Oil and Gas Terms

Accumulation: Quantity of hydrocarbons (oil and natural gas) found in the reservoir rock in
an oil or gas field.
Alkylation: A chemical reaction that consists in fixing an alkyl radical onto a molecule.
Appraisal well: A well drilled in order to evaluate the characteristics of a field.
Assisted recovery: Set of techniques for increasing the productivity of a field.
Associated gas: Gases present in the reservoir rock.

Ballast tank: A tank intended to be filled with seawater to keep floating equipment stable.
Barrel: Unit of volume of crude oil in use in the oil industry, especially in the USA and the
UK. Dates back to the days of sailing ships, when oil was shipped in casks.
Bit: Tool used in drilling to break up rock mechanically in order to penetrate the subsoil
gradually. The bit will dig a circular hole.
Blowout preventer : Safety system that quickly closes a well in the course of drilling, to
avoid accidental blowouts.

Casing: Set of steel tubular elements used to line the inner wall of a drill hole, to
consolidate it. The casing is secured by cementing the annular space between the hole wall
and the casing. Each time a tubing is installed, the well diameter is reduced, so that the
tubing in a well forms a telescopic assembly. The tubes have a standard length of nine
meters, and are assembled by threaded sleeves.
Catalysts: Chemical compounds that facilitate or promote a reaction by their presence or
action.
Catalytic cracking: This conversion operation takes place at very high temperatures (500
degrees Celcius) in the presence of a catalyst. It serves to break up large hydrocarbon
molecules into smaller ones.
Cat feed: Those products of the crude distillation process which are further refined through
catalytic cracking.
Cementing: Injection of cement into the annulus (space) between the casing and the well
wall to consolidate the latter and reduced water influxes.
Christmas tree: Another name for a wellhead.
Coke: A solid material similar to coal that can be produced from processing of heavy oil.
Coking: A refining process by which the denser, heavier products of the distillation process
(residuals) are converted to lighter products such as cat feed and naphtha, and petroleum
coke, a solid, coal-like fuel. The coking unit, or coker, heats hydrocarbons to near 800
degrees Fahrenheit, at which temperature all the lighter products vaporize and the coke
solidifies in a large drum called a coke drum from which it is removed by means of high-
pressure jets of water.
Completion (well): All operations (tubing, installation of valves, wellhead, etc.) to bring a
production well into operation.
Conversion: This stage in the refining process consists of breaking up the large molecules
into smaller ones in order to produce lighter compounds. Processes involved include
catalytic cracking and viscosity reduction (visbreaking).
Cooling tower: A structure which cools heated refining process water by circulating the
water through a series of louvers and baffles through which cool air is forced by large fans.
Core-sampling (or coring): During drilling, cylindrical samples of rock known as "core
samples" are removed in order to study the characteristics of the terrain.
Crude oil: A mixture of thousands of chemicals and compounds, primarily hydrocarbons.
Crude oil must be broken down into its various components by distillation before these
chemicals and compounds can be used as fuels or converted to more valuable products.
Crude oil is classified as either sweet crude (sulfur content less than 0.5%) or sour crude,
(at least 2.5% sulfur).
Crude unit: The refinery processing unit where initial crude oil distillation takes place. See
topping.
Cut: One or more crude oil compounds which vaporize and are extracted within a certain
temperature range during the crude distillation process. See distillation curve.

Derrick: Metal tower erected vertically above a well for the purpose of lifting and lowering
tubes and tools into the well.
Derrick-man: Member of the drilling crew who works at the top of the derrick.
Desalting: Removal of salt from crude oil. Desalting is preferably performed prior to
commercialization of the crude, and must be performed prior to refining.
Development: All operations and measures undertaken to bring a reservoir into production.
Diamond-tipped (tools): Drill-bit or other tool whose cutting-edge has been hardened with
manmade diamonds.
Directional drilling: The most common drilling direction is vertical, but there may be
various reasons for drilling obliquely.
Distillation: The first step in the refining process. During distillation, crude oil is heated in
the base of a distillation tower. As the temperature increases, the crude's various
compounds vaporize in succession at their various boiling points, then rise to prescribed
levels within the tower according to their densities, condense in distillation trays, and are
drawn off individually for further refining. Distillation is also used at other points in the
refining process to remove impurities.
Distillation curve: A graph which plots the percentage (by volume) of a given grade of
crude which boils off as a function of temperature. Since the boiling points of the various
crude cuts are constant, the distillation curve shows the percentage of each compound in a
given grade or batch of crude.
Distillation tower: A tall column-like vessel in which crude oil is heated and its vaporized
components distilled by means of distillation trays. Also used to remove impurities added
during the refining process.
Drill: Making a hole by means of whatever mechanism.
Drill string: Set of drilling tools, comprising pipes connected to each other, the bit, and the
different tools. In drilling, the drill string is rotated by the rotary table.
Drilling mud: Mixture of water and special additives circulating within the well for the
purpose of cooling the drill-bit, removing rock cuttings and transporting them back up to the
surface, preventing the well wall from caving in, maintaining sufficient pressure at the well
bottom to avoid hydrocarbon blowout.
Drum cycle: In the petroleum coking process, the length of time it takes to heat the coke
drum sufficiently to safely introduce hot hydrocarbons, transform the raw material into solid
petroleum coke, and remove or cut the solid coke from the drum before repeating the
process. The shorter the drum cycle, the more economical the coke manufacturing process.

Echosounder: Device used to calculate the distance of an obstacle based on the time a
soundwave takes to travel to the obstacle and back.
Effluent: Mixture of oil, gas, water and sand discharged from a well.
Electron: An elementary particle carrying a negative electric charge. An electron's mass is
negligible compared with that of protons and neutrons.
Enhanced recovery: Recovery techniques designed to extract more hydrocarbons from a
reservoir by physical, chemical or thermal means.
Exchanger (Heat exchanger): Any device used to transfer heat from one process liquid to
another. In one kind of exchanger, process hydrocarbons are circulated through tubes
surrounded by cooling air or water.
Exploration: Any method used to discover new oil and gas fields.
Exploration well: Well drilled to find an oil field.

Field: Set of porous rocks containing hydrocarbons.

Flare bleeder: Device for evacuating and burning unused gases.
Fractionation: The separation of crude oil into its more valuable and usable components
through distillation.

Gas cap: Upper portion of reservoir rock of a gas-containing field. The gas extracted during
oil production is sometimes injected into the gas cap in order to boost hydrocarbon
recovery.
Geophone: Acoustical sensor for collecting reflected waves, in seismic exploration.
Gravity: a property of a material that compares its weight to its volume.

Heat exchanger: See exchanger

Horizontal drilling: Extreme form of directional drilling, in which the hole is drilled along a
horizontal stratum.
Hydrocarbon: Chemical compound formed only of carbon and hydrogen.
Hydrophone: Acoustical sensor used for collecting reflected waves in seismic exploration
at sea.

