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Oil and Gas Glossary

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Mid-continent crude - Oil produced mainly in Kansas, Oklahoma, and North Texas.

Midstream or Middle distillates - Refinery products in the middle of the distillation range of crude oil, including kerosene, kerosene-based jet fuel, home heating fuel, range oil, stove oil and diesel fuel.

Migration - The movement of oil and gas through layers of rock deep in the earth.

Milling - Cutting a "window" in a well's casing with a tool lowered into the hole on the drillstring.

Mineral Rights - The ownership of all rights to gas, oil, or other minerals as they naturally occur in place, at or below the surface of a tract of land.

MMCF Million cubic feet. - The cubic foot is a standard unit of measure for quantities of gas at atmospheric pressure.

Monocline - A geologic formation in which all the strata are inclined in the same direction.

Mud - A fluid mixture of clay, chemicals, and weighting materials suspended in fresh water, salt water, or diesel oil.

Mud engineer - A technician responsible for proper maintenance of the mud system.

Mud logger - A technician who uses chemical analysis, microscopic examination of the cuttings, and an assortment of electronic instruments to monitor the mud system for possible indications of hydrocarbons (shows).

Multiple completion - Completion of a well in more than one producing formation. The tubing of each production zone extends up to the Christmas tree to be piped to separate tankage.


Natural gas - A mixture of hydrocarbon compounds and small amounts of various nonhydrocarbons (such as carbon dioxide, helium, hydrogen sulfide, and nitrogen) existing in the gaseous phase or in solution with crude oil in natural underground reservoirs.

Naval petroleum reserves - Areas containing proven oil reserves that were set aside for national defense purposes by Congress in 1923 (located in Elk Hills and Buena Vista, California; Teapot Dome, Wyoming; and on the North Slope in Alaska).

Net profits interest - A share of gross production from a property that is carved out of a working interest, and is figured as a function of net profits from operation of the property.

Net Revenue Interest (NRI) - The percentage of revenues due an interest holder in a property, net of royalties or other burdens on the property. A landowner leases his mineral rights to an oilman. The landowner retains a royalty of 1/8 (=12.5%); his net revenue interest is 12.5%. The oilman's net revenue interest would be 87.5% (=100% - 12.5%).

NGL (natural gas liquids) - Portions of natural gas that are liquefied at the surface in lease separators, field facilities, or gas processing plants, leaving dry natural gas. They include, but are not limited to, ethane, propane, butane, natural gasoline, and condensate.


OCS (outer continental shelf) - A gently sloping underwater plain that extends seaward from the coast.

Octane - An hydrocarbon of the paraffin series. It is liquid at ordinary atmospheric conditions, although small amounts may be present in the gas associated with petroleum.

Octane number - A performance rating used to classify motor fuels by grading the relative antiknock properties of various gasolines. A high-octane fuel has better antiknock properties than one with a low number.

Offering memorandum - A legal document provided to potential investors in a venture describing the terms under which the investment is being offered.

Offset well - A well drilled near the discovery well. Also a well drilled to prevent oil and gas from draining from one tract of land to another where a well is being drilled or is already producing.

Offshore platform - A fixed structure from which wells are drilled offshore for the production of oil and natural gas.

Oil column - The vertical height (thickness) of an oil accumulation above the oil-water contact.

Oil gravity - The density of liquid hydrocarbons, generally measured in degrees.

Oil in place - The crude oil estimated to exist in a field or a reservoir. Oil in the formation not yet produced.

Oil pool - An underground reservoir containing oil. An oil field may contain one or more pools, each of which has its own pressure system.

Oil rig - A drilling rig that drills for oil and gas.

Oil run - 1. The production of oil during a specified period of time. 2. A tank of oil gauged, tested, and put on a pipeline.

Oil shale - A fine-grained, sedimentary rock that contains kerogen, a partially formed oil. Kerogen can be extracted by heating the shale, but at a very high cost.

Oilfield services - Described as service companies that do work in and for the oilfield. These services may include: cementing, perforating, trucking, logging, etc.

On the pump - A phrase used in reference to a well that no longer flows from natural reservoir energy by is produced by means of a pump.

OPEC (Organization of Petroleum Exporting Countries) - An international oil cartel originally formed in 1960 and including in 1983: Saudi Arabia, Kuwait, Iran, Iraq, Venezuela, Quatar, Libya, Indonesia, United Arab Emirates, Algeria, Nigeria, Ecuador, and Gabon.

Operator - The individual or company responsible for the drilling, completion and production operations of a well, and the physical maintenance of the leased property.

Organization costs - Direct costs incurred in the creation of a new business organization such as an oil and gas limited partnership.

Outcrop - A portion of bedrock or other stratum protruding through the soil level, indicating a fault or some other oil-bearing formation.

Overriding Royalty (ORRI) - A revenue interest in oil and gas, created out of a working interest. Like the lessor's royalty, it entitles the owner to a share of the proceeds from gross production, free of any operating or production costs.

Overthrust belt - A geological system of faults and basins in which geologic forces have thrust layers of older rock above strata of newer rock that might contain oil or natural gas. The Eastern Overthrust Belt runs from eastern Canada through Appalachia into Alabama. The Western Overthrust Belt runs from Alaska through western Canada and the Rocky Mountains into Central America.


Packer - A flexible rubber sleeve that is part of a special joint of pipe.

Pay zones - The term to describe the reservoir that is producing oil and gas within a given wellbore. Pay zones (or oil reservoirs) can vary in thickness from one foot to several hundred feet.

