Oil & Gas Glossary : Back to Resources
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from the following oil and gas and related investment terms for
crude - Oil produced
mainly in Kansas, Oklahoma, and North Texas. ^ top...
or Middle distillates - Refinery products in the middle
of the distillation range of crude oil, including kerosene, kerosene-based
jet fuel, home heating fuel, range oil, stove oil and diesel fuel. ^ top...
Migration - The movement of oil and gas through layers of rock
deep in the earth. ^ top...
Milling - Cutting
a "window" in
a well's casing with a tool lowered
into the hole on the drillstring. ^ top...
Rights - The ownership of all rights to gas, oil, or other
minerals as they naturally occur in place, at or below the surface
of a tract of land. ^ top...
Million cubic feet - The cubic foot is a standard unit
of measure for quantities of gas at atmospheric pressure. ^ top...
Monocline - A geologic formation in which all the strata are inclined
in the same direction. ^ top...
Mud - A fluid mixture of clay, chemicals, and weighting materials
suspended in fresh water, salt water, or diesel oil. ^ top...
engineer - A technician responsible for proper maintenance
of the mud system. ^ top...
logger - A technician who uses chemical analysis, microscopic
examination of the cuttings, and an assortment of electronic instruments
to monitor the mud system for possible indications of hydrocarbons
(shows). ^ top...
completion - Completion of a well in more than one producing
formation. The tubing of each production zone extends up to the
Christmas tree to be piped to separate tankage. ^ top...
Natural gas -
A mixture of hydrocarbon compounds and small amounts of various
nonhydrocarbons (such as
carbon dioxide, helium, hydrogen
sulfide, and nitrogen) existing in the gaseous phase or in solution
with crude oil in natural
underground reservoirs. ^ top...
petroleum reserves - Areas containing proven oil reserves
that were set aside for national defense purposes by Congress in
1923 (located in Elk Hills and Buena Vista, California; Teapot Dome,
Wyoming; and on the North Slope in Alaska). ^ top...
profits interest - A share of gross production from a property
that is carved out of a working interest, and is figured as a function
of net profits from operation of the property. ^ top...
Revenue Interest (NRI) - The percentage of revenues due an
interest holder in a property, net of royalties or other burdens
on the property. A landowner leases his mineral rights to an oilman.
The landowner retains a royalty of 1/8 (=12.5%); his net revenue
interest is 12.5%. The oilman's net revenue interest would be 87.5%
(=100% - 12.5%). ^ top...
(natural gas liquids) - Portions of natural gas that are liquefied
at the surface in lease separators, field facilities, or gas processing
plants, leaving dry natural gas. They include, but are not limited
to, ethane, propane, butane, natural gasoline, and condensate. ^ top...
(outer continental shelf) - A gently sloping underwater plain
that extends seaward from the coast. ^ top...
Octane - An hydrocarbon of the paraffin series. It is liquid at
ordinary atmospheric conditions, although small amounts may be present
in the gas associated with petroleum. ^ top...
number - A performance rating used to classify motor fuels
by grading the relative antiknock properties of various gasolines.
A high-octane fuel has better antiknock properties than one with
a low number. ^ top...
memorandum - A legal document provided to potential investors
in a venture describing the terms under which the investment is
being offered. ^ top...
well - A well drilled near the discovery well. Also a well
drilled to prevent oil and gas from draining from one tract of land
to another where a well is being drilled or is already producing. ^ top...
platform - A fixed structure from which wells are drilled
offshore for the production of oil and natural gas. ^ top...
column - The vertical height (thickness) of an oil accumulation
above the oil-water contact. ^ top...
gravity - The density of liquid hydrocarbons, generally measured
in degrees. ^ top...
in place - The crude oil estimated to exist in a field or a
reservoir. Oil in the formation not yet produced. ^ top...
pool - An underground reservoir containing oil. An oil field
may contain one or more pools, each of which has its own pressure
system. ^ top...
rig - A drilling rig that drills for oil and gas. ^ top...
run - 1. The production of oil during a specified period of
time. 2. A tank of oil gauged, tested, and put on a pipeline. ^ top...
shale - A fine-grained, sedimentary rock that contains kerogen,
a partially formed oil. Kerogen can be extracted by heating the
shale, but at a very high cost. ^ top...
services - Described as service companies that do work
in and for the oilfield. These services may include: cementing,
perforating, trucking, logging, etc. ^ top...
pump - A phrase used in reference to a well that no longer
flows from natural reservoir energy by is produced by means of a
pump. ^ top...