Injection well: Well used to inject water or gas, in order to maintain a field at pressure or
bring it back under pressure.

Jacket: Steel structure placed on the seabed with a deck supporting drilling and/or
production facilities.
Jet fuel: A fuel used in aircraft. Jet fuel is obtained by distillation and sweetening. The latter
removes all trace of mercaptans (very light molecules containing sulfur atoms). Jet fuel is a
white product, so-called because it is transparent.

Kick-off (deflected) well: Well whose orientation and inclination are determined to reach
an area not directly below the well.

Loading flange: Installations required to deliver crude oil to a refinery.

Lubes (Lubricants): Denser, more viscous refined products such as motor oil, bearing
grease or machine oil.

Manifold: Set of pipes and valves directing the effluent or production into facilities.
Mantle: Impermeable stratum overlaying a reservoir which prevents the hydrocarbons
contained in it from migrating to other rocks.
Mantle : The part of the earth between the crust and the central core.
Mercaptan: Molecules containing sulfur, with a low molecular weight and therefore very
light.
Mother (or source) rock: Rock in which hydrocarbons are formed.
MTBE: Methyl tertiary butyl ethane is a gasoline additive which increases octane rating.
MTBF: Mean time between failures is the average service life of a piece of process
equipment, particularly for rotating equipment. A refinery's MTBF is one indicator of the
effectiveness of its maintenance program.

Naphta: An oil distillate. Naphta is an intermediate product between gasoline and kerosene.
It is known as a light product because of the low molecular weight of the hydrocarbons
making it up.
O

Octane number: In a gasoline-powered engine, combustion is triggered by a sparkplug.

Given the high pressure and temperatures prevailing inside the combustion chamber, it is
vital to prevent the fuel from igniting spontaneously. The octane number measures a fuel's
resistance to spontaneous ignition. The higher the octane number, the greater fuel's
resistance to spontaneous ignition.
Offshore: Designates oil fields and facilities constructed at sea.
Oil-bearing reservoir: Continuous volume of rock containing voids, pores, or a network of
cracks, and in which fluids (hydrocarbons, water, and inert gases) can circulate.

Petrochemicals: Chemicals produced from petroleum. They are often manufactured as

part of the refining process.
Petroleum: From the Latin petra oleum, meaning "stone oil", an inflammable oily liquid
varying in color from yellow to black, consisting of widely varying hydrocarbons, found in
sedimentary strata of the earth's crust.
Platform: Set of facilities rising above the sea, used to operate offshore fields.
Porosity: Ratio of the volume of interstices of a material to the volume of its mass. In oil
fields, the oil and gas are contained in pores in the rock.
Production sharing agreement: Contract by which the production of a field is shared
between the host government and the oil company operating the field. The company is paid
in the form of cost oil, to cover the exploration and development expenses borne by it
alone, and profit oil, which represents its profit on the venture.
Production well: Well used when producing oil.
Prospect: Underground area in which geologists think there is a chance of finding oil.

Reboiler: A special kind of heat exchanger used to put heat into a distillation column.
Refinery: Plant where crude oil is separated and transformed into marketable products.
Reforming: A refining process wherein short-chain molecules in certain crude distillation
products are chemically recombined (reformed) by means of heat, pressure, and usually,
catalytic reaction to form higher-value long-chain-molecule compounds.
Reserves (of a field): Volume of oil trapped in a rock.
Reservoir characteristics: All of the features that serve to characterize the hydrocarbons
(viscosity, density, etc.) and the rock containing them (porosity, permeability, etc.).
Rotary: Drilling method consisting of drilling rocks with bits turning about their axis. The
rocky debris is continuously evacuated to the surface by a flow of mud under pressure.
Rotary table: Circular plate in a drilling rig that transmits the rotational motion to the drill
pipes through the drive pipe.

S
Sample: Small quantity of rock removed, often by coring, for analysis.
Sediments: Deposits of particles of variable sizes, coming either from the erosion of old
rocks or from activities (shellfish shells or other). With time, the sediments become
sedimentary rock.
Sedimentary basin: Terrain consisting of superposed layers of rock formed from the
deposition of sediment over vast tracts of ocean or lake beds, over the course of geological
eras.
Sedimentary rock: Rock made up of aggregated sediments.
Seismic analysis: The seismic principle is to generate elastic waves methodically and
study their propagation through the subsoil. The seismic waves are refracted and reflected
as they travel through the various rock strata, and are detected at the ground or sea surface
by appropriately placed geophones. The seismic records are interpreted to generate
information concerning the shape of the underground strata in the explored region.
Self-raising platform: An offshore drilling platform fitted with large buoyancy tanks which
are filled with seawater to keep the rig stable in the sea swell.
Separation: The first stage in refining, consisting in separating the different hydrocarbons
present in the crude oil depending on their respective boiling ranges. This process takes
place in a distillation column.
Separator: Apparatus that separates oil, gases, and water contained in the effluent at the
exit from a production well, by making use of their relative densities.
Slot: Element of a drill shirttail for guiding the drill tube.
Sounding well: Hole for obtaining data concerning the characteristics of a field.
Sour crude: Crude oil containing a substantial amount of sulfur.
Strata: Layers of rock making up a terrain.
Stratum of a terrain: Mineral deposits in superposed layers.
Stripping: A separation process that consists in injecting water steam into the distillation
residue in order to recover the lightest molecules.
Subsoil: Part of the earth's crust located below the surface.

TAME: Tertiary amyl methyl ethane is a gasoline additive which increases octane rating.
Topping (Atmospheric distillation): The initial transformation of the crude oil at a refinery.
The topper heats crude oil at atmospheric pressure to accomplish the first rough distillation
cut. The lighter products produced in this process are further refined in the catalytic
cracking unit or the reforming unit. Heavier products which cannot be vaporized and
separated in this process are distilled still further in the vacuum distillation unit or the coker.
Tray: Flat, perforated shelves at prescribed levels in a distillation tower, which allow specific
vaporized crude oil components to pass through and then condense on their surfaces (after
contacting domes called bubble caps above the perforations) before being drawn off for
further distillation.
Treatment: Set of procedures for separating the various components of the effluent and
obtaining crude oil.
Tubing: Set of steel tubular elements in the center of the well, by which the effluent is
evacuated to the surface.
Turnaround: Scheduled large-scale maintenance activity wherein an entire process unit is
taken offstream for an extended period for comprehensive revamp and renewal.

Vacuum distillation:Process by which heavier cuts of crude not vaporized in the topping
process are heated in a vacuum to accomplish their fractionation.
Vent: Gas safety exhausting system to avoid dangerous excess pressures building up.
Visbreaking: This is a thermal cracking process. Like catalytic cracking, it breaks up large
molecules into smaller ones. It is applied to the residue of vacuum distillation as part of the
overall conversion process.
Viscosity: The ability of a liquid to flow at a given temperature.
Volatility: The ability of a liquid to evaporate.

