Oil & Gas Glossary : Back to Resources
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from the following oil and gas and related investment terms for
Quad - One Quadrillion (1,000,000,000,000,000) Btus ^ top...
deed - A document by which one party (grantor) conveys
title to a property, by giving up any claim which he may have to
title (although he does not profess that claim is necessarily valid). ^ top...
R&D - Research
and development. ^ top...
Ram - A closure mechanism on a blowout-preventer stack. ^ top...
Re-entry - A well was abandoned, but subsequent drilling and production
in the area suggests that a potential pay zone in the well was missed
or passed over. ^ top...
Reamer - A tool used to enlarge or straighten a borehole. ^ top...
Reclamation - The restoration of land to its original condition
by regrading contours and replanting after the land has been mined,
drilled, or otherwise has undergone alteration from its original
state. ^ top...
resources - An estimate of resources, including oil
and/or natural gas, both proved and undiscovered, that would be
economically extractable under specified price-cost relationships
and technological conditions. ^ top...
Reef - A buildup of limestone formed by skeletal remains of marine
organisms. It often makes an excellent reservoir for petroleum. ^ top...
Refiner - A person or company that has any part in the control
or management of any operation by which the physical or chemical
characteristics of petroleum or petroleum products are changed. ^ top...
Refining - Manufacturing petroleum products by a series of processes
that separate crude oil into its major components and blend or convert
these components into a wide range of finished products, such as
gasoline or jet fuel. ^ top...
well - A well drilled in a high-pressure formation to control
a blowout. ^ top...
Reserve - That portion of the identified resource from which a
usable mineral and energy commodity can be economically and legally
extracted at the time of determination. ^ top...
(pool) - A porous and permeable underground formation of
producible oil and/or natural gas, confined by impermeable rock
or water barriers, and characterized by a single natural pressure
system. ^ top...
A porous, permeable sedimentary rock formation containing quantities
of oil and/or gas enclosed or
surrounded by layers of
less permeable or impervious rock.
Also called a "horizon." ^ top...
pressure - The pressure at the face of the producing
formation when the well is shut-in. It equals the shut in pressure
at the wellhead plus the weight of the column of oil in the hole. ^ top...
Interest - A fractional interest reserved by the owner
of a whole interest when the balance of the whole interest is transferred
to another party. ^ top...
interest - An interest in a well or property that
becomes effective at a specified time in the future or on the occurrence
of a specified future event. ^ top...
Risk - The possibility of loss or injury. A level of uncertainty
is associated with the various possible outcomes of the undertaking.
Risk usually refers to a numerical estimate of the likelihood of
the occurrence to these various possible outcomes. ^ top...
rock - A layer of impervious rock above a porous and permeable
formation that contains oil or gas. ^ top...
drilling - A method of well-drilling that employs a rotating
bit and drilling mud to cut through rock formations. ^ top...
Roughnecks - Members of the drilling crew. ^ top...
trip - Pulling the drillpipe from the hole to change the
bit, then running the drillpipe and new bit back in the hole. ^ top...
Roustabout - A semi-skilled hand who looks after producing wells
and production facilities. ^ top...
Royalty - A payment to a landowner or mineral rights owner by a
leaseholder on each unit of resources produced. ^ top...
Funds - Generally speaking, a royalty fund is when royalty interests
are being bought, sold and held by the
In nearly all leasing situations,
once a lease has been developed,
it provides a revenue stream. A portion of the revenue stream
set aside for royalty which generally
amounts to 12.5% and overriding
royalty &/or carried working
interest of 2-5%. In a royalty
fund the objective of the fund is to generate it's revenue from
royalties that are held from different
producing fields throughout the
country. The main feature to owning
a percentage of a royalty
fund is that with an oil royalty
the royalty owner (or interest
owner) pays no percentage of operating or developmental costs
with the production of the oil
or gas. Royalty programs generally
offer a low risk factor along with a relatively low return. However,
their main feature is that these
types of programs last for many many
years. ^ top...
ticket - A record of the oil run from a lease tank into a connecting
pipeline. An invoice for oil delivered. ^ top...
the tools - Putting the drillpipe, with the bit attached,
into the hole in preparation for drilling. ^ top...
dome - A subsurface mound or dome of salt. ^ top...
storage - Storage of petroleum products in underground
formations of salt whose cavities have been mined or leached out
with superheated water. ^ top...
