Associated gasNatural gas produced with crude oil from the same reservoir.
BarrelUnit of measure for oil and petroleum products that is equivalent to 42 U.S. gallons
BlowoutThe uncontrolled flow of gas, oil or other fluids from a well
Blowout preventer (BOP)The equipment installed at the wellhead to control pressures in the annular space between the casing and drill pipe or tubing during drilling, completion, and workover operations. See also Christmas tree.
British thermal unit (BTU)A measure of the heating value of a fuel.
CasingMetal pipe inserted into a wellbore and cemented in place to protect both subsurface formations (such as groundwater) and the wellbore. A surface casing is set first to protect groundwater. The production casing is the last one set. The production tubing (through which hydrocarbons flow to the surface) will be suspended inside the production casing.
Casinghead GasGas produced with oil in oil wells. The gas is taken from the well through the casinghead at the top of the well. (Louisiana Mid-Continent Oil and Gas Association, n.d.)
Christmas treeThe assembly of valves, pipes, and fittings used to control the flow of oil and gas from a well.
Coiled tubingA long, small diameter pipe flexible enough to be stored on and deployed from a large, truck-mounted roll. Used to replace jointed pipe in certain types of drilling, completion, and workover operations.
CompressorAn engine used to increase the pressure of natural gas so that it will flow more easily through a pipeline.
Crude OilLiquid petroleum as it comes out of the ground. Crude oil varies radically in its properties, such as specific gravity and viscosity. (Louisiana Mid-Continent Oil and Gas Association, n.d.)
DepletionAn accrual accounting technique used to allocate the cost of extracting natural resources such as timber, minerals and oil from the earth. Unlike deprecitation and amortization, which mainly describe the deduction of expenses due to the aging of equipment and property, depletion is the actual physical depletion of natural resources by companies. (Investopedia, 2017)
DerrickA tapering tower, usually of open steel framework, used in the drilling of oil and gas wells as support for the equipment lowered into the well. (Louisiana Mid-Continent Oil and Gas Association, n.d.)
Development wella well drilled within the proved area of an oil or gas reservoir to the depth of a stratigraphic horizon known to be productive; a well drilled in a proven field for the purpose of completing the desired spacing pattern of production.
Downholea term used to describe tools, equipment, and instruments used in the wellbore, or conditions or techniques applying to the wellbore.
Downstreamwhen referring to the oil and gas industry, this term indicates the refining and marketing sectors of the industry. More generically, the term can be used to refer to any step further along in the process.
Drill cuttingsThe small pieces of rock created as a drill bit moves through underground formations while drilling.
Dry gasthe volume of gas remaining after all water and natural gas liquids have been removed.
Dry holeany exploratory or development well that does not find commercial quantities of hydrocarbons
E&PExploration and production. The “upstream” sector of the oil and gas industry
Enhanced oil recovery (EOR)refers to a variety of processes to increase the amount of oil removed from a reservoir, typically by injecting a liquid (e.g., water, surfactant) or gas (e.g., nitrogen, carbon dioxide).
Exploratory Wella hole drilled: a) to find and produce oil or gas in an area previously considered unproductive area; b) to find a new reservoir in a known field, i.e., one previously producing oil and gas from another reservoir, or c) to extend the limit of a known oil or as reservoir.
FieldAn area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.
Formation damagethe reduction in permeability in reservoir rock due to the infiltration of drilling or treating fluids into the area adjacent to the wellbore
Fracturing (frac)the application of hydraulic pressure to the reservoir formation to create fractures through which oil or gas may move to the wellbore
Gas-to-Liquids (GTL)the conversion of natural gas to a liquid form so that it can be transported easily. Typically, the liquid is converted back to natural gas prior to consumption
Gravitya standard adopted by the American Petroleum Institute for measuring the density of a liquid. Gravity is expressed in degrees with lower numbers indicating heavier liquids and higher numbers indicating lighter liquids.
Hedgean investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract. (Investopedia, 2017)
Horizontal DrillingA method of drilling where the drill bit is turned in a horizontal direction in an effort to produce hydrocarbons from a number of areas located at the same approximate depth. (Louisiana Mid-Continent Oil and Gas Association, n.d.)
Intangible Drilling Costs (IDC)costs to develop an oil or gas well for the elements that are not a part of the final operating well. Intangible drilling costs (IDCs) include all expenses made by an operator incidental to and necessary in the drilling and preparation of wells for the production of oil and gas, such as survey work, ground clearing, drainage, wages, fuel, repairs, supplies and so on. Broadly speaking, expenditures are classified as IDCs if they have no salvage value. Since IDCs include all real and actual expenses except for the drilling equipment, the word “intangible” is something of a misnomer. (Investopedia, 2017)
Integratedwhen applied to an oil company, it indicates a firm that operates in both the upstream and downstream sectors (from exploration through refining and marketing).
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Leasea legal document conveying the right to drill for oil and gas, or the tract of land on which a lease has been obtained where the producing wells and production equipment are located.
Lifting costs– the cost of producing oil from a well or lease.