Well: Hole drilled underground for oil exploration and operation. By extension, any
apparatus used for this purpose.
Wellhead: All connections, valves, nozzles, pressure gages, thermometers, and so forth,
installed at the exit from a production well.
Well-logging: Electrical recording of physical characteristics of rocks traversed by a well.
White product: A term used to refer the lightest products resulting from the refining
process, because of their transparent appearance.

Abandonment / Decommissioning
Process of dismantling wellhead, production and transportation facilities and restoration of
depleted producing areas in accordance with licencerequirements and /or legislation.

Acid stimulation
Form of hydrochloric acid is pumped down well hole to enlarge pore space in oil bearing
rocks to increase flow and recovery.

Acoustic log
Record of time taken by a sound wave to travel over a certain distance through geological
formations.

Air injection
An enhanced recovery technique in which air is injected into hydrocarbon formation to
increase reservoir pressure.

Annulus

Artificial lift
Any techniques, other than natural drives, for bringing oil to surface.
Blow-down
Condensate and gas produced simultaneously from outset of production.

Casing perforation
Holes made in liner of a finished well to allow hydrocarbons to flow into production tube.

Cathodic protection
Method used to minimise rate of electrochemical corrosion of structures, for example,
installations offshore, pipelines and storage tanks.

Christmas tree
Branching series of pipes, gauges and valves on top end of each production well to control
flow of oil or gas.

Closed-in
Descriptive of a well that is capable of producing, but is not currently producing.

Coiled tubing
Used to carry production equipment to bottom of well.

Commingling
Producing oil and gas from two or more reservoirs at different depths, or where product of
two or more fields is transported via a common pipeline.

Delineation well
Drilled at a distance from a discovery well to determine physical extent, reserves and likely
production rate of a new oil or gas field.

Deviated well
Horizontal well drilled at an angle (over 80 degrees) to vertical.

Development
Phase on which a proven oil or gas field is brought into production by drilling production
(development) wells.

Development well
A production well drilled with intent of producing oil or gas from a proven field.

Downstream

Dual Completion
A well completed to produce from two separate reservoirs.

Enhanced reach
Deviated wells (over 65 degrees) from vertical and reach out horizontally more than twice
vertical depth.

Field
Geographical area under which an oil or gas reservoir lies.

Field Nomenclature
Field ceased production (FCP)
Field under development (FUD)
Field in production (FIP)
Flaring and venting
Flaring is burning of hydrocarbon gases for commercial or technical reasons. Venting is
release of gases to atmosphere.

Flare Stack
Steel structure on an offshore installation or at a processing facility from which gas is flared.
Gas Cap
In field containing both gas and oil, some gas will often collect at top of reservoir in a single
deposit.

Gas/Condensate field
Reservoir containing both natural gas and oil, with greater proportion of gas. Condensate
appears when gas in drawn from well, and its temperature and pressure change sufficiently
for some of it to became liquid petroleum.

Gas field
Field containing natural gas, but no oil.

Gas gathering system

Central collection point for offshore gas fields. Production is then piped to central
processing system onshore.

Gas Injection (GI)

Associated gas is pumped back into a reservoir to maintain reservoir pressure. In this way
rate of production of crude oil also can be increased.

Gas lift
Gas from same or nearby field is mixed with oil in tubing to lessen weight of liquid column.

Gas Oil Ratio (GOR)

Gas Processing
Separation of oil and gas, and removal of impurities and NGLs from natural gas.

Gas Treatment
Removal of impurities, condensate, hydrogen sulphide and NGLs from natural gas.

Gravity Structures
Either concrete or hybrid (concrete base and steel legs and superstructure) structures that
due to weight rest on seabed or piled into it.

Horizontal well
Used when reservoir permeability is low or hydrocarbons are being produced from vertical
fractures in rock.

Jacket
Supporting (concrete base or steel legs) structure for an offshore installation.

Marine Riser
Pipe connecting offshore installation to a subsea wellhead or pipeline for drilling or
production purposes.
Module
Self-contained box or package built with a specific purpose (for example, well head, oil and
gas separation, gas compression, platform power generation, mud, storage, diesel, filter
and exhaust) located on production installations.

Multilateral well
More than one horizontal section drilled in one well. Used to maximise number of wells that
can be drilled from small installations.

Odorant
Substance (for example mercaptan) added to odourless natural gas or NGLs to enable
detection.

Offshore Oil Loading Nomenclature

Single buoy mooring (SBM)
Single point mooring (SPM)
Exposed location single buoy mooring (ELSBM)
Spar
Enables offshore loading with vessel swinging to present least resistance to prevailing wind
or current conditions.

Oil in Place (OIP)

Estimation of real amount of oil in a reservoir. Higher value than recoverable reserves of
reservoir.

Pig
Device for cleaning a pipeline or separating two liquids being moved down pipeline.
(Intelligent pig - fitted with sensors to check for corrosion or defects in pipelines.)

Piling
Long steel piles driven into the seabed to anchor fixed offshore structures solidly in place.

Pipeline
A pipe through which natural gas, crude oil or petroleum products are pumped between two
points, either onshore or offshore.

Plateau
Level of peak oil or gas field production; it is always followed by declining level of
production.

Platform
Fixed structure resting on seabed or piled into it.

Platform Nomenclature
Tension Leg Platform (TLP)
Minimum Facility Platform (MINF)
Not Normally Attended Installation (NNAI)
Gravity based structures (GBS)
Accommodation (ACCOM)
Compression (COMP)
Drilling (DRIL)
Riser (RISE)
Preventative maintenance
Maintenance carried out prior to unit or system failure.

Primary Recovery
Recovery of hydrocarbons from a reservoir using only natural reservoir pressure.(see
also Secondary and Tertiary Recovery.)

Produced Water
Brines naturally present or injected into reservoir to enhance production. Produced along
side oil production.

Production Drilling
Drilling of wells in order to bring a field into production.

Production Installation
An installation from which development wells are drilled and that carries all associated
processing plants and other equipment needed to maintain a fieldin production.

Production String
Tubing or piping in a production well through which oil or gas flows
from reservoir to wellhead.

Recovery Factor
Ratio of recoverable oil and / or gas to estimated oil and / or gas in place in reservoir.
Determined by a various factors such as reservoir dimensions, pressure, nature
of hydrocarbons, and development plan. (see also Primary, Secondary and Tertiary
Recovery.)

Redetermination
Retroactive adjustment to relative percentage interests of joint venturers in a field.

Reserves: Possible
Reserves at present cannot be regarded as "probable".

Reserves: Probable
Reserves not yet "proven", but are estimated to have a better than 50% chance of being
technically and economically producible.

