
Gas Injection
A production enhancement technique in which natural gas is injected into oil reservoirs, thereby maintaining reservoir pressure and continuing the flow of oil to operating wells.
Grantee
Persons receiving the conveyed property, minerals, etc. from a grantor(s).
Grantor
Persons who makes a grant in legal form of property, minerals, etc.
Gross Income
Royalty income before subtracting taxes, deductions and other costs.
ICE
Intercontinental Exchange. An electronic futures and commodities exchange headquartered in Atlanta, Georgia, focused on energy markets.
Improved Oil Recovery
Any of the conventional methods of secondary recovery (in which water is injected into a reservoir in order to move remaining oil toward producing wells) or enhanced oil recovery methods that are used to optimize production from increasingly depleted reservoirs.
Independent Oil Company
Any domestic oil company that is not one of the major international oil companies such as BP, ExxonMobil or Royal Dutch/Shell. It also refers to any U.S. oil company that is not part of the 18 to 20 largest integrated oil companies in the United States.
Institution Date
The effective or start date for a legal instrument such as a mineral lease.
Landman
A person who negotiates the purchase of leases, generally an agent or an employee of an oil company.
Lease
A legal instrument giving a lessee permission to prospect for oil and gas in a defined area of land.
Liquefied Natural Gas (LNG)
Natural gas that is liquefied by reducing its temperature to -260 degrees Fahrenheit at atmospheric pressure. The volume of the LNG is 1/600 that of the gas in its vapor state. LNG requires special processing and transportation. First, the natural gas must be chilled in order for it to change into a liquid state. Next, the LNG is put on specially designed ships where extensive insulation and refrigeration maintain the cold temperature. Finally, it is offloaded at special receiving facilities where it is converted, via regasification, into a state suitable for distribution via pipelines.
Locations
Land details associated with a land description such as the survey/abstract or section/township/range. These are not required but can be helpful when searching for a particular tract of land and any nearby tracts.
Log (Petroleum)
A record of the activities related to the drilling and completion of oil and gas wells.
Mbbl
One thousand barrels.
Mcf
One thousand cubic feet.
Mcfe
One thousand cubic feet of natural gas equivalent, using the ratio of six Mcf of natural gas to one Bbl of crude oil, condensate and natural gas liquids.
Mineral Deed
A legal document showing mineral and/or royalty ownership.
Mineral Interests
The rights of ownership to gas, oil or other minerals as they naturally occur at or below a tract of land.
Mud (Drilling)
A mixture of one or two liquid phases (water, oil and related emulsions) with clay that circulates during drilling in order to cool and lubricate the bit, remove material from the borehole and bring traces of fluids to the surface. The characteristic qualities of the drilling mud can be engineered to provide specific indicators to surface workers.
Natural Gas Liquids
Those hydrocarbons in natural gas that are separated from the gas as liquids through the process of absorption, condensation or other methods in gas processing or cycling plants. Generally such liquids consist of propane and heavier hydrocarbons and are commonly referred to as lease condensate, natural gasoline and liquefied petroleum gases. Natural gas liquids include natural gas plant liquids (primarily ethane, propane, butane and isobutane) and lease condensate (primarily pentanes produced from natural gas at lease separators and field facilities).
Non-Operated Working Interest
A working interest owner in a well, but not the operator.
Non-Participating Royalty
A royalty interest which “participates” in any oil, gas or mineral found but does not “participate” in lease bonuses or rentals.
NYMEX
New York Mercantile Exchange, Inc. (NYMEX Exchange). The company is a major provider of financial services to the energy and metals industries including the trading of energy futures and options contracts.
Octane Rating
A number used to indicate motor gasoline’s antiknock performance in motor vehicle engines. The two recognized laboratory engine test methods for determining the antiknock rating, or octane rating, of gasoline are the research method and the motor method. To provide a single number as guidance to the customer, the antiknock index (R + M)/2, which is the average of the research and motor octane numbers, was developed.
