GLOSSARY OIL GAS
OF THE AND INDUSTRY
ANDCONVERSION FACTORS
'YETUNDE OMOTOSHOADEOLA ADENIKINJU
FISÓYÈ DELAN? Ì
January, 2018
A NN OD I I ATNNOV
$cN
Y Y
Published by
Centre for Petroleum, Energy Economics and LawUniversity of Ibadan, Nigeria
GLOSSARY OIL GAS
OF THE AND INDUSTRY
ANDCONVERSION FACTORS
Copyright © 2018
'YETUNDE OMOTOSHO, ADEOLA ADENIKINJU & FISÓYÈ DELAN? Ì
Published by
ISBN: 978-978 876...
All rights reservedNo part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic or mechanical, including photocopying, recording or otherwise, without permission in writing from the copyright owner.
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Centre for Petroleum, Energy Economics and LawUniversity of Ibadan, Nigeria
Glossary of the Oil and Gas Industry and Conversion Factors
Contents
v
AAbandonment: The act of terminating all operations, plugging wells, removing all surface equipment and restoring the surface to the original condition. Offshore, it would involve platform decommissioning and/or removal…
BBack-In Interest: Form of carried interest in which the latter converts to a regular working interest after payout, that is, after the carrying parties have recouped their costs, the carried party converts to a regular fractional working interest, paying its share of costs and receiving its share of revenues….
CC&F (Cost and Freight) - Cost refers to the cost of goods and freight refers to all other costs relating to all the means of transportation of the goods….
DDayrate: The daily rate paid by an operator to a drilling contractor under a daywork contract. (See also Footage and Turnkey Contract)…
EEconomic Interest: An Economic Interest is possessed in every case in which an investor has acquired any interest in oil and gas in place and secures the revenue derived from the extraction of the oil and gas to which the investor must look for a return of his capital…
FFarm In: When one company drills or performs other activity on another company's lease in order to earn interest in or acquire that lease…
Preface ix
1
4
8
17
23
26
vi
GGamma-Ray Logging: A technique of exploration for oil in which a well's borehole is irradiated with gamma rays. The varying emission of these rays indicates to geologists the relative density of the rock formation at different levels….
HHang The Rods: To pull pump rods out of the well and hang them in the derrick on rod hangers…
IIFC (International Finance Corporation) …
JJack or Unit: An oil-pumping unit. The pumping jack's walking beam provides the up-and-down motion to the well's pump rods…
KKelly Bushing: Part of the drilling rig. The Kelly is a long hollow steel bar that connects to the upper end of the drill string…
LLag Time: The time it takes for cuttings to be carried (circulate) from the bottom of the borehole up to the surface by the mud system…
MMarginal Contingent Resources: Known (discovered) accumulations for which a development project(s) has been evaluated as economic or reasonably expected to become economic but commitment is withheld because of one or more contingencies (e.g., lack of market and/or infrastructure)….
NNatural Bitumen: Natural Bitumen is the portion of petroleum that exists in the semisolid or solid phase in natural deposits. In its natural state, it usually contains sulfur, metals, and other nonhydrocarbons…
30
33
35
37
38
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43
46
vii
OOctane: A hydrocarbon of the paraffin series. It is liquid at ordinary atmospheric conditions, although small amounts may be present in the gas associated with petroleum….
PPacker: A flexible rubber sleeve that is part of a special joint of pipe…
QQuitclaim 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)…
RR & D: Research and Development.
SSales: The quantity of petroleum product delivered at the custody transfer (reference point) with specifications and measurement conditions as defined in the sales contract and/or by regulatory authorities. All recoverable resources are estimated in terms of the product sales quantity measurements…
TTOP (Take or Pay): Take or Pay is a common provision in gas contracts under which, if the Buyer's annual purchased volume is less than his purchase obligation (the Annual Contract Quantity minus any shortfall in the Seller's deliveries, minus any Downward Quantity Tolerance), the Buyer pays for such a shortfall as if the gas had been received…
UUnassociated Gas: Natural Gas that occurs alone, not in solution or as free gas, with oil or condensate. (See Non Associated Gas)…
VVapour Pressure: The pressure exerted by a vapor held in equilibrium with its solid or liquid state…
49
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60
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67
74
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viii
WWall Sticking: A condition in which a section of the drill string becomes stuck on deposits of filter cake on the wall of the borehole on a well…
ZZone: A specific interval of rock strata containing one or more reservoirs. Used interchangeably with “formation”…
Conversion Factors
References
81
84
85
90
Preface
The Centre for Petroleum, Energy Economics and Law (CPEEL) was
established in 2011 through a research grant by John D. and Catherine
T. MacArthur Foundation, as a regional Centre of Excellence, in the
training, research, and publication in energy. It is a multidisciplinary
Centre which brings together diverse energy professionals working in
the areas of energy. It is the first of its kind in Africa.
As part of its contributions to the training and research in energy,
three members of the Centre have jointly produced a Glossary of the Oil
and Gas Industry and Conversion Factors. This is a follow-up to the first
Glossary produced for the electricity supply industry. These two
monographs will be handy materials for students, researchers, industry
practitioners, policy makers and other stakeholders in the energy sector
who are interested in quick reference materials.
I want to thank the authors who have put in significant efforts to
compile the Monographs. Of course, there are still rooms for improvements
and we will be counting on your suggestions and inputs in the future
edition of the publications. I thank Mrs Yetunde Omotosho for leading
the efforts and Engr Fisoye Delano for providing significant inputs to
making the final product in your hands quite befitting. Needless to say,
that the errors and flaws contained in the publication remain the sole
responsibility of the authors.
The Centre will continue to lead the efforts in conducting research
and producing relevant materials to aid training, research and
understanding of the energy sector.
You can visit our website at www.cpeel.org.ng for more information.
Adeola Adenikinju, PhD
Professor and Director
Centre for Petroleum, Energy Economics and Law (CPEEL),
University of Ibadan, Ibadan
Nigeria.
ix
A
Abandonment: The act of terminating all operations, plugging wells,
removing all surface equipment and restoring the surface to the original
condition. Offshore, it would involve platform decommissioning and/or
removal.
Abstract of Title: A chronological history of ownership of a tract of
land.
Accumulation: An individual body of naturally occurring petroleum in
a reservoir.
Acidizing a Well: Increasing the flow of oil from a well by pumping
hydrochloric acid into the well under high pressure. This re-open and
enlarges the pores in the oil-bearing limestone formation.
ACQ (Annual Contract Quantity): The Annual Contract Quantity
(ACQ) is the volume of gas which the Seller must deliver, and the Buyer
must take in a given contract year.
Acre: The most common of land measure. A square 210 feet on a side
(44,100 sq. ft.) would be a bit larger than an acre (43,560 sq. ft.). There
are 640 acres in a square mile.
Acre-Foot: The thickness of a pay zone is measured in feet, and the area
of the reservoir is measured in acres. An acre-foot is a volume of
reservoir rock that is one acre in area and one foot thick.
ADP (Annual Delivery Program): The Annual Delivery Program
(ADP) is a schedule of gas volumes to be delivered on definite dates or
within definite periods in an imminent contract year in a long-term
contract.
1
AFE (Authorization for Expenditure): An estimate of the costs of
drilling and completing a proposed well, which the operator provides to
each working interest owner before the well is commenced.
AG (Associated Gas) is gas which is produced with oil in a primarily oil
field. Associated Gas is found in contact with or dissolved in crude oil in
the reservoir. It can be further categorized as Gas-Cap Gas or Solution
Gas.
Aggregation: The process of summing reservoir (or project) level
estimates of resource quantities to higher levels or combinations such
as field, country, or company totals. Arithmetic: summation of
incremental categories may yield different results from probabilistic
aggregation of distributions.
AIPN: (Association of International Petroleum Negotiators)
Air Drilling: A form of rotary drilling that uses compressed air instead
of mud. Used predominantly in shallow, low pressure areas.
ALARP: (As Low as Reasonably Practicable)
Allowable: The amount of oil and/or gas a well is permitted by the
government regulator to produce. Not all government regulators impose
“allowables”.
Analogous Reservoir: Analogous reservoirs, as used in resources
assessments, have similar rock and fluid properties, reservoir
conditions (depth, temperature, and pressure) and drive mechanisms,
but are typically at a more advanced stage of development than the
reservoir of interest and thus may provide concepts to assist in the
interpretation of more limited data and estimation of recovery.
Anticline: A geological term describing a fold in the earth's surface with
strata sloping downward on both sides from a common crest. Anticlines
frequently have surface manifestations like hills, knobs and ridges. At
least 80 percent of the world's oil and gas has been found in anticlines.
APCI: (Air Products & Chemicals, Inc.)
Annulus, or annular space is the space between a well tubular such as
drill pipe, casing, tubing and whatever surrounds it. For example, the
space between a well's casing and the wall of the borehole or the space
between the surface casing and the inner, producing wellbore casing.
CPEEL2
API gravity = 141.5SG
131.5–
API: American Petroleum Institute (API), a petroleum industry
association that sets standards for oil field equipment and operations.
Approved for Development: All necessary approvals have been
obtained; capital funds have been committed, and implementation of
the development project is underway.
Arbitrage is buying and selling the same commodity in two different
locations or markets to take advantage of variances in price.
Assessment: See Evaluation.
Assignment: The sale, transfer or conveyance of all or a fraction of
ownership interest or rights owned in real estate or other such
property. The term is commonly used in the oil and gas business to
convey working interest, leases, royalty, overriding royalty interests
and net profit interests.
The annulus, or annular space is the space between a well tubular
such as drill pipe, casing, tubing and whatever surrounds it. For
example, the space between a well's casing and the wall of the borehole
or the space between the surface casing and the inner, producing
wellbore casing.
Glossary of the Oil and Gas Industry and Conversion Factors 3
API gravity: Is a measure of how heavy or light a petroleum liquid is
compared to water: if its API gravity is greater than 10, it is lighter and
floats on water; if less than 10, it is heavier and sinks. The formula to
calculate API gravity from Specific Gravity (SG) is:
B
Back-In Interest: Form of carried interest in which the latter converts
to a regular working interest after payout, that is, after the carrying
parties have recouped their costs, the carried party converts to a
regular fractional working interest, paying its share of costs and
receiving its share of revenues.
Barge Rig: A drilling rig that is placed on a towed barge for shallow
inland water, swamp and river applications.
Barrel (BBL): Unit of volume measurement in the petroleum and its
products. 1 barrel= 42 U.S gallons, 158.97 litres. The first 'b' in its
abbreviation (bbl) comes from the early days of the oil industry when
Standard Oil Company painted their uniform size barrels blue.
Barrels Per Day: The customary term of measurement of the rates of
production from a well or oilfield, throughput of pipelines, refineries
and other petroleum facilities. Generally, the reference is to average
number of barrels per calendar day over a specified time, usually a year.
BOPD: Barrels of Oil Per Day.
BOE (Barrels of Oil Equivalent) : See Crude Oil Equivalent.
BOEPD: Barrels of Oil Equivalent Per Day.
BL (Base Load): The proportion of delivery (or demand) below which
send out (or demand) is not estimated to fall during a given period.
B/L (Bill of Lading)is a document issued by a carrier which details a
shipment of merchandise and gives title of that shipment to a specified
party. Bills of lading are one of three important documents used in
international trade to help guarantee that exporters receive payment
and importers receive merchandise.
Basement Rock: Igneous or metamorphic rock lying below
sedimentary formation in the earth's crust. Basement rock does not
contain petroleum deposits.
4
Basin: A depression in the earth's crust in which sedimentary
materials have accumulated. Such a basin may contain oil or gas fields.
Basin-Centered Gas: An unconventional natural gas accumulation that
is regionally pervasive and characterized by low permeability, abnormal
pressure, gas saturated reservoirs, and lack of a downdip water leg.
Battery: A group of at least two storage tanks in an oilfield.
BCF: Billion Cubic Feet. The cubic foot is a standard unit of measure for
gas at atmospheric pressure.
Behind-pipe Reserves: Behind-pipe reserves are expected to be
recovered from zones in existing wells, which will require additional
completion work or future recompletion prior to the start of
production. In all cases, production can be initiated or restored with
relatively low expenditure compared to the cost of drilling a new well.
Best Estimate: With respect to resource categorization, this is
considered to be the best estimate of the quantity that will actually be
recovered from the accumulation by the project. It is the most realistic
assessment of recoverable quantities if only a single result were
reported. If probabilistic methods are used, there should be at least a
50% probability (P50) that the quantities actually recovered will equal
or exceed the best estimate.
BFIT: Before Federal Income Tax
BHP (Bottom Hole Pressure): The pressure of the reservoir or
formation at the bottom of the hole. A decline in pressure indicates
some depletion of the reservoir.
Bitumen: See Natural Bitumen.
Bleeding Core: A core sample of rock so highly permeable and
saturated that oil drips from it.
Blind Pool: Refers to an oil and gas limited partnership which has not
committed to specific prospects, leases or properties at the time of
capital formation.
Block: Any assembly of pulleys on a common framework; in
mechanics, one or more pulleys mounted to rotate on a common axis.
The crown block is an assembly of pulleys mounted on beams at the top
of the derrick or mast. The drilling line is passed through the grooved
Glossary of the Oil and Gas Industry and Conversion Factors 5
wheel on the pulley of the crown block alternately with the pulleys of
the traveling block, which is raised and lowered in the derrick or mast
by the drilling line.
Blowout Insurance: An insurance policy that protects the insured
party (working interest owner) from liabilities which might arise from
a blowout during the drilling, completion or production of a well.
Blowout: A sudden escape of oil or gas from a well, caused by
uncontrolled high pressure. It usually occurs during drilling.
Blue Sky Law: State regulations governing an offering to sell securities
within the state.
BOG (Boil Off Gas)- The small amounts of LNG that boil off from LNG
storage tanks in LNG plant operations and are recovered, or during
transportation. BOG gas on LNG tankers can be used as a fuel to drive
the ships.
Boiler Plate Offer: A term often used to describe a standard company
lease offer. Boiler plate leases generally grant many rights to the
company that an informed landowner would strike out. Some of these
often include royalties paid after expenses are deducted, free storage
and free pipeline right of ways.
Bonus: A monetary incentive given by the company to the mineral
owner for executing or ratifying an oil, gas and mineral lease.The
money paid by the lessee for the execution of an oil and gas lease by the
owner of the mineral rights. In the international industry, it is referred
to as Signature Bonus. Other overseas bonuses paid to the host
government include Discovery Bonus, paid at the time of the first
commercial discovery. Production Bonus, paid at the commencement
of production from the block.
BOP (Blowout Preventer): An assembly of heavy-duty valves
attached to the top of a well casing to control pressure.
BOPM: Barrels of Oil Per Month.
Border Price (BP) is the price at which gas is traded at the border
between two countries.
BOE (Barrels of Oil Equivalent): See Crude Oil Equivalent.
BOEPD: Barrels of Oil Equivalent Per Day.
CPEEL6
Bottom Hole Pressure (BHP): The pressure of the reservoir or
formation at the bottom of the well. Flowing bottom hole pressure and
shut-in bottom hole pressure are measured under flowing and shut-in
conditions respectively. A decline in pressure indicates some depletion
of the reservoir.
Bottom-Hole Pump: A compact, high-volume pump located in the
bottom of a well, not operated by sucker rods or a surface power unit.
Bridle: The cable link between the “horsehead” and the pump on a
pumping unit.
British thermal unit (BTU): A standard measure of heat content in a
fuel. It is the quantity of required to raise 1 pound (453.6g) of water
one-degree Fahrenheit from 58.5 to 59.5 degrees Fahrenheit under
standard pressure of 30 inches of mercury at or near its point of
maximum density. One Btu equals 252 calories, (gram), 778 foot-
pounds, 1,055 joules or 0.293-watt hours.
