Oil & Gas Glossary : Back to Resources
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from the following oil and gas
and related investment terms
for their definition.
contract - A (long-term) contract between a gas
producer and a gas purchaser, such as a pipeline transmission
company. ^ top...
bottoms - A mixture of oil, water, and other foreign
matter that collects in the bottoms of stock tanks and large
tanks and must be cleaned or
pumped out on a regular basis. ^ top...
An ocean going ship which hauls crude oil. ^ top...
sand - A sandstone in which the spaces between grains are filled
with a highly viscous tar. ^ top...
sands - Rocks (other than coal or oil shale) that
contain highly viscous hydrocarbons that are unrecoverable
by primary production
methods. ^ top...
preference items - Certain items of income, or special deductions
from gross income which are given favored treatment under Federal
tax law. ^ top...
Trillion cubic feet. ^ top...
map - A geologic map showing the structure of the earth's
crust. ^ top...
1. A permit issued by a regulatory body for the transportation
of oil or gas. 2. A barge or
small ship that serves as a supply ship and/or storage facility
for an offshore rig. ^ top...
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 repressuring or waterflooding. ^ top...
A measure of heat content. One therm equals 100,000 Btus. ^ top...
for a quarter - Sometimes also known
as a "quarter for
a third". A widely used arrangement for promoting an oil
deal to another party. ^ top...
formation - A sedimentary layer of rock cemented together
in a manner that greatly hinders the flow of any gas through the
rock. ^ top...
hole - A well about which the operator keeps all
information secret. ^ top...
sand - A formation with low permeability. Gas produced from
a formation so designated by the Federal Energy Regulatory Commission
qualifies for a higher market price. ^ top...
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. ^ top...
Title - The combination of factors that, together, constitute legal
ownership of a property. ^ top...
pusher - The supervisor of drilling rig operations. ^ top...
lease - A (conditional) type of lease that may
be granted by the mineral-rights owner
of a property while an
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). ^ top...
depth (TD) - The maximum depth of a borehole. ^ top...
A square tract of land six miles on a side, it consists
of 36 sections of one square
mile each. ^ top...
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. ^ top...
A natural configuration of layers of rock where non-porous
or impermeable rocks acts as
a barrier, blocking the natural upward flow of hydrocarbons. ^ top...
Making a "trip" is
the procedure of pulling
the entire string of drill pipe out of the borehole and
the entire length of drill
pipe back in the hole. ^ top...
Small diameter pipe, threaded at both ends, that is lowered
into a completed well. Oil
and gas are produced through a string of tubing. ^ top...
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 into toward
the end of the current tax year, the drilling costs may
be pre-paid at that 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. ^ top...
(Ultralarge crude carrier) - A large tanker built
especially to carry 500,000 dwt and up of crude oil. ^ top...
gas - Natural gas that occurs alone, not in solution
or as free gas with oil or
condensate. ^ top...
One who guarantees the sale of securities to investors.
He is at risk to the extent he assumes the responsibility
the net purchase price to the
seller at a pre-determined price. He charges a fee for this
service. ^ top...
recoverable resources - Resources outside of known
fields, estimated from broad geologic knowledge and theory.
well - A well located high on a structure where
the oil-bearing formation is found at a shallower depth. ^ top...
Activities concerned with finding petroleum and producing
it, compared to downstream
which are all the operations that take place after production. ^ top...
pressure - The pressure exerted by a vapor held
in equilibrium with its solid or liquid state. ^ top...
Viscosity - A fluid's resistance to flowing. ^ top...
(very large crude carrier) - A tanker built to
carry 200,000 to 350,000 dwt of crude oil. ^ top...
sticking - A condition in which a section of the
drillstring becomes stuck on deposits of filter cake on
the wall of the borehole
in a well. ^ top...
assets - Assets that will eventually lose their
value. ^ top...
drive - The most efficient driving mechanism to
force oil and gas out of the reservoir. ^ top...
reservoir - A reservoir in which the pressure that
forces the oil to the surface
is exerted by edge or bottom
water in the field. ^ top...
A secondary recovery method in which water is injected into
a reservoir to force additional oil into the wells. ^ top...
platform - An offshore structure that supports a well's surface
controls and flow piping.
program - The procedure for drilling, casing, and
completing a well. ^ top...
Physically, wellbore refers to a borehole, in other words
a completed well. ^ top...
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. ^ top...
Texas Intermediate - 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. ^ top...
A reservoir rock is said to be "wet" when it contains
water but no hydrocarbons. ^ top...
gas - Natural gas containing liquid hydrocarbons
- commonly condensate.
Whipstock - A steel blocking device place in a borehole. As drilling
is resumed, the whipstock forces the drill bit to veer off at a
slight angle. ^ top...
An exploration well drilled
to a reservoir, from which no oil or gas has previously
been produced in the nearby surrounding
area. ^ top...
An operator who drills the first well in unproven territory. ^ top...
interest - An interest created by the execution of an oil
and gas lease.
To clean out or work on a well to restore or increase production. ^ top...
rig - The rig used when oilmen try to restore or increase
a well's production. ^ top...
In common usage: a reduction in taxable income that results
when allowable deductions are subtracted from gross income. ^ top...
X, Y, Z
A specific interval of
rock strata containing
one or more reservoirs,
with "formation." ^ top...
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. ^ top...