Oil Shale
Sedimentary rock that contains kerogen, a solid, waxy mixture of hydrocarbon compounds. Heating the rock to very high temperatures will convert the kerogen to a vapor, which can then be condensed to form a slow flowing heavy oil that can later be refined or used for commercial purposes. The United States contains vast amounts of oil shale deposits, but so far it has been considered not economically feasible to produce from them on a large scale.
OPEC
Organization of Petroleum Exporting Countries. Current members are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela. Ecuador withdrew from OPEC on December 31, 1992, and Gabon withdrew on December 31, 1994.)
Operator
Term used to describe a company appointed by venture stake holders to take primary responsibility for day-to-day operations for a specific plant or activity.
Overriding Royalty Interest
A royalty in excess of the royalty provided in the oil lease usually added on during an intervening assignment.
Paid Up
A lease in which no ongoing rental fees are required to maintain the lease.
Packer
A rubber-like cylinder that is used to seal a well at a given level. A packer is often equipped with a flowmeter, forcing the flow of fluid through a monitoring device providing data to the surface.
Pipeline (Natural Gas)
A continuous pipe conduit, complete with such equipment as valves, compressor stations, communications systems and meters, for transporting natural gas and/or supplemental gaseous fuels from one point to another, usually from a point in or beyond the producing field or processing plant to another pipeline or to points of utilization. Also refers to a company operating such facilities.
Plugged and Abandoned (P&A)
A term describing a dry hole or depleted site that has been fitted with a cement plug to close the well.
Porosity
Percentage of rock or soil that is void of solid material.
Primary Recovery
The production of oil from a reservoir into the well under natural occurrences. Oil flows from a reservoir into the well under natural conditions (the first phase in oil production).
Primary Term
The initial period in an oil and gas lease to develop the property.
Pugh Clause
If part of the leased premises is included in a pooled unit or units, then, at the end of the primary term, only the land that is included in a pooled unit or units shall continue to be held by the lease. The balance of the acreage shall revert to the mineral owner.
Purchaser
The company with the contractual right to purchase one or more products from a producing well.
Producing Gas-Oil Ratio
A ratio derived from the cubic foot measure of natural gas produced by a well relative to each barrel of oil produced.
Production Casing
The last section of casing to be set in a well, the production casing is the smallest diameter and longest string of tubulars to be installed.
Prospect
The hypothetical location of naturally occurring, commercially exploitable oil and gas at a clearly defined underground location.
Proved Reserves (Crude Oil Natural Gas or Coal)
The estimated quantities of all crude oil, natural gas or coal which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs or seams under existing economic and operating conditions.
Recorded Date
The date when an instrument is recorded by a county clerk.
Refinery
An installation that manufactures finished petroleum products from crude oil, unfinished oils, natural gas liquids, other hydrocarbons and alcohol.
Reseller
A firm (other than a refiner) that carries on the trade or business of purchasing refined petroleum products and reselling them to purchasers other than ultimate consumers.
Reserves
An economically recoverable quantity of crude oil or gas.
Reserves (Oil Gas or Coal)
Recoverable, unproduced resources contained in a given formation. Reserves are categorized as developed or undeveloped, and as proved, unproved, probable or possible.
Reservoir
A subsurface deposit of gas, oil or condensate, typically contained in a porous rock formation of limestone, dolomite or sandstone.
Royalty and Royalty Interest
A specified percentage of the oil and gas produced at a property to which the royalty owner is entitled without bearing an investment in exploration or the costs of such production. The ownership of a “royalty interest” entitles the owner to receive royalty payments.
Secondary Recovery
The second phase of oil production. Involves activities to waterflood or re-pressurize the reservoir to recover more of the remaining oil. (Additional phases include primary recovery and tertiary recovery).
Seismic
Petroleum exploration methodologies that use seismic surveying and related analysis to identify petroleum traps in sub-surface formations.
Seismic Surveying
The recording of echoes reflected to the surface from pulses of sound sent down into the earth. Used to determine underground geological structures.