Sample - Cuttings of a rock formation broken up by the drill bit
and brought to the surface by the drilling mud. These are examined
by geologists to identify the formation and type of rock being drilled. ^ top...
log - A record of rock cuttings made as a well is being
drilled. A record is then kept that shows the characteristics of
the various strata drilled through. ^ top...
Sandstone - Rock composed mainly of sand-sized particles or fragments
of the mineral quartz. ^ top...
1. The extent to which the pore space in a formation contains
hydrocarbons or connate water. 2. The extent to which gas
is dissolved in the liquid hydrocarbons
in a formation. Schlumberger (pronounced "slumber-jay")
- The founder of electrical well logging, now
the name for any electrical well
log. ^ top...
Scout - An individual who observes
and reports on competitor's leasing and drilling activities. ^ top...
recovery - The introduction of water or gas into a well
to supplement the natural reservoir drive and force additional oil
to the producing wells. ^ top...
Section - A square tract of land having an area of one square mile
(=640 acres). There are 36 sections in a township. ^ top...
Securities - Securities are commonly thought of as stocks and bonds.
As defined by the Securities Act of 1933, however, securities include
any certificate of interest or participation in any profit sharing
agreement, investment contract, or fractional undivided interest
in oil, gas, or other mineral rights. ^ top...
Act of 1933 - Establishes requirements for the disclosure
of information for any interstate offering and sale of securities. ^ top...
Exchange Act of 1934 - Established the Securities and
Exchange Commission which regulates the activities of securities
markets. ^ top...
basin - A large land area composed of unmetamorphized
sediments. Oil and gas commonly occur in such formations. ^ top...
rock - Rock formed by the deposition of sediment, usually in a
marine environment. ^ top...
exploration - A method of prospecting for oil or gas by
sending shock waves into the earth. Different rocks transmit, reflect,
or refract sound waves at different speeds, so when vibrations at
the surface send sound waves into the earth in all directions, they
reflect to the surface at a distance and angle from the sound source
that indicates the depth of the interface. These reflections are
recorded and analyzed to map underground formations. ^ top...
Seismograph - A device that records natural
or manmade vibrations from the earth. Geologists read what it
has recorded to evaluate
the oil potential of underground
formations. ^ top...
Expenses - Expenses incurred
in marketing interests in securities and commonly paid out of
capital investment. ^ top...
Separator - A pressure vessel used to separate
well fluids into gases and liquids. ^ top...
well - A well drilled in a known
oil or natural gas field to inject
liquids that enhance recovery or dispose of salt water. ^ top...
casing - To cement casing in
the well hole, usually in preparation for producing a commercial
well. ^ top...
Severance - The owner of all rights to
a tract of land can sever the rights to his land (vertically or
horizontally). In horizontal
severance, for example, if he chooses
to sell all or part of the mineral
rights, two distinct estates are created: the surface rights
to the tract of land and the mineral
rights to the same tract. The
two estates may change hands independently of each other. ^ top...
tax - Tax paid to the state government
by producers of oil or gas in the state. ^ top...
Shale - A type of rock composed of
common clay or mud. ^ top...
oil - The substance produced
from the treatment of kerogen, that hydrocarbon found in some
shales, which is difficult and costly
to extract. About 34 gallons of
shale oil can be extracted from
one ton of ore. ^ top...
shaker - A vibrating screen or
sieve that strains cuttings out of the mud before the mud is pumped
back down into the borehole. ^ top...
arrangement - An arrangement
whereby a party contributes to the acquisition, or exploration
and development, of an oil and
gas property, and receives as compensation,
a fractional interest in that
property. ^ top...
sands - Narrow strands of saturated formation that
have retained the shape of the stream
bed that formed them. In the
United States, such a formation is located in Kansas. ^ top...
a well - A technique that stimulates production of
a tight formation by setting off charges downhole that crack
The early wells were shot with
nitroglycerin; then dynamite
was used. The nitro man has been replaced today by acidizers
trucks. ^ top...