BS&W (Basic Sediment & Water): Material pumped up with oil and
gas which must be separated out.
Butane: A hydrocarbon associated with petroleum. It is gaseous at
ordinary atmospheric conditions.
Buy Back Agreement: An agreement between a host government and
a contractor under which the host pays the contractor an agreed price
for all volumes of hydrocarbons produced by the contractor. Pricing
mechanisms typically provide the contractor with an opportunity to
recover investment at an agreed level of profit.
B/L (Bill of Lading) is a document issued by a carrier which details a
shipment of merchandise and gives title of that shipment to a specified
party. Bills of lading are one of three important documents used in
international trade to help guarantee that exporters receive payment
and importers receive merchandise.
BL (Base Load): The proportion of delivery (or demand) below which
send out (or demand) is not estimated to fall during a given period.
Glossary of the Oil and Gas Industry and Conversion Factors 7
C
C&F (Cost and Freight) - Cost refers to the cost of goods and freight
refers to all other costs relating to all the means of transportation of the
goods.
C3MR process: The LNG refrigeration process using propane and
mixed refrigerants as the cooling media.
Cantilever Jack-ups: Jack-ups that have the derrick package mounted
on steel arms that can be extended out from the hull of the rig.
Extension allows for the positioning adjacent to a platform rig for
development drilling.
CAOF (Calculated Absolute Open Flow): A figure representing a gas
well's theoretical producing capability per day.
Capital Asset: An asset acquired as an investment, for the purpose of
creating a product or service intended to be used in the activities or
operations of a business.
Capital Costs (Oil & Gas Tax Usage): For Federal Income Tax purposes,
the costs of Capital Expenditures which may be recovered by deduction
against income (through depreciation and depletion).
Capital Expenditure: An expenditure intended to benefit the future
activities of a business, usually by adding to the assets of a business, or
by improving an existing asset.
Capitalize: To treat certain expenditures as Capital Expenditures for
Federal Income Tax computations. To periodically expense capital costs
through Depreciation, Depletion and Amortization (DD&A).
Carried Interest: A carried interest is an agreement under which one
party (the carrying party) agrees to pay for a portion or all of the
8
preproduction costs of another party (the carried party) on a license in
which both own a portion of the working interest.
Cased Hole: A wellbore in which casing has been installed and
cemented.
Casing Pipe: Used in oil wells to reinforce the borehole. Sometimes
several casings are used, one inside the other. The outer casing, called
the “surface pipe”, shuts out water and serves as a foundation for
subsequent drilling.
Casinghead Gas: Natural Gas produced from an oil well, as opposed to
gas produced from a gas well.
Casinghead: The portion of the casing that protrudes above the
surface and to which control valves and flow pipes are attached.
Cavings Rock: Fragments that break off from the walls of a borehole
and fall into the borehole during drilling operations.
CBM (Coal Bed Methane):Natural gas contained in coal deposits. The
gas, mostly methane, may be produced with variable amounts of inert
or even non-inert gases. (Also, termed Coal Seam Gas, CSG, or Natural
Gas from Coal, NGC.)
CCGT (Combined Cycle Gas Turbine): A Combined Cycle Gas Turbine
(CCGT) is a form of electricity generation plant in which the waste heat
produced from combustion of gases is partially captured in the turbine
exhaust and used to generate steam for production of additional electricity,
significantly increasing the efficiency of the electricity generation.
CEB (Clean Energy Building)
Cement (CMT): Fluid cement is mixed at the surface, pumped to the
bottom of a cased well, forced to flow around the lower end of the
casing and up into the space between the casing and the borehole.
When cement solidifies (sets), it holds the casing in place and provides
support.
Cement Squeeze: Forcing cement into the perforations, large cracks
and fissures in the wall of a borehole to seal them off.
Cementing: Filling the space between the casing and the wellbore
walls with cement to support the casing, and seal between zones.
CF (Carry Forward): A provision within a long term Take or Pay
Glossary of the Oil and Gas Industry and Conversion Factors 9
Contract under which a Buyer which takes more than its Annual
Contract Quantity in any year is allowed, under conditions specified in
the contract, to balance this against under taking in following years.
Chance: Chance is 1-Risk. (See Risk.)
Choke: An orifice installed in a pipeline at the well surface to control
the rate of flow.
CHP (Combined Heat and Power): Combined Heat and Power (CHP)
is the use of a single combined system to supply both the heat and
power obligations of a project hence reducing the waste of heat.
CHPS (Casing-Head Petroleum Spirit): An ancillary name for
Condensates.
Christmas Tree: An assembly of valves, gauges and chokes mounted
on a well casinghead to control production and the flow of oil or gas to
the storage tanks or pipelines.
CIF (Cost, Insurance, and Freight) - means the shipper/trader must
pay the cost of shipment up to the ship, insurance cost for the cargo, and
freight cost up to destination port.
Circulate (CIRC): To pump drilling fluid into the borehole through the
drill pipe and back up the annulus.
Circulation, Lost: When the mud does not re-circulate to the surface
because it is disappearing into a thief zone, a highly porous cavity. Such
a zone must be immediately plugged with lost circulation materials
(nutshells, sawdust, newspapers, cellophane, etc.), slurry or a chemical
mix. Otherwise the well is at the mercy of any sudden high-pressure
surge.
Clean Oil: Crude Oil containing less than 1 percent sediment and
water; “pipeline oil”, oil clean enough to send through a pipeline.
CNG (Compressed Natural Gas):CNG is natural gas that is pressurized
and stored at pressures up to 3,600 psig (~250 bar). This process
allows 200 times more gas to be transported. CNG is a fuel which can be
used in place of gasoline (petrol), Diesel fuel and propane/LPG.
CO Injection: A secondary recovery technique in which carbon dioxide 2
(CO2) is injected into wells as part of a miscible recovery program.
COI (Confirmation of Intent).
CPEEL10
Commercial: When a project is commercial, this implies that the
essential social, environmental, and economic conditions are met,
including political, legal, regulatory, and contractual conditions. In
addition, a project is commercial if the degree of commitment is such that
the accumulation is expected to be developed and placed on production
within a reasonable time frame. While 5 years is recommended as a
benchmark, a longer time frame could be applied where, for example,
development of economic projects are deferred at the option of the
producer for, among other things, market-related reasons, or to meet
contractual or strategic objectives. In all cases, the justification for
classification as Reserves should be clearly documented.
Committed Project: Projects status where there is a demonstrated,
firm intention to develop and bring to production. Intention may be
demonstrated with funding/financial plans and declaration of
commerciality based on realistic expectations of regulatory approvals
and reasonable satisfaction of other conditions that would otherwise
prevent the project from being developed and brought to production.
Common Carrier: A person or company in the business of transporting
the public or goods for a fee. In the industry, a person or company
engaged in the movement of petroleum products, like a public utility.
Completed Well: A well made ready to produce Oil or Natural Gas.
Completion involves cleaning out the well, running steel casing and
tubing into the hole, adding permanent surface control equipment and
perforating the casing so oil or gas can flow into the well and be brought
to the surface.
Completion Interval: The specific reservoir interval(s) that is (are)
open to the borehole and connected to the surface facilities for
production or injection, or reservoir intervals open to the wellbore and
each other for injection purposes.
Completion: Completion of a well. The process by which a well is
brought to its final classification— basically dry hole, producer,
injector, or monitor well. A dry hole is normally plugged and
abandoned. A well deemed to be producible of petroleum, or used as an
injector, is completed by establishing a connection between the
Glossary of the Oil and Gas Industry and Conversion Factors 11
reservoir(s) and the surface so that fluids can be produced from, or
injected into, the reservoir. Various methods are utilized to establish
this connection, but they commonly involve the installation of some
combination of borehole equipment, casing and tubing, and surface
injection or production facilities.
Compulsive Integration: After the Department of Environmental
Conservation (DEC) issues a well permit, you will be required to elect
an option for how your “unleased acreage” in the spacing unit will be
integrated with other properties in the unit. Your election will be
finalized by issuance of a compulsory integration order after a public
hearing. This process consolidates control and management of well
operations with the well operator who holds the permit from DEC. If
you have leased your oil and gas rights to someone else, then you are
not required to make an election; your lessee will make the decision if
necessary. You will be offered a choice from the following options:
Integration as a non-participating owner; Integration as a participating
owner; Integration as a royalty owner. Each option presents different
risks and potential rewards. The option you select may subject you to
certain costs and obligations, and there is no guarantee that a well will
make money. You should carefully consider all the implications of your
decision. If no permit is issued, then your acreage will not be affected.
Concession: A grant of access for a defined area and time period that
transfers certain entitlements to produced hydrocarbons from the host
country to an enterprise. The enterprise is generally responsible for
exploration, development, production, and sale of hydrocarbons that
may be discovered. Typically granted under a legislated fiscal system
where the host country collects taxes, fees, and sometimes royalty on
profits earned.
Condensate: A mixture of hydrocarbons (mainly pentanes and heavier)
that exist in the gaseous phase at original temperature and pressure of
the reservoir, but when produced, are in the liquid phase at surface
pressure and temperature conditions. Condensate differs from natural
gas liquids (NGL) in two respects: 1) NGL is extracted and recovered in
gas plants rather than lease separators or other lease facilities; and 2)
CPEEL12
NGL includes very light hydrocarbons (ethane, propane, butanes) as well
as the pentanes-plus that are the main constituents of condensate.
Conditions: The economic, marketing, legal, environmental, social,
and governmental factors forecast to exist and impact the project
during the time period being evaluated (also termed Contingencies).
Conductor Casing or Conductor Pipe: Wide-diameter casing installed
at the surface prior to rigging up to prevent caving.
Confirmation Well: A well drilled to “prove” the formation encountered
by an exploratory well.
Connate Water: The water present in a petroleum reservoir in the
same zone occupied by oil and gas considered by some to be the residue
of the primal sea. Connate Water occurs as a film of water around each
grain of sand in granular reservoir rock and is held in place by capillary
attraction.
Constant Case: Modifier applied to project resources estimates and
associated cash flows when such estimates are based on those
conditions (including costs and product prices) that are fixed at a
defined point in time (or period average) and are applied unchanged
throughout the project life, other than those permitted contractually. In
other words, no inflation or deflation adjustments are made to costs,
product prices, or revenues over the evaluation period.
Contingency: See Conditions.
Contingent Project: Development and production of recoverable
quantities has not been committed due to conditions that may or may not
be fulfilled.
Contingent Resources: Those quantities of petroleum estimated, as of a
given date, to be potentially recoverable from known accumulations by
application of development projects but which are not currently
considered to be commercially recoverable due to one or more
contingencies. Contingent Resources are a class of discovered recoverable
resources.
Continuous-Type Deposit: A petroleum accumulation that is pervasive
throughout a large area and which is not significantly affected by
hydrodynamic or buoyancy influences. Such accumulations are included
Glossary of the Oil and Gas Industry and Conversion Factors 13
in Unconventional Resources. Examples of such deposits include "basin-
centered" gas, shale gas, gas hydrates, natural bitumen and oil shale
accumulations.
Conventional Crude Oil: Crude Oil flowing naturally or capable of
being pumped without further processing or dilution [see Crude Oil
and compare to Synthetic Crude Oil (SCO)].
Conventional Gas: Conventional Gas is a natural gas, trapped by
buoyancy, occurring in a normal porous and permeable reservoir rock,
either in the gaseous phase or dissolved in crude oil, and which
technically can be produced by normal production practices.
Conventional Resources: Conventional resources exist in discrete
petroleum accumulations related to localized geological structural
features and/or stratigraphic conditions, typically with each
accumulation bounded by a downdip contact with an aquifer, and
which is significantly affected by hydrodynamic influences such as
buoyancy of petroleum in water.
Conveyance: The legal process of transferring property from one
owner to another. A written contract between a grantor and grantee,
used to transfer title or rights to property. Typical conveyances include
real estate; oil, gas and mineral leases; assignments; deeds and rights of
way.
Core: Samples of subsurface rocks taken as a well is being drilled. The
core allows geologists to examine the strata in proper sequence and
thickness.
Correlative Rights: Means that each owner and producer in a common
pool or source of supply of oil and gas shall have an equal opportunity
to obtain and produce his just and equitable share of the oil and gas
underlying such pool or source of supply.
Cost and Freight (C&F)
Cost Recovery: Under a typical production-sharing agreement, the
contractor is responsible for the field development and all exploration
and development expenses. In return, the contractor recovers costs
(investments and operating expenses) out of the gross production
stream. The contractor normally receives payment in oil production
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and is exposed to both technical and market risks.
Crown Block: Stationary pulley system used to raise or lower drilling
equipment for the derrick. Supports the traveling block.
Crude Oil Equivalent: A measure of energy content that converts units
of different kinds of energy into the energy equivalent of barrels of oil.
Conversion of gas volumes to their oil equivalent, customarily done on
the basis of the nominal heating content or caloric value of the fuel.
Before aggregating, the gas volumes first must be converted to the
same temperature and pressure. Common industry gas conversion
factors usually range between 1 barrel of oil equivalent (BOE) =
5,600–6,000 standard cubic feet of gas. (Also termed Barrels of Oil
Equivalent.)
Crude Oil: Petroleum that exists in the liquid phase in natural
underground reservoirs and remains liquid at atmospheric conditions
of pressure and temperature. Crude Oil may include small amounts of
nonhydrocarbons produced with the liquids but does not include
liquids obtained from the processing of natural gas. Crude oils range
from very light (high in gasoline) to very heavy (high in residual oils).
Sour Crude is high in sulphur content. Sweet Crude is low in sulphur
and therefore often more valuable.
Cubic Foot (CF): The most common unit of measurement of gas
volume. It is the amount of gas required to fill a volume of one cubic foot
under stated conditions of temperature, pressure and water vapour.
Cumulative Production: The sum of production of oil and gas to date
(see also Production).
Current Economic Conditions: Establishment of current economic
conditions should include relevant historical petroleum prices and
associated costs and may involve a defined averaging period. The SPE
guidelines recommend that a one-year historical average of costs and
prices should be used as the default basis of “constant case” resources
estimates and associated project cash flows.
Cushion Gas Volume: With respect to underground natural gas storage,
the gas volume required in a storage field for reservoir management
purposes and to maintain adequate minimum storage pressure for
Glossary of the Oil and Gas Industry and Conversion Factors 15
meeting working gas volume delivery with the required withdrawal
profile. In caverns, the cushion gas volume is also required for stability
reasons. The cushion gas volume may consist of recoverable and
nonrecoverable in-situ gas volumes and/or injected gas volumes.
Cuttings: Chips and small rock fragments brought to the surface by the
flow of drilling mud as it is circulated and examined by geologists for oil
or gas content.
CV (Calorific Value): Calorific Value is the quantity of heat produced
by the total combustion of a fuel.
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D
Dayrate: The daily rate paid by an operator to a drilling contractor
under a daywork contract. (See also Footage and Turnkey Contract).
Daywork Contract: A contract under which the drilling contractor is
paid by the day or portion thereof.
DCQ (Daily Contract Quantity): The quantity of gas which a Buyer
technically undertakes to purchase and a Seller undertakes to deliver
within a specified 24 hour period.
DDR (Daily Delivery Rate): The Daily Delivery Rate (DDR) is the rate
at which the Seller's facilities must be capable of delivering gas,
expressed as a volume of gas per day, or as a multiple of the Daily
Contract Quantity. Also known as the Maximum Daily Quantity.