Reserves: Proven
Reserves which on available evidence are virtually certain to be technically
and economically producible.

Reservoir
Subsurface, porous, permeable rock formation in which hydrocarbons are present.

Reservoir drive
Powered by difference in pressures within reservoir and well.

Reservoir engineering model

Used to predict reservoir behaviour during production to enable selection of most efficient
method of recovery.

Satellite Installation
An offshore structure that depends on another installation for materials or services.

Secondary Recovery
Recovery of hydrocarbons from a reservoir by increasing reservoir pressure by injecting
gas or water into reservoir rock. (see also Primary and Tertiary Recovery.)

Slug catcher
Plant installed in a gas pipeline system to catch unwanted "slugs" of liquid.

Subsea manifolds
Allows wells to be put on production without need to build a platform to operate and
maintain wells.

Sub-sea wellhead
A wellhead installed on the sea floor and controlled remotely from a platform, a floating
production facility or land.

Substructure
Support form of an offshore installation on which derrick, engines, helicopter pad, cranes,
etc. are installed.

Tension Leg Platform

A floating offshore structure held in position by a number of tension-maintaining cables
anchored to seabed. Cables dampen wave action to keep platform stationary.

Terminal
Onshore transit installation that receives oil or gas from offshore production facilities
via pipeline and / or tankers. Plant and equipment designed to receive and process crude
oil or gas to remove water and impurities.

Tertiary Recovery
Recovery of hydrocarbons from a reservoir by sophisticated methods, for example, heating
reservoir or enlarging pore spaces using chemicals. (see alsoPrimary and Secondary
Recovery)
Tubing
Piping installed in wells for production of oil and gas.

Topsides
Top of an installation positioned on jacket.

Upstream

Water Injection (WI)

Water is pumped into alternate wells in a field. Pressure in reservoir as a whole can be
maintained or increased and production can be maintained or increased.

Well completion

Well Nomenclature (Field)

Development (DEV)
Deviated (DEVW)
Gas Injection (GI)
Water Injection (WI).
Workover
Re-entry into a completed field well for modification or repair. Restoring well productivity by
cleaning out accumulations of sand, silt or other substances that clog production tubing.
Air Emissions
Waste gases, vapours and small particles released into air.

Environment
External surroundings and conditions in which a company or an individual
operates or which may effect, including living systems therein.

Environmental controls
Put in place to meet or exceed legal requirements and to minimise impact on
environment.

Environmental Impact Assessment (EIA)

Part of project management concerned with identifying through a formal
written technical evaluation likely impact (positive and negative) of a
proposeddevelopment or activity on natural and man-made environment.

Environmental Management Systems (EMS)

A process that examines environmental factors and activities or processes
that industry uses.

Generic Hazard
Hazard which may be generally present throughout an operation or industry,
but which may have widely different levels of risk, depending on specific site
characteristics.

Hazard
Object, physical effect, or a condition with potential to harm persons,
property or environment.

Reasonably Practicable
Risk reduced to levels such that further risk reduction measures would be so
disproportionate to probability and consequence that it would be objectively
unreasonable to implement them.

Risk
Measure of likelihood of occurrence of an undesirable event and of
potentially adverse consequences.

Risk Assessment
Careful consideration by competent persons of hazards associated with a
task. Potential effect of each hazard, how serve it might be and likelihood of
it occurring, should be considered to determine effort required to make site
as safe as reasonably practicable.

Risk Management
System that eliminates or mitigates threat from hazards.

Barge
Non-self-propelled marine vessel used as cargo tankers, as
equipment and supply carriers, crane platforms and support
 and accommodation bases in offshore drilling, and as
submarine pipe-laying vessels.

Crane Barge
Vessel capable of lifting heavy equipment onto / off offshore
installations.

Drill Ship
Free floating mobile drilling platform used in very deep waters.
Positioned by dynamic positioning.

Floating Vessel Nomenclature

Floating accommodation for offshore personnel (Flotel).
Floating Production, Storage and Offloading Vessel (FPSO)
Floating Production Vessel (FPV)
Floating Storage Unit (FSU)

Jack-up Rig
Mobile drilling platform with retractable legs used in shallow
waters less than 100 metres deep.

Lay barge
Vessel specially equipped to lay submarine pipelines.

Lightering
Unloading cargo from large marine tankers into smaller
tankers that can enter shallow-water ports.

LNG Carrier
Tanker, with insulated pressure tanks, designed to carry
refrigerated LNG shipments.

Semi-submersible Rig
Mobile drilling platform with floats or pontoons submerged to
give stability while operating. Used in deeper waters down to
360 metres or more. Kept in position by anchors or dynamic
positioning.

TEMPSC
Totally Enclosed Motor Propelled Survival Craft

ULCC
Ultra large crude carrier. Oil tanker over 300,000 tonnes dwt.

VLCC
Very large crude carrier. Oil tanker over 200,000 tonnes dwt.

ABANDONED WELL - A well no longer in use; a dry hole that, in most states, must be
properly plugged.

ACIDIZING A WELL- A technique for increasing the flow of oil from a well. Hydrochloric acid
is pumped into the well under high pressure to reopen and enlarge the pores in the oil-
bearing limestone formations.
ACID TREATMENT - A refining process in which unfinished petroleum products such as
gasoline, kerosene, diesel fuels, and lubricating stocks are treated with sulfuric acid to
improve color, odor, and other properties.

ACOUSTIC LOG - A generic term for a well log that displays any of several measurements
of acoustic waves in rocks exposed in a borehole, e.g., compressional-wave transmit time
over an interval (sonic log) or relative amplitude (cement bond log).

AMINE - Organic base used in refining operations to absorb acidic gases (H2S, COS, CO2)
occurring in process streams. Two common amines are monoethanolamine (MEA) and
diethanolamine (DEA).

AMINE UNIT - A natural gas treatment unit for removing contaminants (H2S, COS, CO2) by
the use of amines. Amine units are often skid-mounted so they can be moved to the site of
new gas production. Gas containing H2S and other impurities must be cleaned up before it
is acceptable to gas transmission pipelines.

APPRAISAL DRILLING - Wells drilled in the vicinity of a discovery or wildcat well in order to
evaluate the extent and the importance of the find.

AREA OF INTEREST - The area immediately surrounding a successful well in which the
investors (in the good well) have an implied right to participate in any future wells drilled by
the same operator.

ARTIFICIAL LIFT - Pumping an oil well with a rod, tubing, or bottom-hole centrifugal pump
may be termed artificially lifting crude oil to the surface or doing so by mechanical means.

ASSIGNMENT - In oil and gas usage, assignment is a transfer of a property or an interest

in an oil or gas property; most commonly, the transfer of an oil or gas lease. The assignor
does the transferring and the assignee receives the interest of property.

ASSOCIATED GAS - Gas that occurs with oil, either as free gas or in solution. Gas
occurring alone in a reservoir is unassociated gas.