Payoff - The time when a well's production begins to bring in revenues.

Payout - The amount of time it takes to recover the capital investment made on a well or drilling program.

Perforating gun - An instrument lowered at the end of a wireline into a cased well. It contains explosive charges that can be electronically detonated from the surface.

Perforation - A method of making holes through the casing opposite the producing formation to allow the oil or gas to flow into the well. See the Gun perforation.

Permeability - A measure of the ease with which a fluid such as water or oil moves through a rock when the pores are connected. Geologists express permeability in a unit named the darcy, but oilmen use the millidarcy because most of the rocks they come in contact with are not very permeable.

Petrochemicals - Chemicals derived from crude oil or natural gas, including ammonia, carbon black, and other organic chemicals.

Petroleum - Strictly speaking, crude oil. Also used to refer to all hydrocarbons, including oil, natural gas, natural gas liquids, and related products.

Petroleum engineer - A term including three areas of specialization: 1) Drilling engineers specialize in the drilling, workover, and completion operations, 2) Production engineers specialize in studying a well's characteristics and using various chemical and mechanical procedures to maximize the recovery from the well, 3) Reservoir engineers design and execute the planned development of a reservoir. Many U.S. universities offer BS, MS, and Ph.D. degrees in petroleum engineering.

Petroleum geologist - A geologist who specializes in the exploration for, and production of, petroleum.

Pinch out - The disappearance of a porous, permeable formation between two layers of impervious rock over a horizontal distance.

Pipeline - A tube or system of tubes used for the transportation of oil or gas. Types of oil pipelines include: lead lines, form pumping well to a storage tank; flow lines, from flowing well to a storage tank; lease lines, extending from the wells to lease tanks; gathering lines, extending from lease tanks to a central accumulation point; feeder lines, extending from leases to trunk lines; and trunk lines, extending from a producing area to refineries or terminals.

Pipeline gas - Gas under enough pressure to enter the high-pressure gas lines of a purchaser; gas in which enough liquid hydrocarbons have been removed so that such liquids will not condense in the transmission lines.

Plug back - To block off the lower section of the borehole by setting a plug, in order to perform operations in the upper part of the hole.

Plugged & Abandoned (P&A) - This expression refers to setting cement plugs in an unsuccessful well (a dry hole) or a depleted well.

Plugging a well - Filling the borehole of an abandoned well with mud and cement to prevent the flow of water or oil from one strata to another or to the surface.

Pool - 1) (noun) An underground reservoir containing or appearing to contain a common accumulation of oil and natural gas. A zone of a structure which is completely separated from any other zone in the same structure is a pool. 2) (verb) To combine two or more tracts of land into one unit for drilling purposes. This may be accomplished voluntarily, or through compulsion.

Pooling - A term frequently used interchangeably with "Unitization" but more properly used to denominate the bringing together of small tracts sufficient for the granting of a well permit under applicable spacing rules.

Porosity - A measure of the number and size of the spaces between each particle in a rock. Porosity affects the amount of liquid and gases, such as natural gas and crude oil, that a given reservoir can contain.

Possible reserves - Areas in which production of crude oil is presumed possible owing to geological inference of a strongly speculative nature.

Present net value - The present value of the dollars (income, or stream of income) to be received at some specified time in the future, discounted back to the present at a specified interest rate.

Primary recovery - Production in which oil moves from the reservoir, into the wellbore, under naturally occurring reservoir pressure.

Primary term - The basic period of time during which a lease is in effect.

Private Placement Offering - A securities (investment) offering not intended for the general public. By meeting certain criteria, such an offering may qualify for exemptions from registration with the Securities and Exchange Commission of the Federal government.

Probable reserves - Areas which are unproven but presumed capable of production because of geological inference, for instance, proximity to proven reserves in the same reservoir.

Producing horizon - Where the well is actually produced, since it may be drilled to a greater depth.

Producing platform - An offshore structure with a platform raised above the water to support a number of producing wells.

Production - A term commonly used to describe taking natural resources out of the ground.

Production test - A test made to determine the daily rate of oil, gas, and water production from a potential pay zone.

Proppants - Materials used in hydraulic fracturing for holding open the cracks made in the formation by the fracturing process. Proppants may consist of sand grains, beads, or other small pellets suspended in fracturing fluid.

Prospect - A lease or group of leases on which an operator intends to drill.

Proved behind-pipe reserves - Estimates of the amount of crude oil or natural gas recoverable by recompleting existing wells.

Proved developed reserves - Estimates of what is recoverable from existing wells with existing facilities from open, producing payzones.

Proved reserves - Estimates of the amount of oil or natural gas believed to be recoverable from known reservoirs under existing economic and operating conditions.

Proved undeveloped reserves - Estimates of what is recoverable through new wells on undrilled acreage, deepening existing wells, or secondary recovery methods.

Public lands - Any land or land interest owned by the federal government within the 50 states, not including offshore federal lands or lands held in trust for Native American groups.

Public Offering - A securities (investment) offering intended for sale to the general public. It must be register with 1) the Securities and Exchange Commission of the Federal government and 2) the securities-regulating agencies of the various states in which it will be offered.

Pump - A device that is installed inside or on a production string (tubing) that lifts liquids to the surface.

Pump off - To pump a well so rapidly that the oil level falls below the pump's standing valve, rendering the well temporarily dry.

Pumping well - A well that does not flow naturally and requires a pump to bring product to the surface.


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