Industry Glossary

Barrel – The basic unit for measuring oil. A barrel is equal to 42 U.S. gallons.

Bit – A drilling tool that cuts the hole. Bits are designed on two basic and different principles. The cable tool bit moves up and down to pulverize. The rotary bit revolves to grind.

Blow-Out Preventer – A heavy casinghead control, filled with special gates or rams, which can be closed around the drill pipe, or which completely closes the top of the casing.

Boyle’s Law – A law of physics stating that when gas is subject to compression and kept at a constant temperature, the product of the pressure and volume is a constant quantity, i.e., the volume is inversely proportional to the pressure.

BTU – British Thermal Unit, a generalized measure of heating value, also used to compare energy potential in different types of fuels.

Casing – Heavy steel pipe used to seal off fluids from the hole or to keep the hole from caving in.

Casinghead Gas – Gas produced with oil in oil wells. The gas is taken from the well through the casinghead at the top of the well.

Catalytic Cracking – A refining process for breaking down large, complex hydrocarbon molecules into smaller ones. A catalyst is used to accelerate the chemical reactions in the cracking process.

Christmas Tree – The assembly of valves, pipes and fittings used to control the flow of oil and gas from the casinghead.

Condensate – Liquid hydrocarbons recovered by surface separators from natural gas. It is also referred to as natural gasoline and distillate.

Correlative Rights Theory – The theory adopted by the courts in several states that all landowners whose tracts overlay a producing formation have correlative rights in the formation. This theory is termed the “qualified ownership” theory.

Crude Oil – Liquid petroleum as it comes out of the ground. Crude oil varies radically in its properties, such as specific gravity and viscosity.

Derrick – A tapering tower, usually of open steel framework, used in the drilling of oil and gas wells as support for the equipment lowered into the well.

Distillate Fuel Oils – Fuel oils which are products of distillation. They include fuels used for diesel fuel and space heating.

Directional Drilling – The drilling of a well that departs materially from the vertical direction.

Downstream – Those activities in the oil and gas industry which take place away from the source of the supply. Downstream operations commonly include refining and marketing endeavors.

Drilling Fluids – Special chemical fluids, usually called mud, introduced into the hole to lubricate the action of a rotary bit, to remove the cuttings and to prevent blowouts.

Dry Gas – Natural gas which does not contain dissolved liquid hydrocarbons.

Dry Hole – A completed well which is not productive of oil and/or gas or which is not productive of oil or gas in paying quantities.

Enhanced Recovery – The increased recovery from an oil pool achieved by artificial means or by the application of outside energy sources to the pool.

Equivalent Barrels – Quantities of natural gas and natural gas liquids translated into barrels of oil based on equal energy content. The energy content of six thousand cubic feet of gas (6 MCF) is the rough equivalent of one barrel of oil.

Exploration – The search for oil and gas. Exploration operations include aerial surveys, geophysical surveys, geological studies, core testing and the drilling of test (wildcat) wells.

Fault Trap – A structural trap in the earth, favorable for the retention of petroleum, formed by the cracking and breaking of a rock plane.

Gusher – An oil well that comes in with such great pressure that oil flows out of the well head into the air. Such wells used to be commonplace, but with improved drilling methods, notably the use of drilling mud, gushers are a rarity today.

Horizontal Drilling – A method of drilling where the drill bit is turned in a horizontal direction in an effort to produce hydrocarbons from a number of areas located at the same approximate depth.

Independent – A company involved only in the exploration and production of oil and gas and possibly in the transportation. An independent will not be involved in the refining of oil.

Injection well – A well employed for the introduction into an underground stratum of water or gas under pressure. Injection wells are employed for the disposal of produced water from oil and gas wells.

Integrated Company – A company involved in virtually all aspects of the oil and gas industry including exploration, production, transportation, refining and marketing. These companies are also referred to as major oil companies.

Lease – The instrument by which a leaseholder or working interest is created in minerals.

LNG – Liquefied natural gas. Natural gas becomes a liquid at a temperature of minus 258 degrees F and may be stored and transported in the liquid state.

MCF – Thousand Cubic Feet. The standard unit for measuring the volume of natural gas.

Natural Gas – Hydrocarbons, which at atmospheric conditions of temperatures and pressure, are in a gaseous phase.

Natural Gas Liquids – Hydrocarbons found in natural gas which may be extracted or isolated as liquefied petroleum gas and natural gasoline.

OCS – The Outer Continental Shelf. Generally the area outside the territorial boundaries of the coastal state over which the federal government exercises control.

Oil Field – An area which is underlain by one or more reservoirs containing oil.