(Organization of Petroleum Exporting Countries) - An international
oil cartel originally formed in 1960 and including in 1983: Saudi
Arabia, Kuwait, Iran, Iraq, Venezuela, Quatar, Libya, Indonesia,
United Arab Emirates, Algeria, Nigeria, Ecuador, and Gabon. ^ top...
Operator - The individual or company responsible for the drilling,
completion and production operations of a well, and the physical
maintenance of the leased property. ^ top...
costs - Direct costs incurred in the creation of a
new business organization such as an oil and gas limited partnership. ^ top...
Outcrop - A portion of bedrock or other stratum protruding through
the soil level, indicating a fault or some other oil-bearing formation. ^ top...
Royalty (ORRI) - A revenue interest in oil and gas,
created out of a working interest. Like the lessor's royalty, it
entitles the owner to a share of the proceeds from gross production,
free of any operating or production costs. ^ top...
belt - A geological system of faults and basins in
which geologic forces have
thrust layers of older rock above strata of
newer rock that might contain oil
or natural gas. The Eastern
Overthrust Belt runs from eastern Canada through Appalachia into
Western Overthrust Belt runs from
Alaska through western Canada
and the Rocky Mountains into Central America. ^ top...
Packer - A flexible rubber sleeve that is part of a special joint
of pipe. ^ top...
zones - The term to describe the reservoir that is producing
oil and gas within a given wellbore. Pay zones (or oil reservoirs)
can vary in thickness from one foot to several hundred feet. ^ top...
Payoff - The time when a well's production begins to bring in revenues. ^ top...
Payout - The amount of time it takes to recover the capital investment
made on a well or drilling program. ^ top...
gun - An instrument lowered at the end of a wireline
into a cased well. It contains explosive charges that can be electronically
detonated from the surface. ^ top...
Perforation - A method of making holes through the casing opposite
the producing formation to allow the oil or gas to flow into the
well. See the Gun perforation. ^ top...
Permeability - A measure of the ease with which a fluid such as
water or oil moves through a rock when the pores are connected.
Geologists express permeability in a unit named the darcy, but oilmen
use the millidarcy because most of the rocks they come in contact
with are not very permeable. ^ top...
Petrochemicals - Chemicals derived from crude oil or natural gas,
including ammonia, carbon black, and other organic chemicals. ^ top...
Petroleum - Strictly speaking, crude oil. Also used to refer to
all hydrocarbons, including oil, natural gas, natural gas liquids,
and related products. ^ top...
engineer - A term including three areas of specialization:
1) Drilling engineers specialize in the drilling, workover, and
completion operations, 2) Production engineers specialize in studying
a well's characteristics and using various chemical and mechanical
procedures to maximize the recovery from the well, 3) Reservoir
engineers design and execute the planned development of a reservoir.
Many U.S. universities offer BS, MS, and Ph.D. degrees in petroleum
engineering. ^ top...
geologist - A geologist who specializes in the exploration
for, and production of, petroleum. ^ top...
out - The disappearance of a porous, permeable formation
between two layers of impervious rock over a horizontal distance. ^ top...
