Oil & Gas Terminology:
- Acreage - Land leased for oil and gas exploration and/or land for which an E&P company owns the mineral rights
- American Petroleum Institute (API) – The oil and gas industry’s trade organization. API’s research and engineering work provides a basis for establishing operating and safety standard issues and specifications for the manufacturing of oil field equipment and furnishes statistical and other information to related agencies.
- Aquifer - An underground layer of water-bearing permeable rock or unconsolidated materials (gravel, sand, silt or clay) from which groundwater can be extracted using a water well.
- Barrel of oil equivalent (BOE) – A measure used to aggregate oil and gas resources or production, with one BOE being approximately equal to 6,000 cubic feet of natural gas.
- Barrel – The basic unit for measuring oil. A barrel is equal to 42 U.S. gallons.
- BCF – One billion cubic feet of natural gas.
- Bit – A drilling tool that cuts the hole. Bits are designed on two basic and different principles. The cable tool bit moves up and down to pulverize. The rotary bit revolves to grind.
- Bituman – A highly viscous form of crude oil (greater than 10,000 centipoise) resembling cold molasses (at room temperature). Bitumen must be heated or combined with lighter hydrocarbons for it to be produced.
- Blow-Out Preventer – A heavy casinghead control, filled with special gates or rams, which can be closed around the drill pipe, or which completely closes the top of the casing.
- Boyle's Law – A law of physics stating that when gas is subject to compression and kept at a constant temperature, the product of the pressure and volume is a constant quantity, i.e., the volume is inversely proportional to the pressure.
- BTU – British Thermal Unit, a generalized measure of heating value, also used to compare energy potential in different types of fuels.
- Carbon Capture & Storage (CCS) – Process by which carbon dioxide emissions are captured and removed from the atmosphere and then stored, normally via injection into a secure underground geological formation.
- Carbon Sequestration – The fixation of atmospheric carbon dioxide in a carbon sink through biological or physical processes.
- CAPEX – Capital expenditures.
- Casing – Heavy steel pipe used to seal off fluids from the hole or to keep the hole from caving in.
- Casinghead Gas – Gas produced with oil in oil wells. The gas is taken from the well through the casinghead at the top of the well.
- Catalytic Cracking – A refining process for breaking down large, complex hydrocarbon molecules into smaller ones. A catalyst is used to accelerate the chemical reactions in the cracking process.
- Christmas Tree – The assembly of valves, pipes and fittings used to control the flow of oil and gas from the casinghead.
- Coal Bed Methane (CBM) – Natural gas extracted from coal beds.
- Completion – The process of making a well ready to produce natural gas or oil. Completion involves installing permanent equipment, such as a wellhead, and often includes hydraulic fracturing.
- Condensate – Liquid hydrocarbons recovered by surface separators from natural gas. It is also referred to as natural gasoline and distillate.
- Conventional Resource – Discrete accumulations of hydrocarbons contained in rocks with relatively high matrix permeability, which normally have relatively high recovery factors.
- Crude Oil – Liquid petroleum as it comes out of the ground. Crude oil varies radically in its properties, such as specific gravity and viscosity.
- Derrick – A tapering tower, usually of open steel framework, used in the drilling of oil and gas wells as support for the equipment lowered into the well.
- Distillate Fuel Oils – Fuel oils which are products of distillation. They include fuels used for diesel fuel and space heating.
- Development Well – A well drilled within the proved area of an oil or gas reservoir to the depth of a stratigraphic horizon known to be productive.
- Directional Drilling – The drilling of a well that departs materially from the vertical direction.
- Downstream – Those activities in the oil and gas industry which take place away from the source of the supply. Downstream operations commonly include refining and marketing endeavors.
- Drilling Fluids – Special chemical fluids, usually called mud, introduced into the hole to lubricate the action of a rotary bit, to remove the cuttings and to prevent blowouts.
- Drilling Rig – The machine used to drill a wellbore. Dry Gas – Natural gas which does not contain dissolved liquid hydrocarbons.
- Dry Hole – A completed well which is not productive of oil and/or gas or which is not productive of oil or gas in paying quantities.
- Enhanced Recovery – The increased recovery from an oil pool achieved by artificial means or by the application of outside energy sources to the pool.
- Estimated Ultimate Recovery (EUR) – The sum of reserves remaining as of a given date and cumulative production as of that date.
- Exploration – The search for oil and gas. Exploration operations include aerial surveys, geophysical surveys, geological studies, core testing and the drilling of test (wildcat) wells.
- Exploratory Well – A well drilled to find a new field or to find a new reservoir in a field previously found to be productive of oil or gas in another reservoir.
- Farm-in – The acquisition of part or all of an oil, natural gas or mineral interest from a third party.
- Farm-out – The assignment of part or all of an oil, natural gas or mineral interest to a third party.
- Fault Trap – A structural trap in the earth, favorable for the retention of petroleum, formed by the cracking and breaking of a rock plane.
