Oil, Gas and Petroleum Prospecting Term Glossary

Acre-Feet - Unit of volume; one acre of producing formation one foot thick. One acre foot equals 7,758 barrels, 325,829 gallons or 43,560 cubic feet.

Bbl. - One stock tank barrel, or 42 U.S. gallons liquid volume, used herein in reference to crude oil or other liquid hydrocarbons.

Bcf. - Billion cubic feet of natural gas.

Bcfe. - Billion cubic feet of natural gas equivalent.

BOPD - The abbreviation for barrels of oil per day.

BTU, British Thermal Unit(s) - The amount of heat required to raise the temperature of one pound of water one degree Fahrenheit under standard conditions of pressure and temperature.

Casing - Pipe cemented in the well to seal off formation fluids or keep the hole from caving in.

Christmas Tree - The system of pipes, valves, gauges and related equipment that is located on the well at ground level and that controls the flow of gas and other petroleum products produced from the well.

Commingled Well - A well producing from two or more formations through common well casing and a single tubing string.

Developed Acreage - The number of acres which are allocated or assignable to producing wells or wells capable of production.

Development Well - A well drilled to a known producing formation in a previously discovered field.

Discovery Well - The first oil or gas well drilled in a new field. The discovery well is the well that is drilled to reveal the actual presence of a petroleum-bearing reservoir, Subsequent wells are development wells.

Disposal Well - Well used for disposal of saltwater into an underground formation.

Downdip Wells - Wells producing from deeper depths lower on a structure than updip wells.

Dry Hole - Dry Well. A well found to be incapable of producing either oil or gas in sufficient quantities to justify completion as an oil or gas well.

Exploratory Well - Any well drilled for the purpose of securing geological or geophysical information to be used in the exploration or development of oil, gas, geothermal, or other mineral resources, except coal and uranium, and includes what is commonly referred to in the industry as "slim hole tests," "core hole tests," or "seismic holes".

Finding Costs - The capital costs associated with finding and developing oil and gas reserves.

Formation - An identifiable single geologic horizon.

Frac - High pressure or explosive method of fracturing rock formations

Fracture stimulation - Action taken to increase the inherent productivity of a prospective formation through the hydraulic injection of water, diesel, or CO2 at high pressures and high rates.

Gross Acres or Gross Wells - The total acres or wells, as the case may be, in which a working interest is owned.

Horizontal Wells - Wells which are drilled at angles greater than 70 from vertical.

Increased Density - A well drilled in addition to the number of wells permitted under normal spacing regulations to accelerate recovery or prevent loss of reserves.

Independent Producer - An energy company, usually in the exploration and production segment of the industry and generally, with no marketing, transportation or refining operations. A non-integrated producing company in the oil industry.

Injection Well - Well used to inject fluids (usually water) into a subsurface formation by pressure.

Lease Operating Expenses (LOE) - The costs of maintaining and operating property and equipment on a producing oil and gas lease.

MBbls - One thousand barrels of oil.

Mcf. - One thousand cubic feet of natural gas.

MMcf. - One million cubic feet of natural gas.

MMcfe. - One million cubic feet of natural gas equivalent, determined using a ratio of 6 Mcf of natural gas to 1 Bbl of crude oil condensate or natural gas liquids.

Mud - Drilling fluid used to lubricate the drill string, line, the walls of the well, flush cutting to the surface and create enough weight to prevent blowouts.

Net Acres or Net Wells - The sum of the fractional working interest owned in gross acres or gross wells.

Operating Costs - The sum of lease operating costs, production taxes, G&A expenses, and oil and gas depreciation, depletion, and amortization.

Operator - A person, acting for himself or as an agent for others and designated to the Commission as the one who has the primary responsibility for complying with its rules and regulations in any and all acts subject to the jurisdiction of the Commission.

Payzone - The producing formation(s) of a well.

Perforations - Holes through casing and cement into the productive formation.

Permeability - Ability of rock to transmit fluids through pore spaces.

Porosity - Percentage of the rock volume that can be occupied by oil, gas or water.

Present Value - When used with respect to oil and gas reserves, present value is the estimated future gross revenue to be generated from the production of proved reserves, net of estimated production and future development costs, using prices and costs in effect at the determination date, without giving effect to non-property related expenses such as general and administrative expenses, debt service and future income tax expense or to depreciation, depletion and amortization, discounted using an annual discount rate of 10%.

Productive Well - A well that is producing oil or natural gas or that is capable of production.

Proved Developed Reserves - Reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.

Proved Reserves - The estimated quantities of crude oil, natural gas and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.

Proved Undeveloped Location - A site on which a development well can be drilled consistent with spacing rules for purposes of recovering proved undeveloped reserves.

Proved Undeveloped Reserves - Reserves that are expected to be recovered from new wells drilled to a known reservoir(s) on un-drilled acreage or from existing wells where a relatively major expenditure is required for recompletion.

Reserve Life - The term in years required to deplete the company's proved oil and gas reserve base at current production rates.

Royalty Interest - An interest in an oil and gas property entitling the owner to a share of oil or gas production free of costs of production.

Salt Water Disposal Well (SWD) - A well used for the purpose of injecting produced water back into the ground.

Spud Date - Date that drilling begins.

Tcf. - One trillion cubic feet of natural gas.

Tcfe. - One trillion cubic feet of natural gas equivalent.

Undeveloped Acreage - Lease acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and gas regardless of whether such acreage contains proved reserves.

Wildcat Well - A well drilled for the purpose of discovering a new field or reservoir.

Working Interest - The operating interest which gives the owner the right to drill, produce and conduct operating activities on the property and a share of production.

3-D, Three Dimensional Seismic - Advanced method for collecting, processing, and interpreting seismic data in three dimensions. Three-dimensional seismic data are collected from closely spaced lines over an area and the data are processed as a volume. The advantages of three-dimensional seismic methodology include increased resolution (through 3-d migration and deconvolution) as well as improved interpretational tools and data displays (such as closely spaced parallel seismic lines, horizontal time sections).