Pipeline - A tube or system of tubes used for the transportation
of oil or gas. Types of oil pipelines include: lead lines, form
pumping well to a storage tank; flow lines, from flowing well to
a storage tank; lease lines, extending from the wells to lease tanks;
gathering lines, extending from lease tanks to a central accumulation
point; feeder lines, extending from leases to trunk lines; and trunk
lines, extending from a producing area to refineries or terminals. ^ top...
gas - Gas under enough pressure to enter the high-pressure
gas lines of a purchaser; gas in which enough liquid hydrocarbons
have been removed so that such liquids will not condense in the
transmission lines. ^ top...
back - To block off the lower section of the borehole by setting
a plug, in order to perform operations in the upper part of the
hole. ^ top...
Plugged & Abandoned (P&A)
- This expression refers to setting
cement plugs in an unsuccessful well (a dry hole) or a depleted
well. ^ top...
a well - Filling the borehole of an abandoned well with
mud and cement to prevent the flow of water or oil from one strata
to another or to the surface. ^ top...
Pool - 1) (noun) An underground reservoir containing or appearing
to contain a common accumulation of oil and natural gas. A zone
of a structure which is completely separated from any other zone
in the same structure is a pool. 2) (verb) To combine two or more
tracts of land into one unit for drilling purposes. This may be
accomplished voluntarily, or through compulsion. ^ top...
Pooling - A
term frequently used interchangeably with "Unitization" but
more properly used to denominate
the bringing together of small
tracts sufficient for the granting of a well permit under applicable
spacing rules. ^ top...
Porosity - A measure of the number and size of the spaces between
each particle in a rock. Porosity affects the amount of liquid and
gases, such as natural gas and crude oil, that a given reservoir
can contain. ^ top...
reserves - Areas in which production of crude oil is presumed
possible owing to geological inference of a strongly speculative
nature. ^ top...
net value - The present value of the dollars (income, or
stream of income) to be received at some specified time in the future,
discounted back to the present at a specified interest rate. ^ top...
recovery - Production in which oil moves from the reservoir,
into the wellbore, under naturally occurring reservoir pressure. ^ top...
term - The basic period of time during which a lease is
in effect. ^ top...
Placement Offering - A securities (investment) offering
not intended for the general public. By meeting certain criteria,
such an offering may qualify for exemptions from registration with
the Securities and Exchange Commission of the Federal government. ^ top...
reserves - Areas which are unproven but presumed capable
of production because of geological inference, for instance, proximity
to proven reserves in the same reservoir. ^ top...
horizon - Where the well is actually produced, since
it may be drilled to a greater depth. ^ top...
platform - An offshore structure with a platform raised
above the water to support a number of producing wells. ^ top...
Production - A term commonly used to describe taking natural resources
out of the ground. ^ top...
test - A test made to determine the daily rate of oil,
gas, and water production from a potential pay zone. ^ top...
Proppants - Materials used in hydraulic fracturing for holding
open the cracks made in the formation by the fracturing process.
Proppants may consist of sand grains, beads, or other small pellets
suspended in fracturing fluid. ^ top...
Prospect - A lease or group of leases on which an operator intends
to drill. ^ top...
behind-pipe reserves - Estimates of the amount of crude
oil or natural gas recoverable by recompleting existing wells. ^ top...
developed reserves - Estimates of what is recoverable from
existing wells with existing facilities from open, producing payzones. ^ top...
reserves - Estimates of the amount of oil or natural gas
believed to be recoverable from known reservoirs under existing
economic and operating conditions. ^ top...
undeveloped reserves - Estimates of what is recoverable
through new wells on undrilled acreage, deepening existing wells,
or secondary recovery methods. ^ top...
lands - Any land or land interest owned by the federal government
within the 50 states, not including offshore federal lands or lands
held in trust for Native American groups. ^ top...
Offering - A securities (investment) offering intended for
sale to the general public. It must be register with 1) the Securities
and Exchange Commission of the Federal government and 2) the securities-regulating
agencies of the various states in which it will be offered. ^ top...
Pump - A device that is installed inside or on a production string
(tubing) that lifts liquids to the surface. ^ top...
off - To pump a well so rapidly that the oil level falls below
the pump's standing valve, rendering the well temporarily dry. ^ top...
well - A well that does not flow naturally and requires
a pump to bring product to the surface. ^ top...