Oil Pool – An underground reservoir or trap containing oil.

Overboard Water – Another name for produced water or brine produced from oil and gas wells.

Platform – Structure used in offshore drilling on which the drilling rig, crew quarters and other related items are located.

Plugging of Well – The sealing off of the fluids in the stratum penetrated by a well so that the fluid from one stratum will not escape into another or to the surface.

Probable Reserves – An estimate of reserves taking into consideration known geology, previous experience with similar types of reservoirs and seismic data, if available.

Processing Plant – A plant to remove liquefiable hydrocarbons from wet gas or casinghead gas. This process yields the propanes, butanes and other products taken from natural gas.

Produced Water – Water that comes up a well with the oil and gas. Produced water is usually high in salinity. It is often the force that drives the oil and gas to the surface. After leaving the well, the produced water is separated from the oil and gas. Also referred to as overboard water, formation water, saltwater and oilfield brine.

Proration – The restriction of production by a state regulatory commission, usually on the basis of market demand. In Louisiana the proration of natural gas is allowed to prevent physical and economic waste and to protect correlative rights.

Proven Reserves – Oil which is still in the ground, but which has been located and determined to be recoverable.

Quad – A quadrillion of BTU’s. This unit of measurement is used in connection with energy consumption. A barrel of crude oil contains 5.8 million BTU’s. Natural gas contains about one million BTU’s per MCF.

Recomplete – To move the primary completion from one zone to another. May involve reperforating, running other tubulars or setting a new packer.

Redrill footage – Occasionally, a hole is lost or junked and a second hole may be drilled from the surface in close proximity to the first. Footage drilled for the second hole is defined as “redrill footage.” Under these circumstances, the first hole is reported as a dry hole (explanatory or developmental) and the total footage is reported as dry hole footage. The second hole is reported as an oil well, gas well, or dry hole according to the result. The redrill footage is included in the appropriate classification of total footage, but is not reported as a separate classification.

Refinery – The facility where the characteristics of petroleum or petroleum products are changed.

Reservoir – A porous and permeable sedimentary rock containing commercial quantities of oil and gas. Three types of reservoirs are encountered including structural traps, stratigraphic traps and combination traps.

Rig – The structures and equipment used in drilling an oil and gas well including the derrick, engine, engine house and other equipment.

Roughneck – A driller’s helper and general worker on a drilling rig.

Roustabout – A common laborer around a drilling or a producing well.

Royalty – The landowner’s share of production, before the expenses of production.

Severance Tax – A tax on the removal of minerals from the ground. The tax can be levied either as a tax on volume or a tax on value. In Louisiana oil is taxed at 12.5 percent of value. Natural gas is taxed at 7 cents per MCF with the rate adjusted annually to reflect the changes in the spot market price of gas sold in Louisiana.

Shut In – To close down a producing well temporarily for repairs, cleaning out, building up reservoir pressure, lack of market, etc.

Sour Gas – Natural gas contaminated with chemical impurities, notably hydrogen sulfide or other sulfur compounds, which cause a foul odor.

Specific Gravity – In the case of liquids, the ratio between the weight of equal volumes of water and another substance, measured at standard temperature and where the weight of the water is assigned a value of 1. However, the specific gravity of oil is normally expressed in the industry in degrees of API gravity.

Spudding In – The first boring of the hole in the drilling of an oil well.

Stripper Production – The final stage of production in the life of an oil well or oil field. This stage is characterized by low rates of production, sometimes no more than a barrel of oil per day.

Tension Leg Platform – A type of platform generally used in deep waters. Instead of a stationary platform attached to the ocean floor, the surface platform is tethered to a templet on the ocean floor by flexible steel tendons.

Upstream – Activities in the oil and gas industry which take place close to the supply. This normally includes exploration and production activities.

Well – A hole drilled in the earth for the purpose of finding or producing crude oil or natural gas or providing services related to the production of crude oil or natural gas.

Wellhead – A term usually defined as being at the Christmas Tree but, which under exceptional circumstances, may be defined as located at some other place.

Wellhead Revenues – The total dollar value of crude oil and natural gas at the wellhead. Wellhead revenues are calculated, based on the production volumes of crude oil and natural gas, multiplied by their respective average wellhead price.

Wet Gas – Natural gas containing liquid hydrocarbons in solution, which may be removed by a reduction of temperature and pressure or by a relatively simple extraction process.

Wildcat Well – An exploratory well being drilled in unproven territory, that is, in a horizon from which there is no production in the general area.

Work Overs – Operations on a producing well to restore or increase production. A typical work over is cleaning out a well that has sanded up.