DEC (Design Endorsement Certificate).
Deductions: Tax items which may be subtracted from Gross Income to
arrive at Taxable Income in Federal Income computations.
Deed: A written document by which the title to a property is
transferred from one party (the grantor) to another (the grantee).
Delay Rental: Cash payments to the Mineral Rights Owner (lessor) by
the Working Interest Owner (lessee), for the privilege of postponing the
commencement of drilling operations on the leased property.
Consideration paid to the lessor by a lessee to extend the terms of an oil
and gas lease in the absence of operations and/or production that is
contractually required to hold the lease. This consideration is usually
required to be paid on or before the anniversary date of the oil and gas
lease during its primary term, and typically extends the lease for an
17
additional year. Non-payment of the delay rental in the absence of
production or commencement of operations will generally result in
abandonment of the lease after its primary term has expired.
Deliverability: A well's tested ability to produce.
Depletion, Restoration of: In Federal Income Taxation, the adding
back to income of the Depletion Allowance taken on minerals not
produced.
Depletion: The act of emptying, reducing or exhausting as the
depletion of nature resources.
Deposit: Material that has accumulated due to a natural process. In
resource evaluations it identifies an accumulation of hydrocarbons in a
reservoir (see Accumulation).
Depreciation: Reduction in Capital Value of a tangible asset (such as
mechanical equipment, building, etc.) that results from wear, waste and
obsolescence.
Derrick: A steel mast used to support the drill string or drilling
equipment such as casing wire rope positioned to the side of the
derrick with wire traveling up the crown block.
DES (Delivery Ex Ship).
Deterministic Estimate: The method of estimation of Reserves or
Resources is called deterministic if a discrete estimate(s) is made based
on known geoscience, engineering, and economic data.
Developed Non-producing Reserves: Developed Non-Producing
Reserves include shut-in and behind-pipe Reserves. Shut-in Reserves
are expected to be recovered from (1) completion intervals that are
open at the time of the estimate but which have not yet started
producing, (2) wells that were shut in for market conditions or pipeline
connections, or (3) wells not capable of production for mechanical
reasons. Behind- pipe Reserves are also those expected to be recovered
from zones in existing wells that will require additional completion
work or future recompletion prior to start of production. In all cases,
production can be initiated or restored with relatively low expenditure
compared to the cost of drilling a new well.
Developed Producing Reserves: Developed Producing Reserves are
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expected to be recovered from completion intervals that are open and
producing at the time of the estimate. Improved recovery reserves are
considered producing only after the improved recovery project is in
operation.
Developed Reserves: Developed Reserves are expected to be
recovered from existing wells including reserves behind pipe.
Improved recovery reserves are considered "Developed" only after the
necessary equipment has been installed, or when the costs to do so are
relatively minor compared to the cost of a well. Developed Reserves
may be further subclassified as Producing or Non- Producing.
Development not Viable: A discovered accumulation for which there
are no current plans to develop or to acquire additional data at the time
due to limited production potential. A project maturity sub- class that
reflects the actions required to move a project toward commercial
production.
Development Pending: A discovered accumulation where project
activities are ongoing to justify commercial development in the
foreseeable future. A project maturity subclass that reflects the actions
required to move a project toward commercial production.
Development Plan: The design specifications, timing, and cost
estimates of the development project that can include, but is not
limited to, well locations, completion techniques, drilling methods,
processing facilities, transportation and marketing. (See also Project.)
Development Unclarified or on Hold: A discovered accumulation
where project activities are on hold and/or where justification as a
commercial development may be subject to significant delay. A project
maturity subclass that reflects the actions required to move a project
toward commercial production.
Development Well: A well drilled in an already discovered oil or gas
field.
DFDE (Dual-Fuel Diesel Electric LNG vessel).
Differential-Pressure Sticking: A condition in which a section of drill
pipe becomes stuck in deposits on the wall of the borehole.
Directional Drilling: Drilling at an angle, instead of on the perpendicular,
Glossary of the Oil and Gas Industry and Conversion Factors 19
by using a whip stock to bend the pipe until it is going in the desired
direction. Directional Drilling is used to develop offshore leases, where
it is very costly and sometimes impossible to prepare separate sites for
every well; to reach oil beneath a building or some other location which
cannot be drilled directly; or to control damage or as a last resort when
a well has cratered. It is much more expensive than conventional
drilling procedures.
Discovered Petroleum Initially-in-Place: Discovered Petroleum
Initially-in-Place is that quantity of petroleum that is estimated, as of a
given date, to be contained in known accumulations prior to production.
Discovered Petroleum Initially-In-Place may be subdivided into
Commercial, Sub- Commercial, and Unrecoverable, with the estimated
commercially, recoverable portion being classified as Reserves and the
estimated sub commercial recoverable portion being classified as
Contingent Resources.
Discovered: A discovery is one petroleum accumulation, or several
petroleum accumulations collectively, for which one or several
exploratory wells have established through testing, sampling, and/or
logging the existence of a significant quantity of potentially moveable
hydrocarbons. In this context, "significant" implies that there is
evidence of a sufficient quantity of petroleum to justify estimating the
in-place volume demonstrated by the well(s) and for evaluating the
potential for economic recovery. (See also Known Accumulations.)
Distillate: Liquid hydrocarbons, usually colorless and of high API
Gravity, recovered from wet gas by a separator that condenses that
liquid out of the gas. The present term is Natural Gas.
Distributor: A wholesaler of gasoline and other petroleum products;
also known as a jobber. Distributors of Natural Gas are almost always
regulated utility companies.
Division Order (DO): A contract for the sale of oil or gas, by the holder
of a revenue interest in a well or property, to the purchaser (often a
pipeline transmission company).
DOE (Department of Energy)
Downhole: Refers to equipment or operations that take place down
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inside a borehole.
Downstream: All operations taking place after Crude Oil is produced,
such as transportation, refining and marketing.
DQT (Downward Quantity Tolerance): The Downward Quantity
Tolerance (DQT) is the amount by which a buyer may fall short of its full
Annual Contract Quantity in a Take or Pay gas sales contract without
experiencing sanctions.
Drawworks: Power equipment used for the hoisting of the drilling
string via the derrick. Consists of a spool wrapped with.
Drill Bit: The part of the drilling tool that cuts through rock strata.
Drill String (Also called Drill Pipe or Drill Stem): Thirty-foot lengths of
steel tubing screwed together to form a pipe connecting the drill bit to
the drilling rig. The string is rotated to drill the hole and also serves as a
conduit for drilling mud.
Drilling Break: A sudden increase in the rate of drilling.
Drilling Mud: A mixture of clay, water, chemical additives and weighting
materials that flushes rock cuttings from a well, lubricates and cools the
drill bit, maintains the required pressure at the bottom of the well,
prevents the wall of the borehole from crumbing or collapsing and
prevents other fluids from entering the wellbore.
Drilling Rig: The surface equipment used to drill for oil or gas, consisting
chiefly of a derrick, a winch for lifting and lowering drill pipe, a rotary
table to turn the drill pipe and engines to drive the winch and rotary table.
Drilling: The act of boring a hole through which oil or gas may be
produced if encountered in commercial quantities.
Drill Stem Test (DST): A test through the drill pipe prior to completion
to determine if oil or gas is present in a formation.
Dry Gas: Natural gas remaining after hydrocarbons liquids have been
removed prior to the Reference Point (see definition). The dry gas and
removed hydrocarbon liquids are accounted for separately in resource
assessments. It should be recognized that this is a resource assessment
definition and not a phase behavior definition. (also called Lean Gas).
Dry Hole: A well found to be incapable of producing either oil or gas in
sufficient quantities to justify completion as an oil or gas well.
Glossary of the Oil and Gas Industry and Conversion Factors 21
Dry Natural Gas: Natural Gas containing few or no natural gas liquids
(liquid petroleum mixed with gas).
DSCR (Debt Service Coverage Ratio)
DSO (Domestic Supply Obligation)
DST: Drill Stem Test.
Dual Completion: Completing a well that draws from two or more
separate producing formations at different depths. This is done by
inserting multiple strings of tubing into the well casing and inserting
packers to seal off all formations except the one to be produced by a
particular string.
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E
Economic Interest: An Economic Interest is possessed in every case in
which an investor has acquired any interest in oil and gas in place and
secures the revenue derived from the extraction of the oil and gas to
which the investor must look for a return of his capital.
Economic Limit: Economic limit is defined as the production rate
beyond which the net operating cash flows (after royalties or share of
production owing to others) from a project, which may be an individual
well, lease, or entire field, are negative.
Economic: In relation to petroleum Reserves and Resources, economic
refers to the situation where the income from an operation exceeds the
expenses involved in, or attributable to, that operation.
ECOWAS (Economic Community of West African States)
EIA (Environmental Impact Assessment)
EIB (European Investment Bank)
Electric Rig (SCR): A drilling rig that uses diesel generators to supply
power to separate electric motors to power each of the rig's components
(silicon-controlled rectifier).
Electrical Well Logging: A method of oil exploration that originated
with Conrad Schlumberger, who first tested it in 1927 on a 1,500-meter
well in France. As used today, the process is very simple. Current passes
into the ground, through the resistive medium and into the sonde. The
resulting charts show the varying resistance, the conductance and the
self-potential of the strata surrounding the well at entry level, and
geophysicists use them to assay whether petroleum is present in a
formation.
23
Enhanced Oil Recovery (EOR): Injection of water, steam, gas or
chemicals into underground reservoirs to cause oil to flow toward
producing wells, permitting more recovery that would have been
possible from natural pressure or pumping alone.
Entitlement: That portion of future production (and thus resources)
legally accruing to a lessee or contractor under the terms of the
development and production contract with a lessor.
Entity: A legal construct capable of bearing legal rights and obligations.
In resources evaluations this typically refers to the lessee or contractor
which is some form of legal corporation (or consortium of corporations).
In a broader sense, an entity can be an organization of any form and may
include governments or their agencies.
EOT: End of Tubing.
EPC (Engineering, Procurement, and Construction)
Estimated Ultimate Recovery (EUR): Those quantities of petroleum
that are estimated, on a given date, to be potentially recoverable from
an accumulation, plus those quantities already produced therefrom.
Evaluation: The geosciences, engineering, and associated studies,
including economic analyses, conducted on a petroleum exploration,
development, or producing project resulting in estimates of the
quantities that can be recovered and sold and the associated cash flow
under defined forward conditions. Projects are classified and estimates
of derived quantities are categorized according to applicable guidelines.
(Also termed Assessment.)
Evaluator: The person or group of persons responsible for performing
an evaluation of a project. These may be employees of the entities that
have an economic interest in the project or independent consultants
contracted for reviews and audits. In all cases, the entity accepting the
evaluation takes responsibility for the results, including Reserves and
Resources and attributed value estimates.
Expenses (Tax Usage): Expenditures for business items that have no
future life (such as rent, utilities or wages) and are incurred in conducting
normal business activities.
Exploration: The search for oil and gas. Exploration Operations include:
CPEEL24
aerial surveys, geophysical surveys, geophysical studies, core testing
and the drilling of test wells.
Exploratory Well: A well drilled to an unexplored depth or in
unproven territory, either in search of a new reservoir or to extend the
known limits of a field that is already partly developed.
External Casing Packer: A device used on the inside of the well casing
to seal off formations or to protect certain zones. The packer is run on
the casing and expanded against the wall of the borehole at the proper
depth by hydraulic pressure or fluid pressure from the well.
Glossary of the Oil and Gas Industry and Conversion Factors 25
F
Farm In: When one company drills or performs other activity on
another company's lease in order to earn interest in or acquire that
lease.
Farm-out: An arrangement whereby the owner of a lease assigns the
lease, or some portion of it, to another party for drilling.
Fault Trap: A geological formation in which oil or gas, in a porous
section of rock, is sealed off by a displaced, non-porous layer.
Fault: A break in the continuity of stratified rocks or even basement
rocks. Faults are significant to oilmen, because they can form traps for
oil when the rock fractures, they can break oil reservoirs into non-
communicating sections, they help produce oil accumulations, and
they form traps on their own.
Favored Nations Clause: A clause which stipulates that if higher terms
are negotiated you will get the difference within a certain amount of
time or your lease is invalid. A Favored Nations clause may be
negotiated for both the bonus and the royalty or one or the other. A time
limit specifies the time that the clause is in effect, and a geographic
limitation is generally included to define the distance from the leased
land where the clause is to be honoured.
Fee Lands: Privately owned, non-public lands.
FEED (Front-End Engineering and Design)
Feet of Pay: The thickness of the pay zone penetrated in a well
FERC (Federal Energy Regulatory Commission)
FID (Final Investment Decision).
Field: An area consisting of a single reservoir or multiple reservoirs all
26
grouped on, or related to, the same individual geological structural
feature and/or stratigraphic condition. There may be two or more
reservoirs in a field that are separated vertically by intervening
impermeable rock, laterally by local geologic barriers, or both. The
term may be defined differently by individual regulatory authorities.
Filter Cake: A plastic-like coating that builds up inside the borehole.
Such buildup can cause serious drilling problems, including sticking of
the drill pipe.
Fishing Tools: Special instruments equipped with the means for
recovering objects lost while drilling the well.
Fishing: Recovering the tools or pipe that have been accidentally lost
down the borehole by using specially designed tools that screw into or
grab the missing equipment.
Five-Spot Water Flood Program: A secondary-recovery operation in
which four injection wells are drilled in a square pattern with the
production well in the center. Water from the injection wells moves
through the formation, forcing oil toward the production well.
Flange Up: To complete the drilling of a well.
Flare Gas: Total volume of gas vented or burned as part of production
and processing operations.
Flaring: The burning of gas vented through a pipe or stack at a refinery,
or a method of disposing of gas while a well is being drilled. Flaring is
regulated by state agencies. Venting (letting gas escape unburned) is
generally prohibited.
FLNG (Floating LNG): Floating LNG is the deployment of purpose built
or converted ships to enable liquefaction of LNG to be done offshore.
Flooding: One of the methods of enhanced oil recovery. Water Flooding
or Gas Flooding might be considered secondary recovery methods.
Flow Test: An operation on a well designed to demonstrate the
existence of moveable petroleum in a reservoir by establishing flow to
the surface and/or to provide an indication of the potential
productivity of that reservoir (such as a wireline formation test).
Flow Through Concept: In ventures structured as partnerships (or “S”
corporations), certain items or tax significance (profit, loss, etc.) are passed
Glossary of the Oil and Gas Industry and Conversion Factors 27
on to the partners (or “S” corporation shareholders) in the venture. In a
venture structured as a “C” corporation, the responsible tax-paying party
would be the corporation itself (not its shareholders).
Flowing Well: A well that produces through natural reservoir pressure
and does not require pumping.
Fluid Contacts: The surface or interface in a reservoir separating two
regions characterized by predominant differences in fluid saturations.
Because of capillary and other phenomena, fluid saturation change is not
necessarily abrupt or complete, nor is the surface necessarily horizontal.
FM (Force Majeure): A contractual term used to define conditions in
which a party to a contract is not obliged to carry out its commitments
because of major events outside its control.
FOB (Free on Board)
Footage Contracts: A contract under which the operator and contract
driller agree to a fixed price per foot drilled. Contractor carries more of
the operating risk than in a Daywork Contract. (See also Daywork and
Turnkey Contract.)
Forecast Case: Modifier applied to project resources estimates and
associated cash flow when such estimates are based on those
conditions (including costs and product price schedules) forecast by
the evaluator to reasonably exist throughout the life of the project.
Inflation or deflation adjustments are made to costs and revenues over
the evaluation period.