ATTIC OIL - An unscientific, but descriptive term for the oil above the borehole in horizontal
wells; oil in the top few feet of a productive interval which will gravitate or be pressured into
the horizontal drain hole.

AUSTRALIAN OFFSET - A humorous reference to a well drilled miles away from proven
production.

BACK-IN-PROVISION - A term used to describe a provision in a farmout agreement

whereby the person granting the farmout (the farmor) has the option to exchange a retained
override for a share of the working interest.

BASKET PRICE - The blanket or average price of crude oil on the world market. For
example, the basket price of $18.00/bbl. could mean average price of average gravity.
Lower-gravity crude with high-transit cost would bring less than $18.00, and conversely,
higher gravity crude with low sulfur and close to market would be a premium - a basket of
crude oils of differing gravities, sulfur content, sweet and sour.
BATTERY - Two or more tanks connected together to receive oil production on a lease;
tank battery.

BEHIND THE PIPE - Refers to oil and gas reservoirs penetrated or passed through by
wells, but never tapped or produced. Behind the pipe usually refers to tight formations of
low permeability that, although recognized, were passed through because they were
uneconomical to produce at the time. Today, however, with the growing scarcity of oil and
high prices, many of these passed-through formations are getting a second look by
producers.

B.H.T. - Bottom-hole temperature. In deep wells, 15,000 feet and deeper, bottom-hole
temperatures are above the boiling point of water, ranging up to 400 degrees Fahrenheit. At
these depths and temperatures, water-base drilling muds can not be used, only oil-based.

BIOGENESIS - Formed by the presence or the actions of living organisms, for example,
coral reefs and atolls. Biogenesis is also the theory that all life is derived from previously
living organisms.

BIT, ROTARY - The tool attached to the lower end of the drillpipe; a heavy steel head
equipped with various types of cutting or grinding teeth. Some are fixed; some turn on
bearings. A hole in the bottom of the drill permits the flow of drilling mud being pumped
down through the drillpipe to wash the cuttings to the surface and also cool and lubricate
the bit.

BIT, SPUDDING - A bit used to start the borehole; a bit that is some variation of the fishtail
or drag bit, one used in soft, unconsolidated, near-surface material.

BLINDPOOL - Money put into a drilling fund that is held by the fund managers until likely
prospects for drilling are found or come along. The rationale for the blind fund is that with
ready money, the fund managers can act quickly when good opportunities for investment
arise. Blind fund money usually is kept in an interest-bearing account while waiting for a hot
prospect.

BLOWING A WELL - Opening a well to let it blow for a short period to free the well tubing or
casing of accumulations of water, sand, or other deposits.

BLOWOUT - Out-of-control gas and/or oil pressure erupting from a well being drilled; a
dangerous, uncontrolled eruption of gas and oil from a well; a wild well.

BLOWOUT PREVENTER - A stack or an assembly of heavy-duty valves attached to the

top of the casing to control well pressure; a “Christmas tree”.

BONUS - Usually, the bonus is the money paid by the lessee for the execution of an oil and
gas lease by the landowner. Another form is called an oil or royalty bonus. This may be in
the form of an overriding royalty reserved to the landowner in addition to the usual one-
eighth royalty.

BOREHOLE - The hole in the earth made by the drill; the uncased drill hole from the
surface to the bottom of the well.

B.P.M. - Barrels per minute. The pumping rate of small rotary pumps.
BRIDGE PLUG - An expandable plug used in a well’s casing to isolate producing zones or
to plug back to produce from a shallower formation; also to isolate a section of the borehole
to be filled with cement when a well is plugged.

BUTANE - A hydrocarbon fraction; at ordinary atmospheric conditions, butane is a gas but it

is easily liquefied; one of the most useful L.P.-gases; widely used household fuel.

BUTANE SPLITTER - A type of fractionator vessel at a gas reformer plant that produces
commercial propane as well as normal and isobutanes. Splitters are fired with natural gas
to provide heat for the distillation.

CARRIED WORKING INTEREST - A fractional interest in an oil and gas property conveyed
or assigned to another party by the operator or owner of the working interest. In its simplest
form, a carried working interest is exempt from all costs of development and operation of
the property. However, the carried interest may specify “to casing point”, “to setting of
tanks”, or “through well completion”. If the arrangement specifies through well completion,
then the carried interest may assume the equivalent fractional interest of operating costs
upon completion of the well. There are many different types of carried interests, the details
varying considerably from arrangement to arrangement. One authority has observed, “The
numerous forms this interest is given from time to time make it apparent the term ‘carried
interest’ does not define any specific form of agreement but serves only as a guide in
preparing and interpreting instruments”.

CASING POINT - A term that designates a time when a decision must be made whether
casing is to be run and set or the well abandoned and plugged. In a joint operating
agreement, casing point refers to the time when a well has been drilled to objective depth,
tests made, and the operator notifies the drilling parties of his recommendation with
respect to setting casing and a production string and completing the well. On a marginal
well, the decision to set pipe is often difficult. To case a well often costs as much as the
drilling. On a very good well there is no hesitation; the operators are glad to run casing and
complete the well.

CEMENT, TO - (1) To fix the casing firmly in the hole with cement, which is pumped
through the drillpipe to the bottom of the casing and up into the annular space between the
casing and the walls of the well bore. After the cement sets (hardens), it is drilled out of the
casing. The casing is then perforated to allow oil and gas to enter the well. (2) Sedimentary.
Mineral material, usually precipitated chemically, that fills the spaces between individual
grains of a consolidated (hard) sedimentary rock; the binding material that holds the grains
together. The most common binders are silica, carbonates, and certain iron oxides. Other
cements are clay minerals, barite, gypsum, anhydrite, and pyrite.

CHRISTMAS TREE - (1) An assembly of valves mounted on the casinghead through which
a well is produced. The Christmas tree also contains valves for testing the well and for
shutting it in if necessary. (2) A subsea production system similar to a conventional land
tree except it is assembled complete for remote installation on the seafloor with or without
diver assistance. The marine tree is installed from the drilling platform; it is lowered into
position on guide cables anchored to foundation legs implanted in the ocean floor. The tree
is then latched mechanically or hydraulically to the casinghead by remote control.

COMPLETION - To finish a well so that it is ready to produce oil or gas. After reaching total
depth (T.D.), casing is run and cemented; casing is perforated opposite the producing zone,
tubing is run, and control and flow valves are installed at the wellhead. Well completions
vary according to the kind of well, depth, and the formation from which the well is to
produce.

COMPLETION FUNDS - Completion funds are formed to invest in well completions, to

finance the completing and equipping of a potentially productive well. After a well is drilled
into a productive formation, there remain the costs of setting pipe, (casing the well);
perforating, testing, acidizing, or fracturing the formation; and running production tubing and
installing pumping equipment, separators, stock tanks, etc. The operator who drills the well
may not have the financial resources to complete the well, so he may sell part or all of his
interests to a completion fund. Completion funds are not as risky an investment as drilling
funds, but are less certain than income funds and royalty funds.