Show - An indication of oil or gas observed and recorded during
the drilling of a well. ^ top...
well/shut-in well - A well is shut down when initial
drilling ceases for one reason or another. A well is shut in when
the wellhead valves are closed, shutting off production, often while
waiting for transportation or for the market to improve. ^ top...
Shut-in -To stop a producing oil and gas well from producing. ^ top...
pressure -The pressure at the wellhead when valves are
closed. ^ top...
Royalty - A special type of royalty negotiated in the leasing
of a property. ^ top...
track - When fishing operations have been unable to recover
an object in the hole that prevents drilling ahead, the borehole
can often be drilled around the obstacle in the original hole. ^ top...
the rig - Moving a derrick from one location to another
on skids and rollers. ^ top...
gas - Natural gas that is dissolved in the crude oil in
a reservoir. ^ top...
Crude or Gas - Oil or natural gas containing sulfur compounds,
notably hydrogen sulfide a poisonous gas. ^ top...
rock - Sedimentary rock, usually shale containing organic
carbon in concentrations as high as 5-10% by weight. ^ top...
unit - The size (amount of surface area) of a parcel of
land on which only one producing well is permitted to be drilled
to a specific reservoir. ^ top...
market - A short-term contract (typically 30 days) for the
sale or purchase of a specified quantity of oil or gas at a specified
price. ^ top...
Spud - To spud a well means to start the initial drilling operations. ^ top...
Squeeze - The procedure of pumping a slurry of cement into a particular
space in the borehole (often the annulus between the borehole and
the casing), so that the cement will solidify to form a seal. ^ top...
reef - Refers to the artificial reefs formed by the substructures
of offshore drilling and production platforms which are inhabited
by a rich variety of marine life. ^ top...
well - A well drilled near a proven well, but located
in an unproven area, that determines the boundaries of the producing
formation. ^ top...
oil well - An oil well capable of producing no more than
10 barrels of oil per day. ^ top...
barrel - A barrel of oil at the earth's surface. ^ top...
test - A hole drilled to gather information about
rock strata in an area. ^ top...
trap - A porous section of rock surrounded by nonporous
layers, holding oil or gas. They are usually very difficult to locate,
although oilmen believe that most of the oil yet to be discovered
will be found in these traps. ^ top...
trap - A reservoir created by some cataclysmic geologic
event that creates a barrier and prevents further migration. The
most common structural traps are anticlines, in which at lease 80
percent of the world's oil and gas have been discovered. ^ top...
Structure - Subsurface folds or fractures of strata that form a
reservoir capable of holding oil or gas. ^ top...
drilling barge - A vessel capable of drilling in deep
water. The hull is flooded to sink the barge beneath the water level,
and a drilling platform is jacked up above the surface. ^ top...
pump - A bottom-hole pump for use in an oil well when
a large volume of fluid is to be lifted. ^ top...
Subscription - The manner by which an investor participates in
a limited partnership through investment. ^ top...
Substructure - A platform upon which a derrick is erected. ^ top...
fee - Analogous to a management fee in an oil and gas
limited partnership, it is paid by the partnership to the general
partner for direct supervision of mechanical operations at the well
site. ^ top...
rights - Surface ownership of a tract of land from which
the mineral rights have been severed. ^ top...
Swab -A hollow rubber cylinder with a flap (check valve) on the
bottom surface. It is lowered below the fluid level in the well.
This opens the check valve allowing fluid into the cylinder. The
check valve flap closes as the swab is pulled back up, lifting oil
to the surface. ^ top...
crude - Crude oil with low sulfur content which is less corrosive,
burns cleaner, and requires less processing to yield valuable products. ^ top...
A downfold in stratified rock that looks like an upright bowl.
Unfavorable to the accumulation of oil and gas. ^ top...
expenses - Expenditures incurred by a partnership in
connection with issuing and marketing
its interests to investors: legal fees of the issuer for securities
and tax advice, accounting
fees for audits and other representations
included in the offering memorandum. ^ top...
Fuels produced through chemical conversions of natural hydrocarbon
substances such as coal and oil shale. ^ top...
crude oil (syncrude) - A crude oil derived from processing
carbonaceous material such as shale
oil or unrefined oil in coal conversion processes. ^ top...
gas - Gas produced from solid hydrocarbons such as coal,
oil shale, or tar sands. ^ top...