Formation: A geological term that describes a succession of strata
similar enough to form a distinctive geological unit useful for mapping
or description.
Forward Market: The process of buying or selling a specific crude oil
for delivery at a future date. Not all forward market transactions result
in physical delivery of crude oil represented by the contract as the
agreement for actual delivery may be cancelled by subsequent selling
of the contract. There is no clearing house, or marginal payment
arrangement in the forward market as distinct from futures trading in
an organized commodities exchange.
Forward Sales: There are a variety of forms of transactions that
involve the advance of funds to the owner of an interest in an oil and gas
CPEEL28
property in exchange for the right to receive the cash proceeds of
production, or the production itself, arising from the future operation
of the property. In such transactions, the owner almost invariably has a
future performance obligation, the outcome of which is uncertain to
some degree. Determination as to whether the transaction represents a
sale or financing rests on the particular circumstances of each case.
Fossil Fuels: Fuels that originate from the remains of living things, such
as coal, oil, Natural Gas and peat.
Fracturing (FRAC): A well stimulation technique in which fluids are
pumped into a formation under extremely high pressure to create or
enlarge fractures for oil and gas to flow through. Proppants such as
sand are injected with the liquid to hold the fractures open.
Front-End Costs: Costs that are paid out of the initial investment in a
venture, first, before the venture activities actually begin.
FSRU (Floating Storage and Regasification Unit): FRSU is the
deployment of purpose built or converted ships to enable storage and
regasification of LNG to be done offshore.
FTA (Free-Trade Agreement)
FTP: Flowing Tubing Pressure
Fuel Gas: See Lease Fuel.
Future Prices: Refers to the New York Mercantile Exchange (NYMEX)
which introduced future contracts for Crude Oil in 1985 and Natural
Gas in 1990.
Futures Contract: An agreement reached in an organized futures
trading “pit”, to take or make delivery, at a future date, of a specified
quantity and quality of goods (e.g. crude oil, gasoline or heating oil) at a
predetermined delivery point and at a price determined by public
outcry.
Futures Market: A forward commodities exchange in which contracts
for delivery of a specific type of crude oil and/or products in future
methods are traded. Only a very small proportion of the contracts result
in actual delivery, and in some markets, there is only cash settlement.
All of the markets include clearinghouse and require daily margin
payments on all positions in order to ensure financial integrity of the
operation. The market is open to all participants.
Glossary of the Oil and Gas Industry and Conversion Factors 29
G
Gamma-Ray Logging: A technique of exploration for oil in which a
well's borehole is irradiated with gamma rays. The varying emission of
these rays indicates to geologists the relative density of the rock
formation at different levels.
Gas Balance: In gas production operations involving multiple working
interest owners, an imbalance in gas deliveries can occur. These
imbalances must be monitored over time and eventually balanced in
accordance with accepted accounting procedures.
Gas Cap: The gas that exists in a free state above the oil in the reservoir.
Gas Condensate: Liquid hydrocarbons present in casinghead gas that
condense when brought to the surface.
Gas Field: A district or area from which natural gas is produced.
Gas Hydrates: Naturally occurring crystalline substances composed of
water and gas in which a solid water lattice accommodates gas molecules
in a cage like structure, or clathrate. At conditions of standard
temperature and pressure (STP), one volume of saturated methane
hydrate will contain as much as 164 volumes of methane gas. Because of
this large gas-storage capacity, gas hydrates are thought to represent an
important future source of natural gas. Gas hydrates are included in
unconventional resources, but the technology to support commercial
production has yet to be developed.
Gas Inventory: The sum of Working Gas Volume and Cushion Gas
Volume in underground gas storage.
Gas Lift: A recovery method that brings oil from the bottom of a well to
the surface by using compressed gas. Gas pumped to the bottom of the
30
reservoir mixes with fluid, expands it and lifts it to the surface.
Gas Plant Products: Gas Plant Products are natural gas liquids (or
components) recovered from natural gas in gas processing plants and,
in some situations, from field facilities. Gas Plant Products include
ethane, propane, butanes, butanes/propane mixtures, natural gasoline
and plant condensates, sulfur, carbon dioxide, nitrogen, and helium.
Gas/Oil Ratio (GOR): The number of cubic feet of natural gas produced
along with a barrel of oil. The GOR in an oil field is calculated using
measured natural gas and crude oil volumes at stated conditions. The GOR
may be the solution gas/oilratio (Rs); produced gas/oil ratio (Rp); or
another suitably defined ratio of gas production to oil production.
Gas-Cut Mud: Drilling mud permeated with bubbles of gas from down
hole. The circulation of such mud can be severely impaired, seriously
affecting drilling operations.
Gas-to-Liquids (GTL) Projects: Projects using specialized processing
(e.g., Fischer-Tropsch synthesis) to convert natural gas into liquid
petroleum products. Typically, these projects are applied to large gas
accumulations where lack of adequate infrastructure or local markets
would make conventional natural gas development projects uneconomic.
GCV (Gross Calorific Value): The heat produced by the complete
combustion of a unit volume of gas in oxygen, including the heat which
would be recovered by condensing the water vapor made. Also known
as Gross Heating Value, Higher Calorific Value (HCV) or Higher Heating
Value (HHV).
Geophones: The sound-detecting instruments used to measure sound
waves created by explosions set off during seismic exploration work.
Geophysicist: A geophysicist applies the principles of physics to the
understanding of geology.
Geostatistical Methods: A variety of mathematical techniques and
processes dealing with the collection, methods, analysis, interpretation,
and presentation of masses of geoscience and engineering data to
(mathematically) describe the variability and uncertainties within any
reservoir unit or pool; specifically related here to resources estimates,
including the definition of (all) well and reservoir parameters in 1, 2,
Glossary of the Oil and Gas Industry and Conversion Factors 31
and 3 dimensions and the resultant modeling and potential prediction
of various aspects of performance.
Geothermal Energy: Energy produced from subterranean heat.
GMP (Gas Master Plan)
Gross Income: Total income from an activity, before deduction of (1)
items that may be treated as expenses(such as intangible drilling
costs), and (2) allowed tax items (such as depletion allowance,
depreciation allowance, etc.).
Guaranteed Payments: Payments by a partnership to one or more of
its partners for services rendered.
Gun Perforation: A method of creating holes in a well casing down
hole by exploding charges to propel steel projectiles through the casing
well. Such holes allow oil or gas from the formation to enter the well.
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H
Hang The Rods: To pull pump rods out of the well and hang them in the
derrick on rod hangers.
HAZID (Hazard Identification)
HAZOP (Hazard and Operability Study)
Heavy Oil: Crude oil with low API gravity (high specific gravity) and
high viscosity due to the presence of high proportion of heavy (high
molecular weight) hydrocarbons. It is usually difficult and costly to
produce by conventional techniques.
Held By Production (HBP): Refers to an oil and gas property under
lease, in which the lease continues to be enforced because of
production from the property.
HH (Henry Hub): Henry Hub is the biggest unified point for natural gas
spot and futures trading in the United States. The New York Mercantile
Exchange (NYMEX) uses Henry Hub as the notional point of delivery for
its natural gas futures contract. Henry Hub is based on the physical
interconnection of nine interstate and four intrastate pipelines in
Louisiana.
High Estimate (Resources): With respect to resource categorization,
this is considered to be an optimistic estimate of the quantity that will
actually be recovered from an accumulation by a project. If probabilistic
methods are used, there should be at least a 10% probability (P10) that
the quantities actually recovered will equal or exceed the high estimate.
Highest Known Hydrocarbons: The shallowest occurrence of a
producible hydrocarbon accumulation as interpreted from some
combination of well log, flow test, pressure measurement, and core
33
data. Hydrocarbons may or may not extend above this depth. Modifiers
are often added to specify the type of hydrocarbons (for instance,
“highest known gas”).
HOA (Heads of Agreement): A non-binding statement of the main
elements of a proposed agreement.
Hook load: The weight of the drill stem that is suspended from the hook.
Hook: A large, hook-shaped device from which the swivel is suspended.
It is designed to carry maximum loads ranging from 100 to 650 tons and
turns on bearings in its supporting housing.
Horizon: A specific sedimentary layer in a cross section of land,
especially one in which a petroleum reservoir is found.
Horizontal Drilling: The newer and developing technology that
makes it possible to drill a well from the surface, vertically down to a
certain level, then to turn at a right angle and continue drilling
horizontally within a specified reservoir or an interval of a reservoir,
which can result in both increased production rates and greater
ultimate recoveries of hydrocarbons.
Horsehead: The curved guide or head piece on the well end of a
pumping jack's walking beam. The guide holds the short loop of cable,
called the bridle, attached to the well's pump rods.
HSE (Health, Safety, and Environment)
HSSE (Health, Safety, Security, and Environment)
Hurdle Rate: The discount rate used in determining the net present
value (NPV). It must exceed the firm's cost of capital
Hydraulic Fracturing: A method of stimulating production from a
low-permeability formation by creating fractures and fissures by
applying very high fluid pressure.
Hydrocarbon: A large class of organic compound of hydrogen and
carbon. Crude Oil, Natural Gas and Condensate are all mixtures of
various hydrocarbons, among which methane is the simplest.
Hydrocarbons exist in a solid, liquid or gaseous states.
Hydrometer: An instrument that measures the specific gravity of liquids.
Hydrostatic Head: The height of a column of liquid. The difference in
height between two points in a body of liquid.
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I
IFC (International Finance Corporation)
Improved Recovery (IR): Improved Recovery is the extraction of
additional petroleum, beyond Primary Recovery, from naturally
occurring reservoirs by supplementing the natural forces in the
reservoir. It includes waterflooding and gas injection for pressure
maintenance, secondary processes, tertiary processes, and any other
means of supplementing natural reservoir recovery processes.
Improved recovery also includes thermal and chemical processes to
improve the in-situ mobility of viscous forms of petroleum. (Also called
Enhanced Recovery.)
In Situ: In its original place. Refers to methods of producing synfuels
underground, such as underground gasification of a coal seam or
heating oil shale underground, to release its oil.
Independent Producer: 1. A person or corporation that produces oil for
the market who has no pipeline system or refining. 2. An oil entrepreneur
who secures financial backing and drills his own wells.
Infill Drilling: Wells drilled to fill in between established producing
wells to increase production.
Initial Potential (IP): Flow rate measured during the initial completion
of a well in a specific reservoir (initial daily rate of production).
Injection Well: A well employed for the introduction into an underground
stratum of water, gas or other fluid under pressure. Injection Wells are
employed for the disposal of salt water produced with oil or other waste.
They are also used for a variety of other purposes: 1) Pressure
35
Maintenance-to introduce a fluid into a producing formation to maintain
underground pressures which would otherwise be reduced by virtue of
the production of oil or gas 2) Secondary Recovery Operations-to
introduce a fluid to decrease the viscosity of oil, reduce its surface
tension, lighten its specific gravity and drive oil into producing wells
resulting in greater production of oil.
Injection: The forcing, pumping, or free flow under vacuum of
substances into a porous and permeable subsurface rock formation.
Injected substances can include either gases or liquids.
Intangible Drilling Costs (IDC's): Expenditures, deductible for Federal
Income Tax purposes, incurred by an operator for labor, fuel, repairs,
hauling and supplies used in drilling and completing a well for
production.
Intermediate Casing: The middle string of casing where three strings
of casing are run in a well, sometimes called protection string.
Investment Tax Credit (ITC): A credit against income taxes, usually
computed as a percent of the cost of investment in certain types of
assets.
IOC(International Oil Company)
ISIP: Initial Shut-In Pressure.
Isopachous (Isopach) Map: A geological map showing the thickness
and shape of underground formations. A tool used to determine
underground oil and gas reservoirs.
CPEEL36
J
Jack or Unit: An oil-pumping unit. The pumping jack's walking beam
provides the up-and-down motion to the well's pump rods.
JCC-Japan Customs-cleared Crude (JCC) is the average price of
customs-cleared crude oil imports into Japan as reported in customs
statistics. The nicknamed the "Japanese Crude Cocktail".
Jetting: Injecting gas into a subsurface formation for the purpose of
maintaining reservoir pressure.
Japan Korea Marker (JKM) is the LNG (Liquefied Natural Gas)
benchmark price assessment for spot physical cargoes delivered ex-
ship into Japan and South Korea.
Joint (JT): A single section of drill pipe, casing or tubing usually about
30 feet long.
Joint Operating Agreement (JOA): A detailed written agreement
between the Working Interest Owners of a property which specifies the
terms according to which that property will be developed.
Joint Venture: A large-scale project in which two or more parties
(usually oil companies) cooperate. One supplies funds and the other
actually carries out the project. Each participant retains control over
his share, including liability and the right to sell.
Junk Basket: A magnet used to retrieve small tools lost in the well. A
fishing instrument.
Justified for Development: Implementation of the development
project is justified on the basis of reasonable forecast commercial
conditions at the time of reporting and that there are reasonable
expectations that all necessary approvals/contracts will be obtained. A
project maturity subclass that reflects the actions required to move a
project toward commercial production.
37
K
Kelly Bushing: Part of the drilling rig. The Kelly is a long hollow steel
bar that connects to the upper end of the drill string.
Kerogen: Naturally occurring, solid, insoluble organic material that
occurs in source rocks and can yield oil or gas upon subjection to heat
and pressure. Kerogen is also defined as the fraction of large chemical
aggregates in sedimentary organic matter that is insoluble in solvents
(in contrast, the fraction that is soluble in organic solvents is called
natural bitumen). (See also Oil Shales.)
Keyseating: A condition in which the drill collar of another part of the
drill string becomes wedged in a section of crooked hole.
Kick Occurs: When the pressure encountered in a formation exceeds
the pressure exerted by the column of drilling mud circulating through
the hole. If uncontrolled, a kick leads to a blowout.
Kill A Well: To overcome downhole pressure by adding weighting
elements to the drilling mud or wellbore.
Known Accumulation: An accumulation is an individual body of
petroleum-in-place. The key requirement to consider an accumulation
as “known,” and hence containing Reserves or Contingent Resources, is
that it must have been discovered, that is, penetrated by a well that has
established through testing, sampling, or logging the existence of a
significant quantity of recoverable hydrocarbons.
KOGAS (Korea Gas Corporation)
38
L
Lag Time: The time it takes for cuttings to be carried (circulate) from
the bottom of the borehole up to the surface by the mud system.
Landman: A self-employed individual or company employee who
secures oil and gas leases, check legal titles and attempts to cure title
defects so that drilling can begin.
Landowner Royalty: The share of the gross production of the oil and
gas on a property without deducting any of the cost of producing the oil
or gas.
Law of Capture: A legal concept on which the oil and gas law in some
states is based: since petroleum is liquid, and hence mobile, it is not
owned until it is produced.
LC (Local Content)
LCP (Local Content Policies)
LDC (Local Distribution Company): A company that distributes
natural gas primarily to small, residential and industrial end-users.
Lead Lines: The lines through which production from individual wells
is run to tanks.
Lead: A project associated with a potential accumulation that is
currently poorly defined and requires more data acquisition and/or
evaluation in order to be classified as a prospect. A project maturity
subclass that reflects the actions required to move a project toward
commercial production.
Lease (Oil and Gas): A contract by which the owner of the mineral
rights to a property (lessor or the host government), conveys to
another party (lessee or contractor), the exclusive right to explore for
39
and develop minerals on the property during a specified primary term
and as long thereafter as oil, gas or other minerals are being produced
in paying quantities.
Lease Acquisition Costs: Bonus payments to acquire a specific oil/gas
lease.
Lease Condensate: Lease Condensate is condensate recovered from
produced natural gas in gas/liquid separators or field facilities.