Logto conduct a survey inside a borehole to gather information about the subsurface formations; the results of such a survey. Logs typically consist of several curves on a long grid that describe properties within the wellbore or surrounding formations that can be interpreted to provide information about the location of oil, gas, and water. Also called well logs, borehole logs, wireline logs.
Midstreama term sometimes used to refer to those industry activities that fall between exploration and production (upstream) and refining and marketing (downstream). The term is most often applied to pipeline transportation of crude oil and natural gas.
Natural gas liquids (NGL)the portions of gas from a reservoir that are liquefied at the surface in separators, field facilities, or gas processing plants. NGL from gas processing plants is also called liquefied petroleum gas (LPG).
Non-associated gasnatural gas produced from a reservoir that does not contain significant quantities of crude oil.
OCSOuter Continental Shelf, a term used primarily in the U.S. for the offshore areas under federal jurisdiction.
P&A (plugged and abandoned)a depleted well or dry hole that has been (typically) filled with cement and marked, with all surface equipment removed.
Permeabilitya measure of the ability of a rock to transmit fluid through pore spaces.
Permian Basinan oil-and-gas-producing area located in West Texas and the adjoining area of southeastern New Mexico. The Permian Basin covers an area approximately 250 miles wide and 300 miles long and is composed of more than 7,000 fields (best represented in Railroad Commission of Texas production figures as districts 7C, 08, and 8A) in West Texas. Various producing formations such as the Yates, San Andres, Clear Fork, Spraberry, Wolfcamp, Yeso, Bone Spring, Avalon, Canyon, Morrow, Devonian, and Ellenberger are all part of the Permian Basin, with oil and natural gas production depths ranging from a few hundred feet to five miles below the surface. (Railroad Commission of Texas, 2017)
Porositya ratio between the volume of the pore space in reservoir rock and the total bulk volume of the rock. The pore space determines the amount of space available for storage of fluids.
Probable ReservesAn estimate of reserves taking into consideration known geology, previous experience with similar types of reservoirs and seismic data, if available. (Louisiana Mid-Continent Oil and Gas Association, n.d.)
Produced waterthe water extracted from the subsurface with oil and gas. It may include water from the reservoir, water that has been injected into the formation, and any chemicals added during the production/treatment process. Produced water is also called “brine” (and may contain high mineral or salt content) or “formation water.” Some produced water is quite fresh and may be used for livestock watering or irrigation (where allowed by law).
Proven ReservesOil which is still in the ground, but which has been located and determined to be recoverable. (Louisiana Mid-Continent Oil and Gas Association, n.d.)
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RigThe structures and equipment used in drilling an oil and gas well including the derrick, engine, engine house and other equipment. (Louisiana Mid-Continent Oil and Gas Association, n.d.)
Royaltya percentage interest in the value of production from a lease that is retained and paid to the mineral rights owner.
Separationthe process of separating liquid and gas hydrocarbons and water. This is typically accomplished in a pressure vessel at the surface, but newer technologies allow separation to occur in the wellbore under certain conditions.
Shut into close valves on a well so that it stops production, or a well on which the valves have been closed.
Sour crude oiloil containing free sulfur or other sulfur compounds whose total sulfur content is in excess of 1 percent.
Sour gasnatural gas containing hydrogen sulfide
Spacingthe distance between wells producing from the same reservoir. Spacing is often expressed in terms of acres, e.g., 40-acre spacing, and is often established by regulatory agencies.
Spudding InThe first boring of the hole in the drilling of an oil well. (Louisiana Mid-Continent Oil and Gas Association, n.d.)
Stimulationthe term used for several processes to enlarge old channels, or create new ones, in the producing formation of a well designed to enhance production. Examples include acidizing and fracturing
Turnkey costcosts and expenditures that must be covered before a product or service is ready to be sold and used. A turnkey cost may be a direct cost, such as materials, or an indirect cost, such as administrative expenses and product engineering. Turnkey costs are often quoted by manufacturers and real estate developers to describe the costs required to complete a particular project. (Investopedia, 2017)
Underbalanced drillingdrilling under conditions where the pressure being exerted inside the wellbore (from drilling fluids) is less than the pressure of the oil or gas in the formation.
Underground injectionthe placement of gases or fluids into an underground reservoir through a wellbore. May be used as part of enhanced oil recovery or waterflooding processes or for disposal of produced water.
Upstreamthe exploration and production portions of the oil and gas industry.
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Waterfloodingthe injection of water into an oil reservoir to “push” additional oil out of the reservoir rock and into the wellbores of producing wells.
Wellheadthe equipment at the surface of a well-used to control the pressure; the point at which the hydrocarbons and water exit the ground.
Well servicingmaintenance work performed on an oil or gas well to improve or maintain the production.
Wet gasnatural gas containing significant amounts of liquefiable hydrocarbons
Wildcat wella well drilled in an area where no current oil or gas production exists. Also called a “rank wildcat.”
Workoveroperations on a producing well to restore or increase production. A workover may be performed to stimulate the well, remove sand or wax from the wellbore, to mechanically repair the well, or for other reasons.
WTIWest Texas Intermediate, a type of crude oil commonly used as a price benchmark.
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