An association of two or more persons or companies to drill, develop, and operate jointly owned property(ies).  Each owner has an undivided interest in the property(ies).

A single length of drill pipe, casing, etc., usually from 20 to 30 feet in length.

An agreement between two or more lease owners providing for the operation of a lease in which one operates the lease with all owners sharing in the cost.

Deal formed in which a number of unprotected gamblers all pitch in money to obtain a working interest.

A processing agreement where the producer receives 100 percent of the attributable residue gas and consideration for the attributable plant volume reduction (PVR).  The payment for the PVR can be either equivalent BTU's of additional residue gas or a gas payment.  The processor will generally keep 100 percent of the liquids extracted as payment for processing.

The heavy square or hexagonal steel member which is suspended from the swivel through the rotary table and connected to the drill pipe to turn the drill string.

To stop formation fluids (usually under dangerous high pressure) from coming up a well.  The stopping process uses mud (sometimes water) rather than closing wellhead valves.

An automatic device for moving and measuring oil from lease storage to the pipeline.  This requires a pump, an oil meter, and a BS&W measuring device.

A person employed by an E&P company responsible for identifying, negotiating, acquiring, retaining, or disposing of oil and gas leases and managing the company's land department.  The term also refers to an independent broker for identifying, negotiating, and acquiring leases.  The term Landman, whether referring to a male or female, continues to be more commonly used than the term Landperson.

(1) A contract in which the owner of minerals gives an E&P company temporary and limited rights to explore for, develop, and produce minerals from the property. (2) Any transfer where the owner of a mineral interest assigns all or part of the operating rights to another party but retains a continuing non-operating interest in production from the property.  

The up front payment to Landowner to convince him to lease the mineral rights to the operator (consideration).

A person or company in which leases are taken to disguise their ownership.

Pipelines that transport production from a single lease to a storage plant.

Lease Operating Expenses are the expenses associated with operating an oil and gas lease.

Gas or natural gasoline used at the well site to operate production equipment.

Capital investment in items of equipment having a potential salvage value and used in a well or on a lease.  Such items include the cost of casing, tubing, wellhead assemblies, pumping units, lease tanks, treaters, and separators

Synonymous with working interest.

A person entitled under an oil or gas lease to exploit the mineral deposits.

The owner of the mineral rights who has executed a lease.

Costs of operating wells for the production of oil and gas (producing costs).

A description of crude oil indicating high API gravity and low sulfur content.

Form of a deal in which the limited partners have limited liability and the general partner is help responsible.

Natural gas that has been condensed to a liquid, typically by cryogenically cooling htegas to minus 327.2 degrees Farenheit (below zero).

Ethane, Ethylene, propane, propylene, normal butane, butylene, and isobutane produced at refineries or natural gas processing plants, including plants that fractionate raw natural gas plant liquids.

The site for a well to be drilled or at which a well has been drilled.

The taking and recording of physical measurements about formations being drilled.

Substances used to reduce friction between bearing surfaces or incorporated into other materials. Petroleum lubricants may be produced either from distillates or residues. Lubricants includes all grades of lubricating oils from spindle oil to cylinder oil and those used in greases.

Merger and Acquisition

An instrument measuring the magnetic fields of the earth.

Gas taken in a later period that was paid for previously under a Take-or-Pay contract.

Consists of hoisting the drilling string out of and returning it into the wellbore.

A well whose production is so limited that it is marginally profitable to operate.

Choice of an NRI or Royalty Owner of taking his production in kind as opposed to a revenue distribution.

An instrument that is used to determine molecular weights and relative abundances of isotopes in a substance.  The molecular components are ionized and disassociated by electronic bombardment.  The positive ions are then accelerated in an electric field and separated magnetically by mass.  A mass spectrometer is often used for gas analysis because it is fast and accurate.  It can determine the amount of methane, ethane, propane, isobutane, N-butane, pentanes, hexanes, heptanes, and heavier hydrocarbons along with carbon dioxide, hydrogen sulfide, nitrogen, and helium content.  The mass spectrometer can be used to calculate the Btu content of the gas.

The series of fissures and cracks in coal in which methane resides.

MCF-The standard measure of volume for natural gas; 1,000 cubic feet.