Lease Fuel: Oil and/or gas used for field and processing plant
operations. For consistency quantities consumed as lease fuel should
be treated as part of shrinkage. However, regulatory guidelines may
allow lease fuel to be included in Reserves estimates. Where claimed as
Reserves, such fuel quantities should be reported separately from sales
and their value must be included as an operating expense.
Lease Hound: Someone who goes out and aggressively acquires oil
and gas leases from the landowner and then turns around and sells or
trades them to an oil company planning to drill a well in that area.
Lease Offering (Lease Sale): An area of land offered for lease, for the
exploration for and production of specific natural resources such as oil
and gas. Such a lease conveys no title or occupancy rights apart from the
right to search for and produce petroleum or other natural resources
subject to the conditions stated in the lease.
Lease or Sublease: Any transaction in which the owner of operating
rights in a property assigns all or a portion of these rights to any other
party.
Lease Plant: A general term referring to processing facilities that are
dedicated to one or more development projects and the petroleum is
processed without prior custody transfer from the owners of the
extraction project (for gas projects, also termed “Local Gas Plant”).
LHV (Lower Heating Value): Alternative name for Net Calorific Value.
LCV (Lower Calorific Value) Alternative name for Net Calorific Value.
Lifting Costs: The costs of producing oil from a well or lease; the
operating expenses.
Light ends: The more volatile petroleum fractions including propane,
butanes and gasoline.
CPEEL40
Light Oil: Crude oil with high API gravity (low specific gravity) and low
viscosity due to a high proportion of lighter molecular weight)
hydrocarbons.
Limestone: Sedimentary rock largely consisting of calcite. On a world-
wide scale, limestone reservoirs probably contain more oil and gas
reserves than all other types of reservoir rock combined.
Liquefied Natural Gas (LNG) Project: Liquefied Natural Gas projects
use specialized cryogenic processing to convert natural gas into liquid
form for tanker transport. LNG is about 1/614 the volume of natural gas
at standard temperature and pressure.
LNG (Liquefied Natural Gas): LNG is Natural Gas which has been
cooled to a temperature, around the boiling point of methane (-162ºC),
at which it liquefies, thus reducing its volume by a factor of around 600.
LPG (Liquefied Petroleum Gas): Liquefied Petroleum Gas is propane,
butane, or propane-butane mixtures which have been liquefied through
pressure, mild refrigeration, or a combination of both.
Load Water: Fluid (water) pumped into a well, usually during a
fracture treatment of a producing formation.
Loan Agreement: A loan agreement is typically used by a bank, other
investor, or partner to finance all or part of an oil and gas project.
Compensation for funds advanced is limited to a specified interest rate.
Logs: Records made from data-gathering devices lowered into the
wellbore. The devices transmit signals to the surface which are then
recorded on film, paper or computer and used to make the record
describing the formation's porosity, fluid saturation and lithology. The
filing of a log is required by the Federal Government if the drill site is on
federal land.
LOI (Letter of Intent)
Lost Circulation: A serious condition that occurs when drilling mud
pumped into the well does not return to the surface but goes into the
porous formation, crevices or caverns instead.
Low Estimate: With respect to resource categorization, this is
considered to be a conservative estimate of the quantity that will actually
be recovered from the accumulation by a project. If probabilistic
Glossary of the Oil and Gas Industry and Conversion Factors 41
methods are used, there should be at least a 90% probability (P90) that
the quantities actually recovered will equal or exceed the low estimate.
Low/Best/High Estimates: The range of uncertainty reflects a
reasonable range of estimated potentially recoverable volumes at varying
degrees of uncertainty (using the cumulative scenario approach) for an
individual accumulation or a project.
Lowest Known Hydrocarbons: The deepest occurrence of a
producible hydrocarbon accumulation as interpreted from well log,
flow test, pressure measurement, or core data.
CPEEL42
M
Marginal Contingent Resources: Known (discovered) accumulations
for which a development project(s) has been evaluated as economic or
reasonably expected to become economic but commitment is withheld
because of one or more contingencies (e.g., lack of market and/or
infrastructure).
MBbls: One thousand barrels of oil
MCF (Thousand Cubic Feet)
MCFPD: Thousand Cubic Feet Per Day
MDBs (Multilateral Development Banks)
MDQ (Maximum Daily Quantity): An alternative name for Daily
Delivery Rate.
MDR (Maximum Daily Rate): An alternative name for Daily Delivery Rate.
Measurement: The process of establishing quantity (volume or mass)
and quality of petroleum products delivered to a reference point under
conditions defined by delivery contract or regulatory authorities.
MGJ/a (Million Gigajoules per annum)
Mid-Continent Crude: Oil produced mainly in Kansas, Oklahoma and
North Texas.
Midstream or Middle Distillates: Refinery products in the middle of
the distillation range of Crude Oil, including kerosene, kerosene-based
jet fuel, home heating, range oil, stove oil and diesel fuel.
Migration: The movement of oil and gas through layers of rock deep in
the earth.
Milling: Cutting a “window” in a well's casing with a tool lowered into
the hole on the drill string.
43
Mineral Interest: Mineral Interests in properties including (1) a fee
ownership or lease, concession, or other interest representing the right
to extract oil or gas subject to such terms as may be imposed by the
conveyance of that interest; (2) royalty interests, production payments
payable in oil or gas, and other non- operating interests in properties
operated by others; and (3) those agreements with foreign governments
or authorities under which a reporting entity participates in the operation
of the related properties or otherwise serves as producer of the underlying
reserves (as opposed to being an independent purchaser, broker, dealer,
or importer).
Mineral 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.
MJ (MegaJoule)
MLPs (Master Limited Partnerships)
MMBbls: Million barrels of oil
MMBOE: Million barrels of oil equivalent
MMBtu (Million British Thermal Units)
MMCF (Million Cubic Feet)
MMcfe: Million cubic feet of gas equivalent, determined using the ratio of
6 Mcf of natural gas to 1 Bbl of crude oil, condensate or natural gas liquids.
MMcm(Million cubic meters)
MMscf(Million standard cubic feet)
MMscm(Million standard cubic meters)
MOI (Memorandum of Intent): Also known as Confirmation of Intent
and Letter of Intent.
Monocline: A geologic formation in which all the strata are inclined in
the same direction.
Monte Carlo Simulation: A type of stochastic mathematical simulation that
randomly and repeatedly samples input distributions (e.g., reservoir properties)
to generate a resulting distribution (e.g., recoverable petroleum volumes).
MOU (Memorandum of Understanding): A non-binding statement of
intent to reach a proposed agreement.
MT (Million tonnes)
MTPA (Million tonnes per annum)
CPEEL44
Mud Engineer: A technician responsible for proper maintenance of
the mud system.
Mud 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).
Mud: A fluid mixture of clay, chemicals and weighting materials
suspended in fresh water, salt water or Diesel Oil.
Multiple Completion: Completion of a well in more than one
producing formation. The tubing of each production zone extends up to
the Christmas tree or wellhead to be piped to separate tankage or gas
sales lines.
MW(MegaWatt): One million Watts
MWh (MegaWatt hour)
Glossary of the Oil and Gas Industry and Conversion Factors 45
N
Natural Bitumen: Natural Bitumen is the portion of petroleum that
exists in the semisolid or solid phase in natural deposits. In its natural
state, it usually contains sulfur, metals, and other nonhydrocarbons.
Natural Bitumen has a viscosity greater than 10,000 milliPascals per
second (mPa.s) (or centipoises) measured at original temperature in
the deposit and atmospheric pressure, on a gas- free basis. In its natural
viscous state, it is not normally recoverable at commercial rates
through a well and requires the implementation of improved recovery
methods such as steam injection. Natural Bitumen generally requires
upgrading prior to normal refining. (Also called Crude Bitumen.)
Natural Gas Inventory: With respect to underground natural gas
storage operations “inventory” is the total of working and cushion gas
volumes.
Natural Gas Liquids (NGL): A mixture of light hydrocarbons that exist
in the gaseous phase at reservoir conditions but are recovered as
liquids in gas processing plants. NGL differs from condensate in two
principal respects: (1) NGL is extracted and recovered in gas plants
rather than lease separators or other lease facilities; and (2) NGL
includes very light hydrocarbons (ethane, propane, butanes) as well as
the pentanes-plus (the main constituent of condensates).
Natural Gas: Natural Gas is the portion of petroleum that exists either
in the gaseous phase or is in solution in crude oil in natural
underground reservoirs, and which is gaseous at atmospheric
conditions of pressure and temperature. Natural Gas may include some
amount of nonhydrocarbons such as carbon dioxide, helium, hydrogen
sulfide and nitrogen.
46
NBP (National Balancing Point):The National Balancing Point is a
virtual trading location for the sale and purchase and exchange of UK
natural gas.
NCV (Net Calorific Value): The heat produced by the complete
combustion of a unit volume of gas in oxygen, without the heat which
would be recovered by condensing the water vapor formed.
Net 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.
Net Profits Interest: An interest that receives a portion of the net
proceeds from a well, typically after all costs have been paid.
Net Revenue Interest (NRI): The percentage of revenues due an
interest holder in a property, net of royalties or other burdens of the
property. A Landowner leases his Mineral Rights to an oil man. The
Landowner retains a royalty of c (=12.5%); his Net Revenue Interest is
12.5%. The oil man's Set Revenue Interest would be 87.5% (=100% -
12.5%).
Net Working Interest: A company's working interest reduced by
royalties or share of production owing to others under applicable lease
and fiscal terms. (Also called Net Revenue Interest.)
Net-back: Linkage of input resource to the market price of the refined
products.
NGV (Natural Gas Vehicle): A motorized vehicle powered by natural
gas. See Compressed Natural Gas.
NHV (Net Heating Value): Same as NCV
NNPC (Nigeria National Petroleum Corporation)
NOC (National Oil Company)
NAG (Non-Associated Gas): Non-Associated Gas is gas found in a
reservoir which contains no crude oil, and can, therefore, be produced in
patterns best appropriate to its own operational and market
requirements.
Non-Hydrocarbon Gas: Natural occurring associated gases such as
nitrogen, carbon dioxide, hydrogen sulfide, and helium. If
nonhydrocarbon gases are present, the reported volumes should
reflect the condition of the gas at the point of sale. Correspondingly, the
Glossary of the Oil and Gas Industry and Conversion Factors 47
accounts will reflect the value of the gas product at the point of sale.
Normal Production Practices: Production practices that involve flow
of fluids through wells to surface facilities that involve only physical
separation of fluids and, if necessary, solids. Wells can be stimulated,
using techniques including, but not limited to, hydraulic fracturing,
acidization, various other chemical treatments, and thermal methods,
and they can be artificially lifted (e.g., with pumps or gas lift).
Transportation methods can include mixing with diluents to
enable flow, as well as conventional methods of compression or
pumping. Practices that involve chemical reforming of molecules of the
produced fluids are considered manufacturing processes.
CPEEL48
O
Octane: A hydrocarbon of the paraffin series. It is liquid at ordinary
atmospheric conditions, although small amounts may be present in the
gas associated with petroleum.
Offset Well Location: Potential drill location adjacent to an existing
well. The offset distance may be governed by well spacing regulations.
In the absence of well spacing regulations, technical analysis of
drainage areas may be used to define the spacing. For Proved volumes
to be assigned to an offset well location, there must be conclusive,
unambiguous technical data that supports the reasonable certainty of
production of hydrocarbon volumes and sufficient legal acreage to
economically justify the development without going below the
shallower of the fluid contact or the lowest known hydrocarbon.
Offset 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.
Oil Column: The vertical height (thickness) of an oil accumulation
above the oil-water contact.
Oil Gravity: The density of liquid hydrocarbons, generally measured in
degrees.
Oil In Place: The Crude Oil estimated to exist in a field or a reservoir. Oil
in the formation not yet produced.
Oil Pool: An underground reservoir containing oil. An oil field may
contain one or more pools, each of which has its own pressure system.
Oil Rig: A Drilling Rig that drills for oil and gas.
49
Oil Run: (1) The production of oil during a specified period of time. (2)
A tank of oil gauged, tested and put in a pipeline or trucked to a refinery
or pipeline.
Oil Sands: Sand deposits highly saturated with natural bitumen. Also
called “Tar Sands.” Note that in deposits such as the western Canada “oil
sands,” significant quantities of natural bitumen may be hosted in a
range of lithologies including siltstones and carbonates.
Oil Shale: A fine-grained sedimentary rock that contains kerogen
partially formed oil. Whether extracted by mining or in-situ processes,
the material must be extensively processed to yield a marketable
product (synthetic crude oil).
Oilfield Services: Described as service companies that do work in and
for the oilfield. These services may include: cementing, perforating,
trucking, logging, etc.
OML -Oil Mining Lease
Production: The development project is currently producing and
selling petroleum to market. A project status/maturity subclass that
reflects the actions required to move a project toward commercial
production.
On The Pump: A phrase used in reference to a well that no longer flows
from natural reservoir energy but is produced by means of a pump.
OPEC (Organization of Petroleum Exporting Countries): was
founded in 1960 to coordinate the petroleum policies of its members,
and to provide member countries with technical and economic aid.
Member countries include: Saudi Arabia, Kuwait, Iran, Iraq, Venezuela,
Qatar, Libya, Indonesia, United Arab Emirates, Algeria, Nigeria, Ecuador,
Gabon and Equatorial Guinea.
Open Hole: The uncased part of a well.
Operator: The individual or company responsible for the drilling,
completion and production operations of a well and the physical
maintenance of the leased property.
OPL-Oil Prospecting License
Organization Costs: Direct costs incurred in the creation of a new
business organization, such as an Oil and Gas Limited Partnership or
Joint Venture.
CPEEL50
Outcrop: A portion of bedrock or other stratum, protruding through
the soil level indicating a fault or some other oil-bearing formation.
Overlift / Underlift: Production overlift or underlift can occur in
annual records because of the necessity for companies to lift their
entitlement in parcel sizes to suit the available shipping schedules as
agreed among the parties. At any given financial year-end, a company
may be in overlift or underlift. Based on the production matching the
company's accounts, production should be reported in accord with and
equal to the liftings actually made by the company during the year, and
not on the production entitlement for the year.
Overriding Royalty (ORR): 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.
Overthrust 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 Alabama. The
Western Overthrust Belt runs from Alaska through western Canada
and the Rocky Mountains into Central America.
Glossary of the Oil and Gas Industry and Conversion Factors 51
P
Packer: A flexible rubber sleeve that is part of a special joint of pipe.
Paid Up Lease: An oil and gas lease in which delay rentals for the entire
primary term are paid in advance with the bonus consideration.
Pay 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.
Payoff: The time when a well's production begins to bring in revenues.
Payout: The amount of time it takes to recover the Capital Investment
made on a well or drilling program.
Penetration: The intersection of a wellbore with a reservoir.
PEP (Project Execution Plan)
Perforating Gun: An instrument lowered at the end of a wire line into a
cased well. It contains explosive charges that can be electronically
detonated from the surface.
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)
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 oil men use the
Millidarcy because most of the rocks they come in contact with are not
very permeable. Permeability is the measure of how easily a fluid can
pass through a section of rock. If fluid can pass relatively easily through
a given layer, then the permeability is said to be high. However, if a layer
52
effectively blocks fluids or no fluids that can flow through the layer at
all, then the layer is said to be impermeable.
Petroleum Engineer: A term including three areas of specialization: (1)
Drilling Engineers specialize in the drilling, work over 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.
Petroleum Geologist: A geologist who specializes in exploration for
and production of petroleum.