CORE SAMPLE - A solid column of rock, usually from 2 - 4 inches in diameter, taken from
the bottom of a well bore as a sample of an underground formation. Cores are also taken in
geological studies of an area to determine the oil and gas prospects.

CRUDE OIL - Oil as it comes from the well; unrefined petroleum.

DEPOSIT - An accumulation of oil or gas capable of being produced commercially.

DERRICK - A wooden or steel structure built over a wellsite to provide support for drilling
equipment and a tall mast for raising and lowering drillpipe and casing; a drilling rig.

DEVELOPMENT WELLS - Wells drilled in an area already proved to be productive.

DISCOVERY WELL - An exploratory well that encounters a new and previously untapped
petroleum deposit; a successful wildcat well. A discovery well may also open a new horizon
in an established field.

DOWNHOLE - A term to describe tools, equipment, and instruments used in the well bore;
also conditions or techniques applying to the well bore.

DRILLING PERMIT - In states that regulate well spacing, a drilling permit is the
authorization to drill at a specified location; a well permit.

DRY GAS - A natural gas from the well free of liquid hydrocarbons; gas that has been
treated to remove all liquids; pipeline gas.

EFFECTIVE POROSITY - The percent of the total volume of rock that consists of
connecting pores or interstices. The part of a rock that is capable of holding a fluid (oil,
water, or gas) is the effective porosity.

ELECTRIC LOG -An electrical survey made on uncased holes. A special tool is lowered
into the hole which ejects an electrical current into the rock and records its resistance to the
current. The data from the survey is used by the geologist to determine the nature of the
rock and its contents.
EXPLORATION - A general term referring to all efforts made in the search for new deposits
of oil and gas.

FLOWING WELL -A well capable of producing oil or gas by its own energy without the aid
of a mechanical pump. Normally a pump is put on the well after the pressure reduction
inhibits the rate of production. FRACING - The process of pumping fluids into a productive
formation at high rates of injection to hydraulically break the rock. The "fractures" which are
created in the rock act as flow channels for the oil and gas to the well.

FIELD BUTANES - A raw mix of natural gas liquids; the product of gas processing plants in
the field. Raw mix streams are sent to fractionating plants where the various components -
butane, propane, hexane, and others - are separated. Some refineries are capable of using
field butanes at 10 to 15 percent of charge stock.

FIELD POTENTIAL - The producing capacity of a field during a 24-hour period.

FLARE - (1) To burn unwanted gas through a pipe or stack (Under conservation laws, the
flaring of natural gas is illegal.) (2) The flame from a flare; the pipe or the stack itself.

FOSSIL ENERGY - Energy derived from crude oil, natural gas, or coal.

GAS - “Any fluid, combustible or noncombustible, which is produced in a natural state from
the earth and which maintains a gaseous or rarified state at ordinary temperature and
pressure conditions”. Code of Federal Regulations, Title 30, Mineral Resources, Chap. II,
Geological Survey, 221.2

GAS CAP - The portion of an oil-producing reservoir occupied by free gas; in a free state
above an oil zone.

GAS WELL - A well that produces natural gas which is not associated with crude oil.
GEOLOGY - The science of the history of the Earth and its life as recorded in rocks.

HYDROCARBONS - Organic chemical compounds of hydrogen and carbon atoms. There

are a vast number of these compounds, and they form the basis of all petroleum products.
They may exist as gases, liquids, or solids. An example of each is methane, hexane, and
asphalt.

IDC - (Intangible Drilling Costs) All cost incurred in drilling a well other than equipment or
leasehold. These expenses are 100% tax deductible even if the well is productive.

IP - (Initial Production) Production from a well is generally broken down into three
categories: a. Flush or Initial b. Settled c. Stripper. It is important to realize that a well
cannot maintain the flow rates it made during the first stages of its life.
 J

No definitions.

No definitions.

LIGHT ENDS - The more volatile products of petroleum refining, e.g., butane, propane, and
gasoline.

No definitions.

NON-COMMERCIAL - A well that is not capable of producing enough oil to pay for the
drilling.

NRI - (Net Revenue Interest) That percent of the production revenue allocated to the
working interest after first deducting proceeds allocated to royalty and overriding interest.

OFFSET WELL - (1) A well drilled on the next location to the original well. The distance
form the first well to the offset well depends upon spacing regulations and whether the
original well produces oil or gas. (2) A well drilled on one tract of land to prevent the
drainage of oil or gas to an adjoining tract where a well is being drilled or is already
producing.

OIL - A liquid hydrocarbon. (see "Crude Oil")

OIL BEHIND THE PIPE - Refers to oil and gas sands or formations knowingly passed
through, never produced. Such formations usually were of low permeability (tight
formations) that, say 20 years ago, were uneconomical to produce when oil was around $5
or less a barrel. Other times formations would be purposely ignored because the operator
was going deeper for bigger game, so the less-spectacular, plain-Jane sands were cased
off. When the price of crude oil reached $30 per barrel, the bypassed formations looked
pretty good and were opened up and produced.

OIL-CUT MUD - Drilling mud with which crude oil has been unintentionally mixed. This may
occur when drilling into or through an oil-bearing formation whose pressure is sufficient to
overcome the pressure or weight of the column of mud in the hole. Oil also may become
mixed with the drilling mud when a drillstem test is taken.

OIL GRAVITY - The most widely used indicator of a crude oil's worth to the producer is its
API gravity. Normally, the price which a producer receives for his oil depends on its gravity,
the less dense oils (higher API gravity) being the most valuable. This price schedule is
based on the premise that the lighter oil contains higher percentages of the more valuable
products such as gasoline. API Gravity (degrees) = (141.5/sp.gr.) - 131.5.

OIL IN PLACE - Crude oil estimated to exist in a field or a reservoir; oil in the formation not
yet produced

OIL & GAS LEASES - A contract between an oil operator and a landowner which gives the
operator the right to drill for oil and gas on his property for a consideration. It is simply a
"ticket to hunt".

ON THE PUMP - An expression that means a well is incapable of flowing and that the oil is
being pumped to the surface by a "pumping unit".

OPEN HOLE - An uncased well bore; the section of the well bore below the casing; a well
in which there is no protective string of pipe.

OPEN-HOLE LOGGING - Logging operations in an uncased well bore. The well is logged
below the relatively shallow surface pipe.

OPERATING EXPENSE - The expenses incurred through the operation of producing

properties.

ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES (OPEC) - Oil producing and

exporting countries in the Middle East, Africa, and South America that have organized for
the purpose of negotiating with oil companies on matters of oil production, prices, and
future concession rights. OPEC was created in 1960.