- Flaring – The burning of natural gas for safety reasons or when there is no way to transport the gas to market or use the gas for other beneficial purposes (such as EOR or reservoir pressure maintenance). The practice of flaring is being steadily reduced as pipelines are completed and in response to environmental concerns.
- Formation – A rock layer which has distinct characteristics (e.g. rock type, geologic age).
- Gusher – An oil well that comes in with such great pressure that oil flows out of the well head into the air. Such wells used to be commonplace, but with improved drilling methods, notably the use of drilling mud, gushers are a rarity today.
- Heavy Oil – Crude oil with an API gravity less than 20°. Heavy oil generally does not flow easily due to its elevated viscosity.
- Horizontal Drilling – A method of drilling where the drill bit is turned in a horizontal direction in an effort to produce hydrocarbons from a number of areas located at the same approximate depth.
- Hydraulic Fracturing – Hydraulic fracturing (or fraccing) is an essential completion technique in use since the 1940s that facilitates production of oil and natural gas trapped in low-permeability reservoir rocks. The process involves pumping fluid at high pressure into the target formation, thereby creating small fractures in the rock that enable hydrocarbons to flow to the wellbore.
- Hydrocarbons – An organic compound containing only carbon and hydrogen and often occurring in nature as petroleum, natural gas, coal and bitumens or in refined products such as gasoline and jet fuel.
- Improved Oil Recovery – Term used to describe methods employed to improve the flow of hydrocarbons from the reservoir to the wellbore or to recover more oil or natural gas. Enhanced oil recovery (EOR) would be one form of IOR.
- Infill Wells – Wells drilled into the same reservoir as known producing wells so that oil or natural gas does not have to travel as far through the formation, thereby helping to improve or accelerate recovery.
- Independent – A company involved only in the exploration and production of oil and gas and possibly in the transportation. An independent will not be involved in the refining of oil.
- In-Situ Recovery – Techniques used to extract hydrocarbons from deposits of extra-heavy crude oil, bitumen or oil shale without removing the soil and other overburden materials.
- Injection well – A well employed for the introduction into an underground stratum of water or gas under pressure. Injection wells are employed for the disposal of produced water from oil and gas wells.
- Integrated Company – A company involved in virtually all aspects of the oil and gas industry including exploration, production, transportation, refining and marketing. These companies are also referred to as major oil companies.
- Lease – The instrument by which a leaseholder or working interest is created in minerals.
- LNG – Liquefied natural gas. Natural gas becomes a liquid at a temperature of minus 258 degrees F and may be stored and transported in the liquid state.
- MBBL – One thousand barrels of crude oil, bitumen, condensate or natural gas liquids.
- MBOE – One thousand barrels of oil equivalent.
- MCF – Thousand Cubic Feet. The standard unit for measuring the volume of natural gas.
- MMCF – One million standard cubic feet of natural gas. In the United States, standard conditions are defined as gas at 14.7 psia and 60oF.
- Natural Gas – Hydrocarbons, which at atmospheric conditions of temperatures and pressure, are in a gaseous phase.
- Natural Gas Liquids (NGL’s) – Hydrocarbons found in natural gas which may be extracted or isolated as liquefied petroleum gas and natural gasoline.
- OCS – The Outer Continental Shelf. Generally the area outside the territorial boundaries of the coastal state over which the federal government exercises control.
- Oil Field – An area which is underlain by one or more reservoirs containing oil.
- Oil Pool – An underground reservoir or trap containing oil.
- Oil Sands – Geologic formation comprised predominantly of sand grains and bitumen, a highly viscous form of crude oil.
- Operator – The entity responsible for managing operations in a field or undeveloped acreage position.
- Overboard Water – Another name for produced water or brine produced from oil and gas wells.
- Permeability – The permeability of a rock is the measure of the resistance to the flow of fluid through the rock. High permeability means fluid passes through the rock easily.
- Play – An area in which hydrocarbon accumulations or prospects with similar characteristics occur, such as the Lower Tertiary play in the deepwater Gulf of Mexico or the Marcellus play in the eastern United States.
- Platform – Structure used in offshore drilling on which the drilling rig, crew quarters and other related items are located.
- Plugging of Well – The sealing off of the fluids in the stratum penetrated by a well so that the fluid from one stratum will not escape into another or to the surface.
- Porosity – The measure of a rock’s ability to hold a fluid. Porosity is normally expressed as a percentage of the total rock which is taken up by pore space.
- Possible Reserves – Additional reserves that are less certain to be recovered than probable reserves.
- Probable Reserves – An estimate of reserves taking into consideration known geology, previous experience with similar types of reservoirs and seismic data, if available.
- Processing Plant – A plant to remove liquefiable hydrocarbons from wet gas or casinghead gas. This process yields the propanes, butanes and other products taken from natural gas.
- Produced Water – Water produced in connection with oil and natural gas exploration and development activities.
- Proppant – Sand or man-made, sand-sized particles pumped into a formation during a hydraulic fracturing treatment to keep fractures open so that oil and natural gas can flow through the fractures to the wellbore.