Severance Tax
A tax due the state on oil or gas produced or “severed” from the earth.
Shot Hole
Drilling through surface sediments to form a shallow hole in hard sedimentary rocks creates a shot hole, in which explosives can be detonated as part of a related seismic survey.
Shut In
An oil or gas well that is inactive.
Spot Price
The price for a one-time market transaction for immediate delivery to the specific location where the commodity is purchased “on the spot,” at current market rates.
Stratigraphic Column
Shows the vertical composition of successive strata, or rock layers, in a given formation.
Stripper Oil Well
A well that produces no more than 10 barrels of oil per day, making it barely profitable.
Structural Map
A contour map detailing elevations of sub-surface rock layers, calibrated either in linear measure of feet or meters, or in time measure based on seismic surveys.
Take-or-Pay Contract
An agreement, generally long-term, whereby a gas purchaser (such as a pipeline transmission company) agrees to purchase a minimum annual amount of gas from the producer or pays the producer for the minimum amount, even if no gas is physically transferred.
Tank Farm
An installation used by gathering and trunk pipeline companies, crude oil producers and terminal operators to store crude oil.
Tar Sands (Oil Sands)
Sands that contain bitumen, which is a tar-like crude oil substance that can be processed and refined into a synthetic light crude oil. Typically, tar sands are mined from vast open pits where deposits are softened with blasts of steam. The Athabasca sands in Alberta, Canada and the Orinoco sands in Venezuela contain vast amounts of tar sands. The Athabasca sands are now producing commercially in high volume.
Tertiary Recovery
Methods used to increase production from oil fields. Tertiary methods may include the injection of CO2, steam injection, or the use of special chemicals. Often, such methods are used in existing fields where production has started to decline under normal production. Other recovery stages are defined as “primary” which is a field that flows normally with little additional effort, and “secondary” which often involves waterflooding.
Time Slice
A flat section generated from a 3-D seismic survey, establishing the relative position of various seismic reflectors at a specific time.
Time to Depth Conversion
A translation process to recalibrate seismic records from time measures in millisecond units to linear measures of depth in feet or meters.
Tracts
Descriptions of a parcel(s) of land.
True Vertical Depth (TVD)
The depth of a given point in a well when measured straight down from horizontal, disregarding inclination of the borehole.
Ultimate Oil Recovery
The total amount of oil that can be recovered from a reservoir using primary, secondary (including waterflood) and tertiary enhanced recovery techniques.
Unleased Mineral Interest
A mineral interest not subject to an oil lease.
Upstream
The segment of the oil and gas exploration and production business involved in the initial phases of production (i.e., finding a prospect, drilling, producing and maintaining the well). Upstream is the opposite of downstream.
Volume and Page
A reference to the location of recorded instruments in a courthouse.
Waterflood
Techniques that involve the injection of water into an underproducing or depleted reservoir in order to move oil toward producing wells.
Well
A hole drilled or bored into the earth to obtain water, petroleum, natural gas, brine, or sulfur.
Well Head
The point at which the crude oil (and/or natural gas) exits the ground. Following historical precedent, the volume and price for crude oil production are labeled as wellhead, even though the cost and volume are now generally measured at the lease boundary. In the context of domestic crude price data, the term wellhead is the generic term used to reference the production site or lease property.
Well Log
An individual or composite record of survey activity relating to a given well.
Well Servicing Unit
Truck-mounted equipment generally used for downhole services after a well is drilled. Services include well completions and recompletions, maintenance, repairs, workovers and well plugging and abandonments. Jobs range from minor operations, such as pulling the rods and rod pumps out of an oil well, to major workovers, such as milling out and repairing collapsed casing. Well depth and characteristics determine the type of equipment used.
Well Stimulation
Methods, such as hydraulic fracturing, which increase permeability of a reservoir and increase flow to producing wells.
Wildcat
An exploration well, usually drilled to a reservoir from which no oil or gas has been produced previously.
Working Interest
Interest(s) in a well which bears the drilling and operating expenses.
