| TERM |
DEFINITION |
| 3-D Seismic |
Technology that bounces sound waves off underground rock formations and processed to create a three-dimensional picture of the subsurface. Identifies rock formations most likely to contain accumulations of oil and gas. |
| BCF |
Billion cubic feet |
| BCFE |
Billion cubic feet (of gas) equivalent |
| Bbl |
Barrel of oil |
| BOE |
Barrel of oil equivalent. A method of equating oil, gas and natural gas liquids. Gas is converted to oil based on its relative energy content at the rate of six Mcf of gas to one barrel of oil. Natural gas liquids are converted based upon volume where one barrel of natural gas liquids equals one barrel of oil. |
| Capital Contributions |
The total investment in the Well by a Participant or by all Participants, as the case may be. |
| Code |
The Internal Revenue Code of 1986, as amended. |
| Completion Costs |
The costs incurred after Casing Point to complete the well either as a dry hole (plug) or as a producing well. |
| Development Well |
A well drilled within a proven area of an oil and gas reservoir to the depth of a stratigraphic horizon known to be productive, but which may or may not be present at the site of the well. |
| Downdip |
A term used in a hydrocarbon reservoir that is not flat, i.e., a dipping formation. In such a formation, oil is found downdip from the gas. |
| Dry Hole |
A well that does not provide oil or gas in sufficient quantities to justify completion. |
| Enhanced Recovery |
Techniques used to increase or prolong production from oil and natural gas fields. |
| Exploratory Well |
A well drilled to find and produce oil or gas in an unproven area, to find a new reservoir in a field previously found to be productive of oil and gas in another reservoir, or to extend a known reservoir. |
| Fee Land |
The most extensive interest that can be owned in land, including surface and mineral (including oil and gas) rights. |
| Field Formation |
A geographical area with one or more oil and gas reservoirs. An identifiable layer of rocks named after its geographical location and dominant rock type. |
| "Frac", or fracturing |
A well is "fraced" to stimulate or prolong oil & gas production. Special fluids are pumped into a wellbore with powerful hydraulic pumps to cause enough pressure to crack or fracture the formation. This process creates a plane of high-permeability sand, which usually allows the hydrocarbons to flow more freely into the wellbore. |
| Full
Cycle Economics |
Current year cash margin (reserves less current year operating and administrative
costs) minus 5-year finding cost. |
| Gross
Acres |
The
total number of acres in which the company owns a working interest. |
| Gross
Well |
A well in which a working interest is owned. |
| Injection
Well |
A well where gas or water is injected back into the reservoir, usually
to increase pressure and thereby stimulate production. In a gas injection
well, gas is reinjected into the upper gas portion of the reservoir. Water
injection wells are typically found offshore. |
| Intangible
Drilling Costs |
Those items of costs relating to drilling, testing and completion operations
on the Well which are not Tangible Costs. |
| Landowner's
Royalty |
The
interest customarily retained under an oil and gas lease by the person
who has the power to grant an oil and gas lease and which bears no part
of the cost of drilling or producing the oil and natural gas. |
| Lease |
A legal contract that specifies the terms of the business relationship
between an energy company and a landowner or mineral rights holder on
a specific tract. |
| MCFE |
Thousand cubic feet (of gas) equivalent |
| MMBOE |
Million barrels of oil equivalent |
| Mcf |
A standard measurement unit for volumes of natural gas that equals one
thousand cubic feet. Six Mcf of natural gas is approximately the energy
equivalent of one barrel of oil. |
| MMcf |
Million cubic feet |
| Mud,
or drilling mud |
A
specialized mixture of fluids and solids, or liquid and gaseous fluids,
used in drilling wellbores. There are many types of these drilling fluids,
usually categorized by the major component such as water-base drilling
fluid, gyp mud, emulsion mud, etc. |
| Net
Acres |
Gross acres multiplied by the fractional working interest in the property.
|
| Net
Revenue Interest |
The amount of the interest owned in the proceeds derived from a producing
well less all Royalty interests. |
| Offering
|
The
offering of Working Interest Participation for the purpose of drilling
and potentially completing the Wells. |
| Overriding
Royalty Interest |
A royalty interest which is typically retained by geologists or third
parties which interest bears no part of the cost of drilling, completing
or operating the well. |
| Pay
Zone |
The target of any drilling operation--a reservoir containing hydrocarbons
that can be recovered in enough quantity to "pay" an income.
|
| Perforate,
or "perf" |
"Perfing"
a well means to create holes in the casing or liner of the wellbore through
which oil and gas flows from the reservoir up to the surface. Perforation
is accomplished with a perforating gun containing strategically placed
explosive charges that is lowered into the wellbore. |
| Production |
Total production refers to all the oil and gas produced from a property.
Gross Production: Total production before deducting royalties. Net Production:
Gross production, minus royalties, multiplied by the company's fractional
working interest. |
| PV10
Value |
Pre-tax
present value of estimated future net revenues discounted at 10% using
SEC guidelines. |
| Recompletion |
The modification of an existing well for the purpose of producing oil
or gas from a different producing formation. |
| Reserves
|
Oil
or gas contained in underground rock formations called reservoirs. Proved
reserves are the estimated quantities that geologic and engineering data
demonstrate can be produced with reasonable certainty from known reservoirs
under existing economic and operating conditions. Recoverable reserves
are those that can be produced using all known primary and enhanced recovery
methods. |
| 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 exploration, development and
production. |
| Tangible
Costs |
Those items of costs which in themselves have a salvage value and are
ordinarily required to be capitalized for federal income tax purposes
and which relate to the equipment placed on the Well. |
| Turnkey |
A drilling contract that calls for a drilling contractor to drill a well,
for a fixed price, to a specified depth and to adequately equip it so
that the well is able to produce oil or gas. |
| Updip |
A term used in a hydrocarbon reservoir that is not flat, i.e., a dipping
formation. In such a formation, gas is found updip from the oil. |
| Waterflood
|
A
method of increasing oil recovery from an existing reservoir. Water is
injected to force unrecovered oil out of reservoir rock and into nearby
oil wells. |
| Working
Interest |
The
interest in an oil and gas leasehold which is subject to the payment of
the expenses of development, operation and maintenance of a well and is
subject to the payment of Landowner's Royalty and Overriding Royalty Interests. |
| Workover |
To repair or stimulate an existing production well to restore or increase
production. |