- Proven Reserves – Oil which is still in the ground, but which has been located and determined to be recoverable.
- Recomplete - To move the primary completion from one zone to another. May involve reperforating, running other tubulars or setting a new packer.
- Reserves - Estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in production, installed means of delivering oil and gas or related substances to market and all permits and financing required to implement the project.
- Refinery – The facility where the characteristics of petroleum or petroleum products are changed.
- Reservoir – A porous and permeable sedimentary rock containing commercial quantities of oil and gas. Three types of reservoirs are encountered including structural traps, stratigraphic traps and combination traps.
- Rig – The structures and equipment used in drilling an oil and gas well including the derrick, engine, engine house and other equipment. Roughneck – A driller's helper and general worker on a drilling rig.
- Royalty – The landowner's share of production, before the expenses of production.
- Severance Tax – A tax on the removal of minerals from the ground. The tax can be levied either as a tax on volume or a tax on value. In Louisiana oil is taxed at 12.5 percent of value. Natural gas is taxed at 7 cents per MCF with the rate adjusted annually to reflect the changes in the spot market price of gas sold in Louisiana.
- Shale – A very fine-grained sedimentary rock that is formed by the consolidation of clay, mud or silt and that usually has a finely stratified or laminated structure. Certain shale formations, such as the Eagle Ford and the Barnett, contain large amounts of oil and natural gas.
- Shut In – To close down a producing well temporarily for repairs, cleaning out, building up reservoir pressure, lack of market, etc.
- Sour Gas – Natural gas contaminated with chemical impurities, notably hydrogen sulfide or other sulfur compounds, which cause a foul odor. Spacing – The distance between wells producing from the same reservoir. Spacing is often expressed in terms of acres (e.g. 80-acre spacing) and is often established by regulatory agencies.
- Specific Gravity – In the case of liquids, the ratio between the weight of equal volumes of water and another substance, measured at standard temperature and where the weight of the water is assigned a value of 1. However, the specific gravity of oil is normally expressed in the industry in degrees of API gravity.
- Spudding In – The first boring of the hole in the drilling of an oil well.
- Steam-Assisted Gravity Drainage (SAGD) – The process used to recover bitumen that is too deep to mine. A pair of horizontal wells is drilled from a central well pad. In a plant nearby, steam generators heat water and transform it into steam. The steam then travels through above-ground pipelines to the wells. It enters the ground via the steam injection well and heats the bitumen to a temperature at which it can flow by gravity into the producing well. The resulting bitumen and condensed steam emulsion is then piped from the producing well to the plant, where it is separated and treated. The water is recycled for generating new steam.
- Stripper Production – The final stage of production in the life of an oil well or oil field. This stage is characterized by low rates of production, sometimes no more than a barrel of oil per day.
- Sweet Gas – Natural gas that contains little or no hydrogen sulfide.
- TCF – One trillion cubic feet of natural gas.
- Tight Gas – Natural gas produced from relatively impermeable rock. Getting tight gas out usually requires enhanced technology applications like hydraulic fracturing. The term is generally used for reservoirs other than shale.
- Tension Leg Platform – A type of platform generally used in deep waters. Instead of a stationary platform attached to the ocean floor, the surface platform is tethered to a templet on the ocean floor by flexible steel tendons.
- Unconventional Reserves – Activities Reservoirs with permeability so low (generally less than 0.1 millidarcy) that horizontal hydraulically fractured stimulated wells or other advanced completion techniques must be utilized to extract hydrocarbons at commercial rates. Shale reservoirs such as the Eagle Ford and Barnett, as well as tight reservoirs like the Bakken and Three Forks, both are examples of unconventional reservoirs.
- Undeveloped Acreage – Acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and gas regardless of whether or not the acreage contains proved reserves.
- Upstream – Activities in the oil and gas industry which take place close to the supply. This normally includes exploration and production activities.
- Waterflood – An improved oil recovery technique that involves injecting water into a producing reservoir to enhance movement of oil to producing wells.
- Well – A hole drilled in the earth for the purpose of finding or producing crude oil or natural gas or providing services related to the production of crude oil or natural gas.
- Wellhead – A term usually defined as being at the Christmas Tree but, which under exceptional circumstances, may be defined as located at some other place.
- Wellhead Revenues – The total dollar value of crude oil and natural gas at the wellhead. Wellhead revenues are calculated, based on the production volumes of crude oil and natural gas, multiplied by their respective average wellhead price.
- Wet Gas – Natural gas containing liquid hydrocarbons in solution, which may be removed by a reduction of temperature and pressure or by a relatively simple extraction process.
- Wildcat Well – An exploratory well being drilled in unproven territory, that is, in a horizon from which there is no production in the general area.
- Work Overs – Operations on a producing well to restore or increase production. A typical work over is cleaning out a well that has sanded up (typically using a service rig or coiled tubing).
- Working Interest – The right granted to the lessee of a property to explore for, produce and own oil, gas or other minerals. The working interest owners bear the exploration, development and operating costs.