MMCF- The abbreviation for 1,000,000 cubic feet of gas used to measure large quantities

MCFD- Thousand Cubic Feet Per Day

MCFE- MCF Equivalent-the amount of energy produced by oil equated to gas 6:1.

Million Bristish Thermal Units- the basic unit of gas sales.

Meter accuracy factor usually determined through a meter proving process.

Rocks developed as a result of sedimentary rocks subjected to heat and pressure.

The part of energy concerned with the gathering, marketing, and transportation of hydrocarbons.

The nature of oil and gas to move.

Economic interest in underground minerals (such as a mineral right, working interest, or ORRI).

Rights of ownership, conveyed by deed, of gas, oil, and other minerals beneath the surface.

An obligation of a lessee to periodically pay the lessor a fee sum of money after production occurs, regardless of the amount of production.  Such minimum royalty may or may not be chargeable against the royalty owner's share of future production.

A tertiary recovery process similar to a water flood but involving the injection of a solvent that mixes with crude oil.

Either (1) a small land rig mounted on a truck (used for shallow wells) or (2) a drilling rig used offshore that can be floated from one drill site to another.  Drill ships, jack-ups, and semi-submersibles are mobile rigs.

A hole drilled under the derrick floor and temporarily cased in which a length of drill pipe is temporarily suspended for later connection to the drill string.

Drilling fluid circulated through the drill pipe and back to the surface during rotary drilling and workovers.

A well with more than one reentry drilled through its sides.

A well producing oil and/or gas from different zones at different depths in the same well bore with separate tubing strings for each zone.  This is different from a commingled well which uses just one tubing string.

Hydrocarbons that exist in the gaseous phase under certain atmospheric and temperature conditions.

Condensate. NGL's recovered from natural gas in gas processing plants,and in some situations, from natural gas facilities. Natural gas liquids extracted by fractionators are also included. These liquids are classified as follows butane, isobutane, pentanes plus, and other products.

Number of acres times the fractional interest in the acreage.

The method of pricing oil or gas by subtracting transportation costs (and sometimes processing and refining costs) from the downstream price received for the oil or gas.

The sale of produced wet natural gas for a price determined in part by proceeds from sale of extracted NGL.

An interest in production created from the working interest and measured by a certain percentage of the net profits (as defined in the contract) from the operation of the property.

For the full cost ceiling, the proceeds of an oil or gas sale less the production and severance taxes, marketing and transportation cost, royalties and overriding royalties, and operating expenses.

The aggregate of fractional interests an owner has in more than one well.  (See GROSS WELLS).

Subtacting expenses from revenue for a working interest owner.

A well drilled in an area where previously there had been no production of oil or gas.

The anticipated volume a producer expects to produce into a pipeline in the next month as communicated to the pipeline company for confirmation.  Nominations are changed and confirmed as necessary.

Natural gas (usually dry) not in contact with crude oil in a reservoir.

Option by working interest owner defined in the JOA which allows non-participation and imposes a penalty for doing so.

An interest in a mineral property whose life is limited in terms of dollars, units of product, or time.

An interest in minerals for which the holder does not have the responsibility to bear the cost of developing and producing the minerals.  Examples are royalties, overriding royalties, and volume production payments.

A company that takes a part of a deal and may or may not bill it out to other parties.

A tort in which a mineral owner is prevented from producing his minerals.

Operator must drill a well within a certain time period or is subject to penalty.

(1) Well drilled on a well spacing unit adjacent to a producing well spacing unit.  (2) Well drilled on a lease to minimize drainage of reserves by well(s) on an adjacent lease.

Liquid Hydrocarbon

An underground reservoir containing oil in the sedimentary rocks.

Any porous reservoir containing oil, generally referring to a sandstone reservoir.  The term oil sands may refer to formations close to the surface containing heavy hydrocarbons whereby the sands are mined and processed to produce synthetic crude oil.  Oil sands mining is largely conducted in northeastern Alberta.

Areas where tiny amounts of petroleum have migrated to the surface.

A well which can and does produce crude oil with minimal natural gas.  Usually state regulations would classify a well as an oil well (as opposed to being a gas well) if it produced less than 15 mcf per barrel of oil.

That depth, generally between 7500 feet and 15000 feet beneath the surface, in which oil can be formed due to temperature and pressure.