Petroleum Initially-in-Place: Petroleum Initially-in-Place is the total
quantity of petroleum that is estimated to exist originally in naturally
occurring reservoirs. Crude Oil-in-place, Natural Gas- in-place and
Natural Bitumen-in-place are defined in the same manner (see
Resources). (Also referred as Total Resource Base or Hydrocarbon
Endowment.)
Petroleum: Petroleum is defined as a naturally occurring mixture
consisting of hydrocarbons in the gaseous, liquid, or solid phase.
Petroleum may also contain nonhydrocarbon compounds, common
examples of which are carbon dioxide, nitrogen, hydrogen sulfide, and
sulfur. In rare cases, nonhydrocarbon content could be greater than
50%.
Pilot Project: A small-scale test or trial operation that is used to assess
the suitability of a method for commercial application.
Pinch Out: The disappearance of porous, permeable formation
between two layers of impervious rock over a horizontal distance.
Pipeline 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.
Pipeline: A tube or system of tubes 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 lease to trunk lines; and trunk lines extending from a producing
Glossary of the Oil and Gas Industry and Conversion Factors 53
area to refineries or terminals.
Platform Rig: A drilling and production platform that is supported by a
truss of steel members (a jacket) secured to the ocean floor.
Play: A project associated with a prospective trend of potential
prospects, but which requires more data acquisition and/or evaluation
in order to define specific leads or prospects. A project maturity
subclass that reflects the actions required to move a project toward
commercial production.
Plug 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.
Plugged & Abandoned (P&A): This expression refers to setting
cement plugs in an unsuccessful well (a dry hole) or a depleted well.
Plugging 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.
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 (see Pooling).
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.
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. Pores
are spaces between grains of sediment in sedimentary rock. A
sedimentary rock with larger grain size will generally be more porous
allowing more fluid or air to flow through it. Very porous rock acts
somewhat like a sponge; soaking up water, air and petroleum. Generally,
porosity or the degree to which a formation can hold fluid decreases with
depth because increased pressures press grains together, thus decreasing
the space between grains.
CPEEL54
Possible Reserves (P3): An incremental category of estimated
recoverable volumes associated with a defined degree of uncertainty.
Possible Reserves are those additional reserves that analysis of
geoscience and engineering data suggest are less likely to be recoverable
than Probable Reserves. The total quantities ultimately recovered from
the project have a low probability to exceed the sum of Proved plus
Probable plus Possible (3P), which is equivalent to the high estimate
scenario. When probabilistic methods are used, there should be at least
a 10% probability that the actual quantities recovered will equal or
exceed the 3P estimate.
PPA (Power Purchase Agreement): A contract between a power
station and the electricity purchasing organization for the sale of
electricity.
Pre-FEED (Pre-Front End Engineering Design
Present 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.
Primary Recovery: Primary recovery is the extraction of petroleum
from reservoirs utilizing only the natural energy available in the
reservoirs to move fluids through the reservoir rock to other points of
recovery.
Primary Term: The period of time during which an oil and gas lease will
be in effect, in the absence of production, drilling or other operations
specified by the lease. The oil and gas lease can be perpetuated past the
primary term by production in paying quantities, drilling, operations
and/or the payment of shut-in royalties specified by the lease.
Probabilistic Estimate: The method of estimation of Resources is
called probabilistic when the known geoscience, engineering, and
economic data are used to generate a continuous range of estimates
and their associated probabilities.
Probability: The extent to which an event is likely to occur, measured
by the ratio of the favorable cases to the whole number of cases
possible. SPE convention is to quote cumulative probability of
exceeding or equaling a quantity where P90 is the small estimate and
Glossary of the Oil and Gas Industry and Conversion Factors 55
P10 is the large estimate. (See also Uncertainty.)
Probable Reserves (P2): An incremental category of estimated
recoverable volumes associated with a defined degree of uncertainty.
Probable Reserves are those additional Reserves that are less likely to
be recovered than Proved Reserves but more certain to be recovered
than Possible Reserves. It is equally likely that actual remaining
quantities recovered will be greater than or less than the sum of the
estimated Proved plus Probable Reserves (2P). In this context, when
probabilistic methods are used, there should be at least a 50%
probability that the actual quantities recovered will equal or exceed the
2P estimate.
Producing Horizon: Where the well is actually produced since it may
be drilled to a greater depth.
Production Test: A test made to determine the daily rate of oil, gas and
water production from a potential pay zone.
Production: A term commonly used to describe taking natural
resources out of the ground. Production is the cumulative quantity of
petroleum that has been actually recovered over a defined time period.
While all recoverable resource estimates and production are reported
in terms of the sales product specifications, raw production quantities
(sales and non-sales, including nonhydrocarbons) are also measured
to support engineering analyses requiring reservoir voidage
calculations.
Production-Sharing Contract: In a production-sharing contract between
a contractor and a host government or state oil company, the contractor
typically bears all risk and costs for exploration, development, and
production. In return, if exploration is successful, the contractor is given
the opportunity to recover the incurred investment from production,
subject to specific limits and terms. The contractor normally receives
title to the prescribed share of the hydrocarbon volumes as they are
produced.
PSA (Production Sharing Agreement): An alternative name for a
Production Sharing Contract.
Profit Split: Under a typical production-sharing agreement, the
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contractor is responsible for the field development and all exploration
and development expenses. In return, the contractor is entitled to a
share of the remaining profit oil or gas. The contractor receives
payment in oil or gas production and is exposed to both technical and
market risks.
Project: Represents the link between the petroleum accumulation and
the decision-making process, including budget allocation. A project
may, for example, constitute the development of a single reservoir or
field, or an incremental development in a producing field, or the
integrated development of a group of several fields and associated
facilities with a common ownership. In general, an individual project
will represent a specific maturity level at which a decision is made on
whether or not to proceed (i.e., spend money), and there should be an
associated range of estimated recoverable resources for that project.
(See also Development Plan.)
Property: A volume of the Earth's crust wherein a corporate entity or
individual has contractual rights to extract, process, and market a
defined portion of specified in-place minerals (including petroleum).
Defined in general as an area but may have depth and/or stratigraphic
constraints. May also be termed a lease, concession, or license.
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.
Pro-rationing: The allocation of production among reservoirs and
wells or allocation of pipeline capacity among shippers, etc.
Prospect: A lease or group of leases on which an operator intends to
drill.
Prospect: A project associated with a potential accumulation that is
sufficiently well defined to represent a viable drilling target. A project
maturity sub-class that reflects the actions required to move a project
toward commercial production.
Prospective Resources: Those quantities of petroleum that are estimated,
as of a given date, to be potentially recoverable from undiscovered
accumulations.
Glossary of the Oil and Gas Industry and Conversion Factors 57
Proved Behind-Pipe Reserves: Estimates of the amount of Crude Oil
or Natural Gas recoverable by recompleting existing wells.
Proved Developed Reserves (PDP's): Estimates of what is
recoverable from existing wells with existing facilities from open,
producing pay zones.
Proved Economic: In many cases, external regulatory reporting and/or
financing requires that, even if only the Proved Reserves estimate for the
project is actually recovered, the project will still meet minimum
economic criteria; the project is then termed as “Proved Economic.”
Proved Reserves (P1):Estimates of the amount of oil or Natural Gas
believed to be recoverable from known reservoirs under existing
economic and operating conditions. An incremental category of
estimated recoverable volumes associated with a defined degree of
uncertainty Proved Reserves are those quantities of petroleum which, by
analysis of geoscience and engineering data, can be estimated with
reasonable certainty to be commercially recoverable, from a given date
forward, from known reservoirs and underdefined economic conditions,
operating methods, and government regulations. If deterministic methods
are used, the term reasonable certainty is intended to express a high degree
of confidence that the quantities will be recovered. If probabilistic methods
are used, there should be at least a 90% probability that the quantities
actually recovered will equal or exceed the estimate. Often referred to as
1P, also as “Proven.”
Proved Undeveloped Reserves (PUD's): Estimates of what is
recoverable through new wells on un-drilled acreage, deepening existing
wells or secondary recovery methods.
PU: Picked Up.
Public 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.
Public Offering: A securities (investment) offering intended for sales
to the general public. It must be registered 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.
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Pugh Clause: A clause, which is calculated to prevent the holding of
non-pooled acreage in a lease while certain portions of the lease
acreage are being held under pooled arrangements. The main purpose
of a Pugh clause is to protect the landowner from having their entire
property held under a lease by production from a very small portion.
Pump Off: To pump a well so rapidly that the oil level falls below the
pump's standing valve rendering the well temporarily dry.
Pump: A device that is installed inside or on a production string
(tubing) that lifts liquids to the surface.
Pumper: A person who oversees daily operations of wells in the field.
Pumping Unit: Surface pumping equipment driven by a motor.
Pumping Well: A well that does not flow naturally and requires a pump
to bring product to the surface.
Purchase Contract: A contract to purchase oil and gas provides the
right to purchase a specified volume of production at an agreed price
for a defined term.
Pure-Service Contract: A pure-service contract is an agreement
between a contractor and a host government that typically covers a
defined technical service to be provided or completed during a specific
period of time. The service company investment is typically limited to
the value of equipment, tools, and expenses for personnel used to
perform the service. In most cases, the service contractor's
reimbursement is fixed by the terms of the contract with little exposure
to either project performance or market factors.
Glossary of the Oil and Gas Industry and Conversion Factors 59
Q
Quitclaim 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).
60
R
R & D: Research and Development.
Ram: A closure mechanism on a blowout-preventor stack.
Range of Uncertainty: The range of uncertainty of the recoverable
and/or potentially recoverable volumes may be represented by either
deterministic scenarios or by a probability distribution. (See Resource
Uncertainty Categories.)
Raw Natural Gas: Raw Natural Gas is natural gas as it is produced from
the reservoir. It includes water vapor and varying amounts of the
heavier hydrocarbons that may liquefy in lease facilities or gas plants
and may also contain sulfur compounds such as hydrogen sulfide and
other nonhydrocarbon gases such as carbon dioxide, nitrogen, or
helium, but which, nevertheless, is exploitable for its hydrocarbon
content. Raw Natural Gas is often not suitable for direct utilization by
most types of consumers.
Reamer: A tool used to enlarge or straighten a borehole.
Reasonable Certainty: If deterministic methods for estimating
recoverable resource quantities are used, then reasonable certainty is
intended to express a high degree of confidence that the estimated
quantities will be recovered.
Reasonable Expectation: Indicates a high degree of confidence (low
risk of failure) that the project will proceed with commercial
development or the referenced event will occur.
Reasonable Forecast: Indicates a high degree of confidence in
predictions of future events and commercial conditions. The basis of
61
such forecasts includes, but is not limited to, analysis of historical
records and published global economic models.
Reclamation: The restoration of land to its original condition by
regarding contours and re-planting after the land has been mined,
drilled or otherwise has undergone alteration from its original state.
Recoverable Resources: Those quantities of hydrocarbons that are
estimated to be producible from discovered or undiscovered
accumulations under existing economic and operating conditions.
Recovery Efficiency: A numeric expression of that portion of in- place
quantities of petroleum estimated to be recoverable by specific
processes or projects, most often represented as a percentage.
Reef: A buildup of limestone formed by skeletal remains of marine
organisms. It often makes an excellent reservoir for petroleum.
Re-Entry: A well that was abandoned, but subsequent drilling and
production in the area, suggest that a potential pay zone in the well was
missed or passed over.
Reference Point: A defined location within a petroleum extraction and
processing operation where quantities of produced product are
measured under defined conditions prior to custody transfer (or
consumption). Also called Point of Sale or Custody Transfer Point.
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.
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.
Relief Well: A well drilled in a high-pressure formation to control a
blowout.
Reserves: Reserves are those quantities of petroleum anticipated to be
commercially recoverable by application of development projects to
known accumulations from a given date forward under defined
conditions. Reserves must further satisfy four criteria: They must be
discovered, recoverable, commercial, and remaining (as of a given
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date) based on the development project(s) applied.
Reservoir: A subsurface rock formation containing an individual and
separate natural accumulation of moveable petroleum that is confined
by impermeable rocks/formations and is characterized by a single-
pressure system.
Reservoir 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.
Resources Categories: Subdivisions of estimates of resources to be
recovered by a project(s) to indicate the associated degrees of
uncertainty. Categories reflect uncertainties in the total petroleum
remaining within the accumulation (in-place resources), that portion
of the in- place petroleum that can be recovered by applying a defined
development project or projects, and variations in the conditions that
may impact commercial development (e.g., market availability,
contractual changes)
Resources Classes: Subdivisions of Resources that indicate the
relative maturity of the development projects being applied to yield the
recoverable quantity estimates. Project maturity may be indicated
qualitatively by allocation to classes and subclasses and/or
quantitatively by associating a project's estimated chance of reaching
producing status.
Resources: The term “resources” as used herein is intended to
encompass all quantities of petroleum (recoverable and unrecoverable)
naturally occurring on or within the Earth's crust, discovered and
undiscovered, plus those quantities already produced. Further, it
includes all types of petroleum whether currently considered
“conventional” or “unconventional” (see Total Petroleum Initially-in-
Place). (In basin potential studies, it may be referred to as Total
Resource Base or Hydrocarbon Endowment.)
Retained Interest: A fractional interest reserved by the owner of a
whole interest when the balance of the whole interest is transferred to
another party.
Revenue-Sharing Contract: Revenue-sharing contracts are very
similar to the production-sharing contracts described earlier, with the
Glossary of the Oil and Gas Industry and Conversion Factors 63
exception of contractor payment. With these contracts, the contractor
usually receives a defined share of revenue rather than a share of the
production.
Reversionary Interest: The right of future possession of an interest in
a property when a specified condition has been met.
RFP (Request for Proposal)
Rig Year: A measure of the number of equivalent rigs operating during
a given period. It is calculated as the number of days rigs are operating
divided by the number of days in the period. For example, one rig
operating 182.5 days during a 365-day period represents .5 rig years,
and 100 rigs operating for 33,000 cumulative days, during a 365-day
period would equal 90.4 rig years (33,000 divided by 365).
Ring Fence: A term denoting a provision in a host country's tax and
accounting regulations which prevents charging the costs of
exploration and other expense from a project which was unsuccessful
against another similar project which was successful in finding oil and
gas in commercial quantities.
Risk and Reward: Risk and reward associated with oil and gas
production activities stems primarily from the variation in revenues
due to technical and economic risks. Technical risk affects a company's
ability to physically extract and recover hydrocarbons and is usually
dependent on a number of technical parameters. Economic risk is a
function of the success of a project and is critically dependent on cost,
price, and political or other economic factors.
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.
Risked-Service Contract: These agreements are very similar to the
production-sharing agreements with the exception of contractor
payment, but risk is borne by the contractor. With a risked- service
contract, the contractor usually receives a defined share of revenue
rather than a share of the production.
Roof Rock: A layer of impervious rock above a porous and permeable
formation that contains oil or gas.
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Rotary Drilling: A method of well-drilling that employs a rotating bit
and drilling mud to cut through rock formations.
Roughnecks: Members of the drilling crew.
Round Trip: Pulling the drill pipe from the hole to change the bit then
running the drill pipe and new bit back in the hole.
Roustabout: A semi-skilled hand who looks after, maintains or works
on producing wells and production facilities.
Royalty Funds: Generally speaking, a Royalty Fund is when Royalty
Interests are being bought, sold and held by the funds sponsors. In
nearly all leasing situations, once a lease has been developed, it
provides a revenue stream. A portion of the revenue stream is set aside
for royalty which generally amounts to 12.5% to20% and Overriding
Royalty and/or Carried Working Interest of 2-5%. In a Royalty Fund, the
objective of the fund is to generate its 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 associated 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.