PACKER - An expanding plug used in a well to seal off certain secti0ons of the tubing or
casing when cementing and acidizing or when a production formation is to be isolated.
Packers are run on the tubing or the casing and when in position can be expanded
mechanically or hydraulically against the pipe wall or the wall of the well bore.

PARAFFIN - A white, odorless, tasteless, chemically inert, waxy substance derived from
distilling petroleum; a crystalline, flammable substance composed of saturated
hydrocarbons.

PAYOUT - When the costs of drilling, producing and operating have been recouped from
the sale of products on a well.

PERFORATING GUN - A special tool used downhole for shooting holes in the well’s casing
opposite the producing formation. The gun, a steel tube of various lengths, has steel
projectiles placed at intervals over its outer circumference, perpendicular to the gun’s long
axis. When lowered into the well’s casing on a wireline opposite the formation to be
produced, the gun is fired electrically, shooting numerous holes in the casing that permit the
oil or gas to flow into the casing.

PERMEABILITY - A measure of the resistance of rock to the movement of fluids. Rocks

may have holes or void spaces in them (porosity), but if these holes do not connect, the
permeability can be drastically reduced.
PINCHOUT - The disappearance or “wedging out” of a porous, permeable formation
between two layers of impervious rock. The gradual, vertical “thinning” of a formation, over
a horizontal or near-horizontal distance, until it disappears.

PIPELINE GAS - Gas under sufficient pressure to enter the high-pressure gas lines of a
purchaser; gas sufficiently dry so that liquid hydrocarbons - natural gasoline, butane, and
other gas liquids usually present in natural gas - will not condense or drop out in the
transmission lines.

PLUG - To fill a well’s borehole with cement or other impervious material to prevent the flow
of water, gas or oil from one strata to another when a well is abandoned; to screw a metal
plug into a pipeline to shut off drainage or to divert the stream of oil to a connecting line to
stop the flow of oil or gas.

PLUGGING A WELL - To fill up 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. In the industry’s
early years, wells were often improperly plugged or left open. Modern practice requires that
an abandoned well be properly and securely plugged.

POROSITY - A measure of the relative volume of void space in rock to the total rock
volume. These spaces or pores are where oil and gas accumulate; therefore, a formation
containing a high percentage of porosity can contain more hydrocarbons.

PROVEN RESERVES - Oil and gas which has not been produced but has been located
and is recoverable.

PUMP, CASING - A sucker-rod pump designed to pump oil up through the casing instead
of the more common method of pumping through tubing. A casing pump is run into the well
on the sucker rods; a packer on the top or bottom of the pump barrel provides packoff or
seal between the pump and the wall of the casing at any desired depth. Oil is discharged
from the pump into the casing and out the wellhead.

PUMP, ROD - A class of downhole pumps in which the barrel, plunger, and standing valve
are assembled and lowered into the well through the tubing. When lowered to its pumping
position, the pump is locked to the tubing to permit relative motion between plunger and
barrel. The locking device is a holddown and consists either of cups or a mechanical, metal-
to-metal seal.

PUMPING UNIT - A pump connected to a source of power; an oil-well pumping jack; a

pipeline pump and engine.

PUMPER - An employee of an operator who is responsible for gauging the oil and gas sold
off the leases he has been assigned and who is also responsible for maintaining and
reporting the daily production.

No definitions.

REAL ESTATE INVESTMENT TRUSTS (REITs) - A trust or association that invests in a

variety of real estate. REITs are managed by one or more trustees, like a mutual fund, and
trade like a stock. No federal income tax needs to be paid by the trust if 75% of the income
is real-estate related and 95% of the income is distributed to investors. Individual investors
can be taxed.

REEF RESERVOIR - A type of reservoir trap composed of rocks, usually limestone, made
up of the skeletal remains of marine animals. Reef reservoirs are often characterized by
high initial production that falls off rapidly, requiring pressure maintenance techniques to
sustain production.

RESERVOIR - A porous, permeable sedimentary rock formation containing quantities of oil

and/or gas enclosed or surrounded by layers of less-permeable or impervious rock; a
structural trap; a stratigraphic trap.

REWORK OPERATIONS - Any major operation performed on a well after its completion in
an attempt to restore or improve its ability to produce.

ROTARY TONGS - The massive, counter-weighted tongs used on the drill floor to screw
joints of drillpipe, tubing or casing; the generic term for the heavy wrenches used by the
rough necks on the rig floor.

ROYALTY, LANDOWNER’S - A share of gross production of oil and gas, free of all costs of
production. Occasionally, the term is used to describe an interest in production created by
the landowner outside the lease and distinguished from the conventional lessor’s royalty. In
this case the landowner’s royalty, outside of the lease, may have any specified duration. In
general usage, landowner’s and lessor’s royalty are synonymous.

SALT WATER DISPOSAL WELL - Many wells produce salt water while producing oil. The
disposal of this water is a problem to an operator because of pollution. The best solution to
the problem is to pump the waste back into a formation that is deep enough not to pollute
shallow water sands. Many stripper wells which are no longer commercial are converted for
this purpose.

SATURATION - (1) The extent to which the pore space in a formation contains
hydrocarbons or connate water. (2) The extent to which gas is dissolved in the liquid
hydrocarbons in a formation.

SCOUT TICKETS - A written report of wells drilling in the area. The reports contain all
pertinent information - all that can be found out by the enterprising oil scout; operator,
location, lease, drilling contractor, depth of well, formations encountered, results of drillstem
tests, logs, etc. On tight holes the scout is reduced to surreptitious means to get
information. Talks to water hauler, to well-service people who may be talkative or
landowner’s brother-in-law. The bird-dogging scout estimates the drillpipe set-backs for
approximate depth; he notes the acid trucks or the shooting (perforating) crew; and through
his binoculars, he judges the expressions on the operator’s face: happy or disgruntled.

SECONDARY RECOVERY - A broad term encompassing any method of extracting oil from
a reservoir after a well or field has exhausted its primary production.

SEDIMENTARY ROCKS - Rock is generally classified in one of three categories: a.

Sedimentary; b. Igneous; c. Metamorphic.
SEPARATOR GAS - Natural gas separated out of the oil by a separator at the well.

SET CASING - To cement casing in the hole. The cement is pumped downhole to the
bottom of the well and is forced up a certain distance into the annular space between
casing and the rock wall of the drill hole. It is then allowed to harden, thus sealing off upper
formations that may contain water. The small amount of cement in the casing is drilled out
in preparation for perforating to permit the oil to enter the casing. The decision to set casing
(or pipe) is an indication that the operator believes he has a commercial well.

SETTLED PRODUCTION - The second phase of production in the producing life of a well.
(see IP).