Uncased part of a well.

An instrument defining the rights and obligations of the co-owners of the working interest of a lease in connection with the joint development and operation of the lease.

An E&P joint venture participant that manages the joint venture, pays venture costs and bills the venture's non-operators for their share of venture costs.

An instrument commonly used to measure the volume of flowing natural gas in a pipe.

A well drilled outside well locations offsetting a producing well but within the possible or probable extent of the reservoir.

A royalty interest that is created out of the operating or working interest.  Its term is coextensive with that of the operating interest from which it was created.

Plug and Abandon. The end of a well.

Production

Pak Accounting defines oil and gas partnerships as partnerships for tax purposes (K-1’s) not joint operations partnerships.  Once the partnership is set up, transactions are recorded at the partnership level within the partnership’s books.  Capital applications are recorded at the owner level. Owners in multiple partnerships retain the ability to net at partnership level instead of owner level.

Oil or gas saturated rock capable of producing oil or gas.

The condition at which the revenues to a given interest in a well equal all land, acquisition, drilling, completing and operating costs allocated to that interest.

Oil or gas saturated rock capable of economically viable production.

The theory that at some point in time. oil production will/has peak/peaked and is in a long slow decline.

A deduction for Federal income tax purposes based on the gross income from mineral properties.  Percentage depletion is in lieu of cost depletion.  Also known as statutory depletion.

The process of venting the casing so that oil can flow in and be produced.

The measure of the ease with which oil can move through a reservoir.

Oil or gas obtained from the rocks of the earth, usually by drilling down into a reservoir rock and producing them to the surface.

Pipelines that transport refined product from refineries to terminals and bulk plants.

A scraping instrument for cleaning a pipeline.

A means of transporting natura lgas, oil, and refined product.

Avoiding pipeline penalties for under or over producing by borrowing gas from or lending gas to other producers.

Inventory in a pipeline between the shipping and receiving tanks in the pipeline system.

An expression, often abbreviated P&A, describing the act of placing plugs in a dry hole, then abandonment.

To seal off a lower formation in a well bore in order to produce from a higher formation.

Chaining together of multiple simple molecules to form a more complex molecule with different characteristics.

An underground reservoir having a common accumulation of oil or gas.

The joining of tracts to form a drilling unit.

(of sand or sandstone) The relative volume of the pore space compared to the total bulk volume of the reservoir.

Deposits of oil or gas that have a 10% confidence level of being recoverable economically using today's technology.

The published price that a crude oil purchaser is willing to pay for a specific grade of crude at the point that it is delivered by the seller and accepted by the purchaser on or after a stated date.

An instrument for maintaining pressure in a pipeline, downstream from the valve.

Injection of gas, water, etc., to repressure an oil field.

A posting of the price per barrel the purchaser will pay for each grade of crude oil in a geographic area.

Oil which is forced into the well bore by natural reservoir pressure, energy, or drive.

A production payment is an obligation of its grantor and a right of its holder for the grantor to pay the holder a specified portion of production proceeds or to deliver a specified portion of specified production before the production is expected to cease.

The last and deepest string of casing set in a well through which oil or gas will be produced.

Taxes levied by state governments on mineral production based on the value and/or quantity of production.  Also called severance taxes.

A test of the maximum or other rates at which a well can produce.

A large territory that the taxpayer determines can be explored advantageously in a single integrated operation.

For financial accounting, property refers to the aggregate economic interests owned through a lease or acquisition of a mineral interest.  For income tax reporting, property refers to each separate interest owned by a taxpayer in each mineral deposit in each separate tract or parcel of land.  Certain interests for tax purposes may be combined to form a property.

A system of allocating production from a well permitted to be produced during a period of time.

Reserves which can be expected to be recovered through existing wells with existing equipment and operating methods.

Quantities of reserves that, based on geologic and engineering data, appear with reasonable certainty to be recoverable in the future from known oil and gas reserves under existing economic and operating conditions.

Reserves which are expected to be recovered from new well(s) on undrilled proved acreage, or from existing wells where a relatively major expenditure is required for completion.

For federal income tax purposes, a property whose principal value has been demonstrated by exploration, discovery, or development.  For financial accounting purposes, a property containing proved reserves.

The individual responsible for all equipment contained on the lease.