Royalty: Royalty refers to payments that are due to the host
government or mineral owner (lessor) in return for depletion of the
reservoirs and the producer (lessee/contractor) for having access to
the petroleum resources. Many agreements allow for the producer to
lift the royalty volumes, sell them on behalf of the royalty owner, and
pay the proceeds to the owner. Some agreements provide for the royalty
to be taken only in kind by the royalty owner.
RU: Rig Up.
Run Ticket: A record of the oil run from a lease tank into a connecting
pipeline. An invoice for oil delivered.
Running the Tools: Putting the drill pipe, with the bit attached, into the
hole in preparation for drilling.
Runs: The transfer and delivery of Crude Oil and/or gas sold from a
Glossary of the Oil and Gas Industry and Conversion Factors 65
lease or leases; refers to either the measured volume sold and/or the
dollar amount of the sale.
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S
Sales: The quantity of petroleum product delivered at the custody
transfer (reference point) with specifications and measurement
conditions as defined in the sales contract and/or by regulatory
authorities. All recoverable resources are estimated in terms of the
product sales quantity measurements.
Salt Dome: A subsurface mound or dome of salt.
Salt-Bed Storage: Storage of petroleum products in underground
formations of salt whose cavities have been mined or leached out with
superheated water.
Sample 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.
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.
Sandstone: Rock composed mainly of sand-sized particles or
fragments of the mineral quartz.
Saturation: (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: The founder of Electrical Well Logging; now the name
for any Electrical Well Log.
Scout: An individual who observes and reports on competitor's leasing
and drilling activities.
Secondary Recovery: The introduction of water or gas into a well to
67
supplement the natural reservoir drive and force additional oil to the
producing wells.
Section: A square tract of land having an area of one square mile (= 640
acres). There are 36 sections in a township.
Securities Act of 1933: Establishes requirements for the disclosure of
information for any interstate offering and sale of securities.
Securities Exchange Act of 1934: Established the Securities and
Exchange Commission which regulates the activities of securities
markets.
Securities: Securities are commonly thought of as stocks and bonds.
As defined by the Securities Act of1933, 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.
Sedimentary Basin: A large land area composed of un-metamorphized
sediments. Oil and gas commonly occur in such formations.
Sedimentary Rock: Rock formed by the deposition of sediment
usually in a marine environment.
Seismic 3-D: A relatively new exploration technique used in the search
for oil and gas underground structures. The basic premise behind
Seismic is the same as Ultra Sound Technology used in the medical
field. Sound from a shot hole is recorded from geophones and
interpreted to give a picture of the underlying structures within the
earth. 3-D has now become a common practice to re-define and identify
known as well unknown structures. Many times these structures
contain traps that hold oil and gas yet to be discovered.
Seismic 4-D: The newest advances in Seismic Technology which now
takes into consideration a 4thdimension, which is time. With 4-D
Seismic, geologists are now able to monitor the movement and
mobility of oil as it is extracted in the production process.
Seismic 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
surfaces end sound waves into the earth in all directions, they reflect to
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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.
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.
Selling Expenses: Expenses incurred in marketing interests in
securities and commonly paid out of the Investor's capital investment.
Separator: A pressure vessel used to separate well fluids into gases
and liquids.
Service Well: A well drilled in a known oil or Natural Gas field to inject
liquids that enhance recovery or dispose of salt water.
Set Casing: To cement casing in the well hole; usually in preparation for
producing a commercial well.
Severance Tax: Tax paid to the State Government by producers of oil or
gas in the state.
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.
SGX (Singapore Exchange)
Shale Oil: The substance produced from the treatment of kerogen, the
hydrocarbon found in some shale's, which is difficult and costly to
extract. About 34 gallons of Shale Oil can be extracted from one ton of
ore.
Shale Shaker: A vibrating screen or sieve that strains cuttings out of
the mud before the mud is pumped back down into the borehole.
Shale: A type of rock composed of common clay or mud.
Sharing 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.
Glossary of the Oil and Gas Industry and Conversion Factors 69
Shoestring 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.
Shoot A Well: A technique that stimulates production of a tight
formation by setting off charges downhole that crack open the
formation. The early wells were shot with nitroglycerin then dynamite
was used. The nitro man has been replaced today by acidizers and frac
trucks.
Show: An indication of oil or gas while drilling.
Shut-Down Well/Shut-In Well (SI): 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 or for repairs.
Shut-In (SI): To stop a producing oil and gas well from producing.
Shut-In Pressure (SIP): The pressure at the wellhead when valves are
closed.
Shut-in Reserves: Shut-in Reserves are expected to be recovered from
(1) completion intervals which are open at the time of the estimate, but
which have not started producing; (2) wells which were shut-in for
market conditions or pipeline connections; or (3) wells not capable of
production for mechanical reasons.
Shut-In Royalty: A special type of royalty negotiated in the leasing of a
property.
SI: Shut-In.
Side 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.
SITP: Shut-In Tubing Pressure.
Skidding the Rig: Moving a derrick from one location to another on
skids and rollers.
SLiNG(SGX LNG Index Group)
Slot Jack-ups: Jack-ups that have the drilling derrick mounted over a
slot in the hull and cannot be used over adjacent structures.
SMEs (small-to -medium enterprises)
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SN: Seating Nipple.
Solution Gas:Solution Gas is a natural gas that is dissolved in crude oil
in the reservoir at the prevailing reservoir conditions of pressure and
temperature. It is a subset of Associated Gas.
Sour Natural Gas: Sour Natural Gas is a natural gas that contains
sulfur, sulfur compounds, and/or carbon dioxide in quantities that may
require removal for sales or effective use.
Source Rock: Sedimentary rock, usually shale containing organic
carbon in concentrations as high as 5-10% by weight.
SPA (Sales and Purchase Agreement)
Spacing 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.
Spot Market: A public financial market in which financial instruments
or commodities are traded for immediate delivery. A short-term
contract for the sale or purchase of a specified quantity of oil or gas at a
specified price.
Spudding a Well: To spud a well means to start the initial drilling
operations.
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).
SSLNG (Small-scale LNG)
Stack a Rig: To store a drilling rig on completion of a job when the rig is
to be withdrawn from operation for a time.
Step-Out Well: A well drilled near a proven well but located in an
unproven area that determines the boundaries of the producing
formation.
Stipper Oil Well: An oil well capable of producing less than 10 barrels of
oil per day.
Stochastic Estimate: Adjective defining a process involving or containing
a random variable or variables or involving chance or probability such as a
stochastic stimulation.
Stocktank Barrel (STB): A barrel of oil at the earth's surface.
Glossary of the Oil and Gas Industry and Conversion Factors 71
Stratigraphic Test: A hole drilled to gather information about rock
strata in an area.
Structure: Subsurface folds or fractures of strata that form a reservoir,
capable of holding oil or gas.
Structured 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 least 80% of the
world's oil and gas have been discovered.
Sub-commercial: A project is Subcommercial if the degree of
commitment is such that the accumulation is not expected to be
developed and placed on production within a reasonable time frame.
While 5 years is recommended as a benchmark, a longer time frame
could be applied where, for example, development of economic
projects are deferred at the option of the producer for, among other
things, market-related reasons, or to meet contractual or strategic
objectives. Discovered subcommercial projects are classified as
Contingent Resources.
Submarginal Contingent Resources: Known (discovered)
accumulations for which evaluation of development project(s)
indicated they would not meet economic criteria, even considering
reasonably expected improvements in conditions.
Submersible Pump: A bottom-hole group for use in an oil well when a
large volume of fluid is to be filled.
Subscription: The manner by which an Investor participates in a
drilling program through investment.
Substructure: A platform upon which a derrick is erected.
Supervisory Fee: Analogous to a management fee in an Oil and Gas
Limited Partnership. It is paid by the partnership to the general partner
for the direct supervision of mechanical operations at the well site.
Surface Rights: Surface ownership, of a tract of land, from which the
mineral rights have been severed.
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,
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as the swab is pulled back up, lifting oil to the surface.
Sweet Crude: Crude Oil with low sulfur content which is less corrosive,
burns cleaner and requires less processing to yield valuable product.
Sweet Natural Gas: Sweet Natural Gas is a natural gas that contains no
sulfur or sulfur compounds at all, or in such small quantities that no
processing is necessary for their removal in order that the gas may be
sold.
Swivel: A rotary tool that is hung from the rotary hook and the traveling
block to suspend the drill stem and to permit it to rotate freely. It also
provides a connection for the rotary hose and a passageway for the flow
of drilling fluid into the drill stem.
Syncline: A downfold in stratified rock that looks like an upright bowl.
Unfavorable to the accumulation of oil and gas.
Syndication Expenses: Expenditures incurred by a partnership in
connection with issuing and marketing its interest to Investors: legal
fees of the issuer for securities and tax advice, accounting fees for audits
and other representations included in the offering memorandum.
Synfuels: Fuels produced through chemical conversions of natural
hydrocarbon substances such as coal and oil shale.
Synthetic Crude Oil (SCO or Syncrude)): A mixture of hydrocarbons
derived by upgrading (i.e., chemically altering) natural bitumen from
oil sands, kerogen from oil shales, or processing of other substances
such as natural gas or coal. SCO may contain sulfur or other
nonhydrocarbon compounds and has many similarities to crude oil.
Synthetic Gas: Gas produced from solid hydrocarbons such as coal, oil
shale or tar sands.
Glossary of the Oil and Gas Industry and Conversion Factors 73
T
TOP (Take or Pay): Take or Pay is a common provision in gas contracts
under which, if the Buyer's annual purchased volume is less than his
purchase obligation (the Annual Contract Quantity minus any shortfall
in the Seller's deliveries, minus any Downward Quantity Tolerance),
the Buyer pays for such a shortfall as if the gas had been received.
Tank Battery: Group of production tanks in the field that store Crude
Oil.
Tank Bottoms: A mixture of oil, water and other foreign matter that
collects in the bottoms of stock tanks and large crude storage tanks and
must be cleaned or pumped out on a regular basis.
Tax Preference Items: Certain items of income or special deductions
from Gross Income which are given favoured treatment under Federal
Tax Law.
Taxes: Obligatory contributions to the public funds, levied on persons,
property, or income by governmental authority.
TCF: Trillion Cubic Feet.
TCM (Trillion cubic meters)
TD (Total Depth): The maximum depth of a borehole.A well is not
always completed at its TD. The producing horizon may be up hole.
Technical Uncertainty: Indication of the varying degrees of
uncertainty in estimates of recoverable quantities influenced by range
of potential in-place hydrocarbon resources within the reservoir and
the range of the recovery efficiency of the recovery project being
applied.
74
Tenor (Time left for loan repayment or till bond maturity as used in the
finance industry).
Tertiary Recovery: The recovery of oil that involves complex and very
expensive methods such as the injection of steam, chemicals, gases or
heat as compared to primary recovery which involves depleting a
naturally flowing reservoir or secondary recovery, which usually
involves re-pressuring or water flooding.
Therm: A measure of heat content. One therm equals 100,000 btus.
Third for a Quarter: Sometimes also known as a “quarter for a third”. A
widely used arrangement for promoting an oil deal to another party.
Tight Formation: A sedimentary layer of rock cemented together in a
manner that greatly hinders the flow of any gas through the rock.
Tight Hole: A well about which the operator keeps all information
secret.
Tight Sand: A formation with permeability. Gas produced from a
formation so designated by the Federal Energy Regulatory Commission
qualifies for a higher market price.
TIH: Trip In Hole.
Time Value of Money: The concept that a dollar in hand today is worth
more than a dollar that will be received in some future year.
Title: The combination of factors that together constitute legal
ownership of a property.
TOH: Trip Out of Hole.
Tonnes: (A tonne, or metric ton, is a unit of mass equaling 1,000
kilograms. In American English, a ton is a unit of measurement equaling
2,000 pounds. In non-U.S. measurements, a ton (the imperial measure)
equals 2,240 pounds.)
Tool Joints: Heavy duty steel couplings used to connect lengths of drill
pipe.
Tool Pusher: The supervisor of drilling rig operations.
Top Drive: A powered swivel connected directly into the drill stem to
provide the necessary torque for the drill bit. Replaces the
conventional rotary table and hangs from the hook attached to the
traveling block. Allows three lengths of drill pipe to be tripped in and
Glossary of the Oil and Gas Industry and Conversion Factors 75
out at a time, and provides makeup and breakup power for the
assembly of the drill pipe lengths as well. Generally considered to save
time over the rotary table assembly.
Top Lease: A (conditional) type of lease that may be granted by the
mineral rights owner of a property while a pre-existing recorded lease
of that property is nearing expiration but nonetheless, is still in effect.
The top lease would become effective only if and when the existing
lease expires (or is terminated).
Torque: A force that causes or attempts to cause a rotation or torsion.
Total Petroleum Initially-in- Place: Total Petroleum Initially-in-Place
is generally accepted to be all those estimated quantities of petroleum
contained in the subsurface, as well as those quantities already
produced. This was defined previously by the WPC as “Petroleum-in-
place” and has been termed “Resource Base” by others. Also termed
“Original-in-Place” or “Hydrocarbon Endowment.”
Township: A square tract of land six miles on a side. It consists of 36
sections of one square mile each.
TP: Tubing Pressure.
TPA (Third Party Access)
Transfer Rule: When an interest in an oil and gas property already
proven to be capable of commercial production, is transferred. The
transferee taxpayer is generally not entitled to percentage depletion,
although he may still be entitled to cost depletion in computing his
depletion allowance deduction from Gross Income.
Trap: A natural configuration of layers of rock where non-porous or
impermeable rocks act as a barrier blocking the natural upward flow of
hydrocarbons.
Traveling Block: Block hanging from the derrick supporting the drill
string as it “travels” up and down as it raises and lowers the drill string
into the wellbore.
Trip: Making a “trip” is the procedure of pulling the entire string of drill
pipe out of the borehole and then running the entire length of drill pipe
back in the hole.
TSO (Transmission System Operator)
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TTF (Title Transfer Facility)
Tubing (TBG): Small diameter pipe threaded at both ends that is
lowered into a completed well. Oil and gas are produced through a
string of tubing.
Turnkey: A drilling contract that calls for a drilling contractor to drill a
well for a fixed price to a specified depth. The purpose of drilling a well
by turnkey contract may be related to the timing of Federal Income Tax
Deductions. For Income Tax purposes, expenses are deductible from
Gross Income as they are incurred. When a turnkey contract is entered
toward the end of the current tax year, the drilling costs may be pre-
paid at the time. The idea is to give a Working Interest Owner (or
Investor) in the well, the opportunity to deduct the Intangible Drilling
Costs from his Gross Income in the current tax year.
Glossary of the Oil and Gas Industry and Conversion Factors 77
U
Unassociated Gas: Natural Gas that occurs alone, not in solution or as
free gas, with oil or condensate. (See Non Associated Gas)
Uncertainty: The range of possible outcomes in a series of estimates.
For recoverable resource assessments, the range of uncertainty reflects
a reasonable range of estimated potentially recoverable quantities for
an individual accumulation or a project. (See also Probability.)
Unconventional Resources: Petroleum accumulations that are
pervasive throughout a large area and that are not significantly affected
by hydrodynamic influences (also referred to as “continuous- type
deposits”). Examples include coalbed methane (CBM), basin-centered
gas, shale gas, gas hydrate, natural bitumen (tar sands), and oil shale
deposits. Typically, such accumulations require specialized extraction
technology (e.g., dewatering of CBM, massive fracturing programs for
shale gas, steam and/or solvents to mobilize bitumen for in-situ
recovery, and in some cases, mining activities). Moreover, the extracted
petroleum may require significant processing prior to sale (e.g.,
bitumen upgraders).
