Glossary of Terms
Bbl - One stock tank
barrel, or 42 U.S. gallons liquid volume, used herein in reference to
crude oil or other liquid hydrocarbons.
Bcf - One billion cubic feet
BOE - Equivalent barrels of oil. In reference to natural gas,
natural gas equivalents are determined using the ratio of six Mcf of
natural gas to one Bbl of crude oil, condensate or natural gas liquids.
Bopd - Barrels of oil per day.
Btu - One British thermal unit. The quantity of heat required
to raise the temperature of one pound of water one degree Fahrenheit.
Crude Oil - Oil removed from the ground before it is processed.
DD&A - Depreciation, depletion, and amortization.
Developed Acreage - The number of acres which are allocated or
assignable to producing wells or well capable of production.
Development Well - A well drilled within the proved area of an
oil or gas reservoir to the depth of a stratigraphic horizon known to
Dry Gas - Gas that contains very low amounts of natural gas liquids.
Dry Hole or Dry Well - A well found to be incapable of producing
either oil or gas in sufficient quantities to justify completion of an
oil or gas well.
Exploratory Well - A well drilled to find and produce oil or gas
in an unproved area, to find a new reservoir in a field previously found
to be productive of oil or gas in another reservoir, or to extend a known
Farmin - An arrangement whereby one oil operator "buys in" or
acquires an interest in a lease or concession owned by another operator
on which oil or gas has been discovered or is being produced.
Finding Costs - The capital costs associated with finding and
developing oil and gas reserves.
Formation - An identifiable single geologic horizon.
Fracture stimulation (frac) - Action taken to increase the inherent
productivity of a prospective formation through the hydraulic injection
of water, diesel, or CO2 at high pressures and high rates.
Gross Acres or Gross Wells - The total acres or wells, as the
case may be, in which a working interest is owned.
Horizontal Wells - Wells which are drilled at angles greater than
70 from vertical.
Independent Producer - An energy company, usually in the exploration
and production segment of the industry, with no marketing, transportation
or refining operations.
Infill drilling - 1) Wells drilled to fill in between established
producing wells on a lease; 2) A drilling program to reduce the spacing
between wells in order to increase production from the lease.
Mbbl - One thousand barrels of crude oil or other liquid hydrocarbons.
MBOE - One thousand barrels of oil equivalent.
MMBbls - One million barrels of oil equivalent.
Mmbtu - One million btu¬s.
Mcf - One thousand cubic feet.
Mmcf - One million cubic feet. Often used to describe a well¬s
production per day as MMcf/d.
Net Acres or Net Wells - The sum of the fractional working interests
owned in gross acres or gross wells.
Payzone - The producing formation(s) of a well.
Present Value of Estimated Future Net Revenues or PV-10 Value -
The present value of estimated future net revenues is an estimate of
future net revenues from a property at its acquisition date, at a specified
date, after deducting production and ad valorem taxes, future capital
costs and operating expenses, but before deducting federal income taxes.
The future net revenues have been discounted at an annual rate of 10%
to determine their “present value”. The present value is shown to indicate
the effect of time on the value of the revenue stream and should not
be construed as being the fair market value of the properties. Estimates
have been made using constant oil and natural gas prices and operating
costs at a specified date.
Productive Well - A well that is producing oil or gas that is
capable of production.
Proved Developed Reserves - Reserves that can be expected to be
recovered through existing wells with existing equipment and operating
Proved Reserves - The estimated quantities of crude oil, natural
gas and natural gas liquids with geological and engineering data demonstrate
with reasonable certainty to be recoverable in future years from known
reservoirs under existing economic and operating conditions.
Proved Undeveloped Reserves - Reserves that are expected to be
recovered from new wells on undrilled acreage, or from existing wells
where a relatively major expenditure is required for recompletion.
psig - pounds per square inch gauge (as observed on a gauge).
Royalty Interest - An interest in an oil and gas property entitling
the owner to a share of oil and gas production free of costs of production.
Spud - To start the actual drilling of a well.
3-D Seismic - Advanced technology method of detecting underground
structures with the potential for accumulations of hydrocarbons identified
by the collection and measurement of the intensity and timing of sound
waves transmitted into the earth as they reflect back to the surface.
Undeveloped Acreage - Lease acreage on which wells have not been
drilled or completed to a point that would permit the production of commercial
quantities of oil and gas regardless of whether such acreage contains
Wet Gas - Unprocessed natural gas or partially processed natural
gas produced from geological strata containing condensable hydrocarbons.
Also gas rich in natural gas liquids.
Wildcat Well - The popular name for an exploratory well.
Working Interest - The operating interest which gives the owner
the right to drill, produce and conduct operating activities on the property
and a share of production.