SHALE - A very fine-grained sedimentary rock formed by the consolidation and

compression of clay, silt, or mud. It has a finely laminated or layered structure. Shale
breaks easily into thin parallel layers; a thinly laminated siltstone, mudstone, or claystone.
Shale is soft, but sufficiently hard packed (indurated), so as not to disintegrate upon
becoming wet. However, some shales absorb water and swell considerable, causing
problems in well drilling. Most shales are compacted, and consequently, do not contain
commercial quantities of oil and gas.

SHOT HOLE - A small-diameter hole, usually drilled with a portable, truck-mounted drill, for
“planting” explosive charges in seismic operations.

SHUT IN - To close the valves at the wellhead so that the well stops flowing or producing;
also describes a well on which the valves have been closed.

SOUR GAS - Natural gas containing chemical impurities, a notable hydrogen sulfide (H2S)
or other sulfur compounds that make it extremely harmful to breathe even small amounts; a
gas with disagreeable odor resembling that of rotten eggs.

SQUEEZING A WELL - A technique to seal off with cement a section of the well bore where
a leak or incursion of water or gas occurs; forcing to the bottom of the casing and up the
annular space between the casing and the wall of the borehole to seal off a formation or
plug a leak in the casing; a squeeze job.

STRATIGRAPHIC TEST - A test well drilled to obtain information on the thickness,

lithology, porosity, and permeability of the rock layers drilled through or to locate a key bed.
Such wells are often drilled to evaluate a potentially productive pay zone.

STRIPPER WELL - The final state in the life of a producing well.

STRUCTURAL TRAP - A fold or break (or both) in the earth's crust which creates an
impervious trap for oil and gas. Oil will migrate underground through rock until it is
"trapped".

SUCKER ROD - Steel rods that are screwed together to form a “string” that connects the
pump inside a well’s tubing downhole to the pumping jack on the surface; pumping rods.

SURFACE PIPE - Pipe which is set with cement through the shallow water sands to avoid
polluting the water and keep the sand from caving in while drilling a well.

SWAB - A tool which is lowered down the pipe on a wire line. The "swab" is then pulled out
of the hole. As it travels up the pipe, rubber elements expand so that the fluid in the pipe is
trapped above the swab and pushed to the surface. This operation is necessary when the
formation pressure is not high enough to blow the fluids in the pipe to the surface.

SWEET CRUDE - Crude oil containing very little sulfur and having a good odor.

SWEET GAS - Natural gas free of significant amounts of hydrogen sulfide (H2S) when
produced.

3-D SEISMIC PROGRAM - Seismic surveys shot from surfaces to map underground
stratigraphy; to profile the underlying strata in search of up-dips, down dips, faults, and
other promising anomalies.

TANK BATTERY - A group of tanks at a well site used to store oil prior to sale to a pipeline
company.

TESTING - When each new well is competed, a series of tests are run on the well. The
various tests are used to estimate the daily deliverability, payout, and reserves.

TIGHT HOLE - A drilling well about which all information - depth, formations encountered,
drilling rate, logs - is kept secret by the operator.

TOTAL DEPTH (T.D.) - The depth of a well when drilling is completed. Total depth of a well
is the vertical distance from the rig floor to the bottom of the hole. A 10,000-foot well may
take 11,300 feet of casing to complete the well because the well bore has drifted several
degrees from vertical, adding 1,300 feet to the depth of the hole, not the depth of the well.

TRAP - A type of geological structure that retards the free migration of oil and concentrates
the oil in a limited space. A mass of porous, permeable rock that is sealed on top and down
both flanks by nonporous, impermeable rock, thus forming a trap.

TUBING - Small diameter pipe which is installed in the casing. Oil is produced through
tubing because it increases the viscosity of fluid and a well's flow capabilities.

TURNKEY CONTRACT - A contract in which an operator or drilling contractor agrees to

furnish all labor and materials necessary to drill a well to a certain depth or stage of
completion for a specified sum of money. The operator or contractor assumes all of the
responsibility and risks involved in completing the operation.

UNASSOCIATED GAS - Natural gas occurring alone, not in solution or as free gas with oil
or condensate.

VISCOSITY - The resistance of fluid to flow. A high viscosity fluid will not flow as easily as a
low viscosity fluid (Mud will not move as easily as water).

W
WATER CONNING - The encroachment of water in a well bore in a water-drive reservoir
owing to an excessive rate of production. The water below the oil moves upward to the well
bore through channels, fissures, and permeable streaks, leaving the oil sidetracked and
bypassed.

WATER FLOODING - A secondary recovery method for the production of oil from a
formation. Oil will float on water. When water is injected into some formations, the oil will
float or be washed to the surface, thereby, increasing the amount of production from a well
or field. Some formations will not react to this type of stimulation.

WELL COMPLETION - The work of preparing a newly drilled well for production. This is a
costly procedure and includes setting and cementing the casing, perforating the casing,
running production tubing, hanging the control valves (nippling up the production tree, i.e.,
Christmas tree), connecting the flow lines, and erecting the flow tanks or lease tanks.

WELL COST, AVERAGE - In 1983, the average cost to drill, case, and complete a well was
$410,000. Included in this average were many deep, multimillion dollar wells - the 15,000 to
25,000-foot gas wells - any many thousands of shallower wells costing $250,000 or even
less.

WELL LOGGING - Gathering and recording information about the surface formation, the
nature and extent of the various downhole rock layers. Also included are records kept by
the driller, the record of cuttings, core analysis drillstem tests, and electric, acoustic, and
radioactivity logs. Any pertinent information about a well, written and saved, is a log - from
sailing ship days.

WHIPSTOCK - A tool used at the bottom of the borehole to change the direction of the
drilling bit. The whipstock is, essentially, a wedge that crowds the bit to the side of the hole,
causing it to drill at an angle to the vertical.

WHITE OIL - A colloquial term for condensate, gas condensate, casinghead gasoline; liquid
hydrocarbons produced with natural gas.

WILDCAT - A well that is drained one or more miles from a proven well.

WORKING INTEREST - A working interest in an oil or gas property is one that is burdened
with the cost of development and operation of the property, such as the responsibility to
share expenses of drilling completing or operating an oil and gas property, according to
working or operating mineral interest in any tract or parcel of land. Rights to overriding
royalties, production payments, and the like do not constitute working interests because
they are not burdened with the responsibility to share expenses of drilling, completing, or
operating oil and gas property. Likewise, contract rights to extract or share in oil and gas, or
in the profits from extraction, without liability to share in the costs of production do not
constitute working interests.

WORKING INTEREST, FULL-TERM - A working interest that lasts as long as the well or
the lease is productive; as long as oil and gas are produced in quantities that make the well
economic to operate.

WORKOVER - Operations on a producing well to restore or increase production. Tubing is

pulled and the casing at the bottom of the well is pumped or washed free of sand that may
have accumulated.
WRITE-OFFS - That portion of an oil investment which is deductible for tax purposes. All
intangibles are deductible.