Underwriter: One who guarantees the sale of securities to investors.
He is at risk to the extent he assumes the responsibility of paying the
Net Purchase Price to the seller at a pre-determined price. He charges a
fee for this service.
Undeveloped Reserves: Undeveloped Reserves are quantities
expected to be recovered through future investments: (1) from new
wells on undrilled acreage in known accumulations, (2) from
deepening existing wells to a different (but known) reservoir, (3) from
78
infill wells that will increase recovery, or (4) where a relatively large
expenditure (e.g., when compared to the cost of drilling a new well) is
required to (a) recomplete an existing well or (b) install production or
transportation facilities for primary or improved recovery projects.
Unitization: Process whereby owners group adjoining properties and
divide reserves, production, costs, and other factors according to their
respective entitlement to petroleum quantities to be recovered from
the shared reservoir(s).
Unproved Reserves: Unproved Reserves are based on geoscience
and/or engineering data similar to that used in estimates of Proved
Reserves, but technical or other uncertainties preclude such reserves
being classified as Proved. Unproved Reserves may be further
categorized as Probable Reserves and Possible Reserves.
Unrecoverable Resources: That portion of Discovered or
Undiscovered Petroleum Initially-in-Place quantities that are
estimated, as of a given date, not to be recoverable. A portion of these
quantities may become recoverable in the future as commercial
circumstances change, technological developments occur, or
additional data are acquired.
Updip Well: A well located high on structure where the oil-bearing
formation is found at a shallower depth.
Upgrader: A general term applied to processing plants that convert
extra-heavy crude oil and natural bitumen into lighter crude and less
viscous synthetic crude oil (SCO). While the detailed process varies, the
underlying concept is to remove carbon through coking or to increase
hydrogen by hydrogenation processes using catalysts.
Upstream: Activities concerned with finding petroleum and producing
it compared to downstream which are all the operations that take place
after production.
Utilization: A measure of the portion of the available rig or vessel fleet,
as applicable, in use during a given period. It is calculated as rig (or
vessel) years divided by total rigs (or vessels) available. For example, if
the equivalent rig (or vessel) years are 100 and the available fleet is
200, the utilization rate is 50%.
Glossary of the Oil and Gas Industry and Conversion Factors 79
V
Vapour Pressure: The pressure exerted by a vapor held in equilibrium
with its solid or liquid state.
Vessel Year: A measure of the number of equivalent vessels operating
during a given period. It is calculated as the number of days vessels are
operating divided by the number of days in the period. For example,
one vessel operating 182.5 days during a 365-day period represents .5
vessel years.
Viscosity (VIS): A fluid's resistance to flowing.
80
W
Wall Sticking: A condition in which a section of the drill string
becomes stuck on deposits of filter cake on the wall of the borehole on a
well.
Water Drive: The most efficient driving mechanism to force oil and gas
out of the reservoir.
Water-Driven Reservoir: A reservoir in which the pressure that
forces the oil to the surface is exerted by edge or bottom water in the
field.
Waterflooding: A secondary recovery method in which water is
injected into a reservoir to force additional oil into the wells.
Well Abandonment: The permanent plugging of a dry hole, an
injection well, an exploration well or a well that no longer produces
petroleum or is no longer capable of producing petroleum profitably.
Several steps are involved in the abandonment of a well: permission for
abandonment and procedural requirements are secured from official
agencies; the casing is removed and salvaged if possible; and one or
more cement plugs and/or mud are placed in the borehole to prevent
migration of fluids between the different formations penetrated by the
borehole. In some cases, wells may be temporarily abandoned where
operations are suspended for extended periods pending future
conversions to other applications such as reservoir monitoring,
enhanced recovery, etc.
Well Program: The procedure for drilling, casing and completing a
well.
81
Wellbore: Physically a wellbore refers to a borehole. In other words, a
completed well.
Wellhead: A device on the surface used to hold the tubing in the well.
The wellhead is the originating point of the producing well at the top of
the ground.
West Texas Intermediate (WTI): Refers to a grade of Crude Oil
produced in the Permian and Midland Basin areas of West Texas. The
price paid for Crude Oil varies according to quality.
Wet (Rich) Gas: Wet gas is natural gas from which no liquids have been
removed prior to the reference point. The wet gas is accounted for in
resource assessments, and there is no separate accounting for
contained liquids. It should be recognized that this is a resource
assessment definition and not a phase behavior definition.
Wet: A reservoir rock is said to be “wet” when it contains water but
little or no hydrocarbons.
Whipstock: A steel blocking device placed in a borehole. As drilling is
resumed, the whipstock forces the drill bit to veer off at a slight angle.
Wildcat: An exploration well drilled to a reservoir from which no oil or
gas has previously been produced in the nearby surrounding areas.
Wildcatter: An operator who drills the first well in unproven territory.
WL: Wire Line.
WOB: Weight on Bit.
WOC: Waiting on Cement.
WOO: Waiting on Orders.
Working Gas Volume: With respect to underground natural gas
storage, Working Gas Volume (WGV) is the volume of gas in storage
above the designed level of cushion gas that can be withdrawn/injected
with the installed subsurface and surface facilities (wells, flow lines,
etc.) subject to legal and technical limitations (pressures, velocities,
etc.). Depending on local site conditions (injection/withdrawal rates,
utilization hours, etc.), the working gas volume may be cycled more
than once a year.
Working Interest (WI): A company's equity interest in a project
before reduction for royalties or production share owed to others
under the applicable fiscal terms.
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Workover: To clean out or work on a well to restore or increase
production. Essentially, it is refurbishment of a well to improve its flow
rate. Workover includes any of several operations on a well to restore or
increase production when a reservoir stops producing at the rate it
should. Many workover jobs involve treating the reservoir rock, rather
than the equipment in the well. Workover jobs typically take a few days
to several weeks to complete.
Workover-Rig: The rig used when oil men try to restore or increase a
well's production.
Write-Off: In common usage, a reduction in Taxable Income that
results when allowable deductions are subtracted from Gross Income.
Glossary of the Oil and Gas Industry and Conversion Factors 83
Z
Zone: A specific interval of rock strata containing one or more
reservoirs. Used interchangeably with“formation”.
Zone Isolation: Sealing off a producing formation while a hole is being
deepened. A special sealant is injected into the formation where it
hardens long enough for the hole to be drilled. Afterward, the
substance again turns to liquid unblocking the formation.
84
Conversion FactorsTemperatureoC = 5/9 (oF -32)oK= oC + 273.15oR = oF + 460
VolumeUnit
Multiplied By Approximate Conversion Factor
Equals Unit
Barrels of oil (bbl)X 42 = US gallons (gal)
Barrels of oil (bbl) X
34.97
=
Imperial gallons (UK gal)
Barrels of oil (bbl) X
0.136
=
Tonnes of oil equivalent (toe)Barrels of oil (bbl) X
0.1589873
=
Cubic meters (m3)Barrels of oil equivalent (boe)
X
5,658.53
=
Cubic feet (f3) of natural gas
Tonnes of oil equivalent (toe)
X
7.33 [1]
=
Barrels of oil equivalent (boe)
Cubic yards (y3) X
0.764555
=
Cubic meters (m3)Cubic feet (f3) X 0.02831685 = Cubic meters (m3)Cubic feet (f3) of natural gas X 0.0001767 = Barrels of oil equivalent (boe)US gallons (gal) X
0.0238095
=
Barrels (bbl)
US gallons (gal) X
3.785412
=
Litres (l)
US gallons (gal) X
0.8326394
=
Imperial gallons
(UK gal)Imperial gallons (UK gal)
X
1.201
=
US gallons (gal)
Imperial gallons (UK gal)
X
4.545
=
Liters (l)
[1] This conversion can range from 6.5 to 7.9 depending on the type of crude oil. This factor is intended to provide an approximation that can be used when the exact factor is unknown.
Mass/WeightUnit Multiplied By
Approximate Conversion Factor
Equals
Unit
Short tons
X
2,000
=
Pounds (lb)
Short tons
X
0.9071847
=
Metric tonnes (t)
Long tons
X
1.016047
=
Metric tonnes (t)Long tons
X
2,240
=
Pounds (lb) Metric tonnes (t) X 1,000 = Kilograms (kg)Metric tonnes (t) X 0.9842 = Long tonsMetric tonnes (t) X 1.102 = Short tonsPounds (lb) X 0.45359237 = Kilograms (kg)Kilograms (kg) X 2.2046 = Pounds (lb)
Length Unit
Multiplied By
Approximate Conversion Factor
Equals
Unit
Miles (mi)
X
1.609344
=
Kilometer (km)
Yards (yd)
X
0.9144
=
Meters (m)
Feet (ft) X 0.3048 = Meters (m)Inches (in) X 2.54 = centimeters (cm)Kilometer (km) X 0.62137 = miles (mi)
Glossary of the Oil and Gas Industry and Conversion Factors 85
AreaUnit
Multiplied By
Approximate
Conversion Factor
Equals
Unit
Acres
X
0.40469
=
Hectares (ha)
Square miles (mi2)
X
2.589988
=
Square kilometers (km2)
Square yards (yd2)
X
0.8361274
=
Square meters (m2)Square feet (ft2) X 0.09290304 = Square meters (m2)
Square inches (in2) X 6.4516 =Square centimeters (cm2)
EnergyEquals Unit
=
Joules (J)
=
Joules (J)
=
Megajoules (MJ)
= British thermal units (Btus)
= Kilocalories (kcal)=
Therms =
Gigajoules (GJ)
=
Kilowatt hours (kWh)
=British Thermal Units (Btus)
Unit Multiplied By Approximate Conversion Factor
British Thermal Units (Btus)
X
1,055.05585262
Calories (cal) X
4.1868
Kilowatt hours (kWh) X
3.6
Therms X 100,000
Tonnes of oil equivalent X 10,000,000 Tonnes of oil equivalent
X
396.83
Tonnes of oil equivalent
X
41.868
Tonnes of oil equivalent
X
11,630
Cubic feet (f3) of natural gas
X 1,025
Approximate Heat Content of Petroleum Products Million Btu (MMBtu) per BarrelEnergy Source MMBtu/bbl Energy Source MMBtu/bblCrude Oil 5.800 Natural Gasoline 4.620
Natural Gas Plant Liquids 3.735 Pentanes Plus 4.620
Asphalt 6.636 Petrochemical Feedstocks:Aviation Gasoline 5.048 Naphtha < 401° F 5.248Butane 4.326 Other oils >= 401° F 5.825Butane-Propane (60/40) Mixture 4.130 Still Gas 6.000Distillate Fuel Oil 5.825 Petroleum Coke 6.024Ethane 3.082 Plant Condensate 5.418 Ethane-Propane (70/30) Mixture 3.308 Propane 3.836Isobutane 3.974 Residual Fuel Oil 6.287Jet Fuel, Kerosene-type 5.670 Road Oil
6.636
Jet Fuel, Naphtha-type 5.355 Special Naphthas
5.248
Kerosene 5.670 Still Gas
6.000
Lubricants 6.065 Unfinished
Oils
5.825
Motor Gasoline - Conventional 5 5.253Unfractionated Stream
5.418
Motor Gasoline - Oxygenated or Reformulated
5.150 Waxes
5.537
Motor Gasoline - Fuel Ethanol 3.539 Miscellaneous
5.796
Source: U.S. Department of Energy, Energy Information Administration (2001)
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Natural Gas Conversion To
Convert
Billion
cubic
metrs
NG
Billion
cubic
feet
NG
Million
tonnes oil
equivalent
Million
tonnesLNG
TrillionBritishthermalunits
Millionbarrels oilequivalent
From
-------------------Multiply
by--------------------
1 billion
cubic
metrs NG
1
35.3
0.90
0.74 35.7 6.60
1 billion
cubic
feet NG
0.028
1
0.025
0.021 1.01 0.19
1million tonnes oil equivalent
1.11
39.2
1
0.82 39.7 7.33
1 million tonnesLNG
1.36 48.0 1.22 1 48.6 8.97
1 trillion Britishthermal units
0.028 0.99 0.025 0.021 1 0.18
1 million barrelsoil equivalent
0.15 5.35 0.14 0.11 5.41 1
LNG Units ConversionUnits 1 metric tonne
= 2204.62 lb.
= 1.1023 short tons
1 kiloliter
= 6.2898 barrels
1 kiloliter
= 1 cubic meter
1 kilocalorie (kcal)
= 4.187 kJ
= 3.968 Btu
1 kilojoule (kJ) = 0.239 kcal = 0.948 Btu
1 British thermal unit (Btu) = 0.252 kcal = 1.055 kJ
1 kilowatt-hour (kWh) = 860 kcal = 3600 kJ = 3412
Other Conversion Factors2acre = 4046.856 m
3acre-ft = 1233.482 matm = 1.01325 bar = 101.325 kPa = 0.101325 MPa= 760 mmHg or 14.696 psi
3 3bbl = 42 U.S gallon = 5.614583 ft = 0.158987 m3 3bbl/acre-ft = 0.128893 m / m
Btu= 10505.056 J =251.996 cal3Btu/ft = 37.259 kJ/ m3
Btu/hr = 0.293071WBtu/lb =2.326 kJ/kgm
Glossary of the Oil and Gas Industry and Conversion Factors 87
-1 -1 -1 -1 -1Btu x lb x F= 1 kcal x kg x K = 4.186800kJ x kg x Km
cal = 4.186800 Jcp = 1m Pa.s
3Darcy = 0.986923 ìmdyn/cm = 1mN/mft = 0.304800 m
2 -2 2ft = 9.290304 X 10 m3 -3 3ft = 2.831685 X 10 m3 3 3ft /bbl = 0.178108 m /m
gallon = 239.65 ton3 -3 3gallon = 3.785412 dm or litre = 3.785412 x 10 m
in = 2.54cm =0.0254 mlb = 0.0005 short tonlb = 0.453592 kgm
3 3lb /ft = 16.018463 kg/mm
mtpa = 134.95 mmscfdmt = 1167.92 litremt = 1000kgpsi =6.894757 kPa = 6894.757 Pa =6.894757 kPascf = 0.028317 scmscm =35.314 scf
Full Meanings of Measurement Units' AbbreviationsoC degree Centigrade/ CelsiusoF degree FahrenheitoK degree KelvinoR degree Rankineatm atmospherebbl barrelboe barrel of oil equivalentbtu british thermal unitcal calorimetercp centipoiseD Darcydyn dyneft footg gramme
CPEEL88
in inchJ Joulelb poundltr litrem metreN NewtonPa Pascalscf standard cubic feetscfd standard cubic feetpeyr dascm standard cubic metret metric tonnev voltW Wattyd yard
Prefices-12p pico, 10
-9n nano, 10-6µ micro, 10
-3m milli 10-2d deci, 10
-1c centi, 103k kilo, 10
6M Mega, 109G Giga, 10
In Volume Measurements3M thousand, 10
6MM million, 109B billion, 10
Glossary of the Oil and Gas Industry and Conversion Factors 89
References
1. U.S. Department of Energy, Energy Information Administration.2. Guidelines for Application of the Petroleum Resources
Management Systems (PRMS), Society of Petroleum Engineers (SPE) - 2011.
3. Understanding Natural Gas and LNG Options, USDOE Power Africa, https://energy.gov/ia/articles/understanding-natural-gas-and-lng-options, October 2016.
4. Nabors Industries Ltd, Glossary of Terms (n.d.) Retrieved from http://media.corporateir.net/media_files/irol/70/70888/pdf/Glossary_of_Drillings_Terms_041805.pdf (accessed on September, 2017).
CPEEL90