Glossary of Terms
Bbl One stock tank barrel, or 42 U.S. gallons liquid volume, of crude oil or other liquid hydrocarbons.
Bcf One billion cubic feet of natural gas.
Bcfe One billion cubic feet of natural gas equivalent.
BOE One barrel of oil equivalent, converting natural gas to oil at the ratio of 6 Mcf of natural gas to 1 Bbl of oil.
BTU British Thermal Unit.
MBbl One thousand barrels.
MBOE One thousand BOE.
Mcf One thousand cubic feet of natural gas.
Mcfe One thousand cubic feet of natural gas equivalent, converting oil or condensate to natural gas at the ratio of 1 Bbl of oil or condensate to 6 Mcf of natural gas.
MMBbl One million barrels of oil or other liquid hydrocarbons.
MMBOE One million BOE.
MMBTU One million British Thermal Units.
MMcf One million cubic feet of natural gas.
MMcfe One million cubic feet of natural gas equivalent.
Casing Steel pipe used to protect the wellbore from caving in. When casing is cemented in place, it forms a hydraulic seal with the rock formations, preventing well fluid from migrating up or down the outside of the casing. It also keeps the well fluids separate from groundwater sources adjacent to the wellbore.
Condensate An oil-like liquid produced in association with natural gas production that condenses from natural gas as it is produced and delivered into a separator or similar equipment and collected in tanks at each well prior to the delivery of such natural gas to the natural gas gathering pipeline system.
EUR Estimated total (ultimate) recovery of oil or gas expected from a reservoir during its productive lifetime.
Fracturing (fracing) The process of injecting fluid under pressure to facilitate the production of oil and natural gas. When a well is drilled into reservoir rock that contains oil, natural gas, and water, the injected fluid opens fractures in the rock, after which an agent (typically sand carried by high-viscosity additives) is pumped into the fractures to keep them from closing when the pumping pressure is released. Fracturing allows oil or natural gas to move more freely from the rock pores to a production well so that it can be brought to the surface.
Gross oil and natural gas wells or acres The Company’s gross wells or gross acres represent the total number of wells or acres in which the Company owns a working interest.
Hydrocarbon An organic chemical compound containing only a hydrogen and carbon atom. These compounds form the basis of all petroleum products. Hydrocarbons can be liquid, solid, or gaseous.
Net oil and natural gas wells or acres Determined by multiplying gross oil and natural gas wells or acres by the working interest that the Company owns in such wells or acres represented by the underlying properties.
OGIP Original gas in place. The total natural gas estimated to have originally existed in the earth's crust in naturally occurring accumulations including both discovered and undiscovered resources.
Prospect A location where hydrocarbons such as oil and gas are believed to be present in quantities which are economically feasible to produce.
Proved developed reserves Proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.
Proved oil and natural gas reserves Proved oil and natural gas reserves are the estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.
Proved undeveloped reserves Proved reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required.
Reservoir Porous and permeable subsurface formation that contains oil or gas and is surrounded by rock that separates the oil or gas contents from other reservoirs.
Seismic data Oil and natural gas companies use seismic data as their principal source of information to locate oil and natural gas deposits, both to aid in exploration for new deposits and to manage or enhance production from known reservoirs. To gather seismic data, an energy source is used to send sound waves into the subsurface strata. These waves are reflected back to the surface by underground formations, where they are detected by geophones which digitize and record the reflected waves. Computers are then used to process the raw data to develop an image of underground formations.
3-D Seismic Data 3-D seismic data is collected using a grid of energy sources, which are generally spread over several miles. A 3-D survey produces a three dimensional image of the subsurface geology by collecting seismic data along parallel lines and creating a cube of information that can be divided into various planes, thus improving visualization. Consequently, 3-D seismic data is generally considered a more reliable indicator of potential oil and natural gas reservoirs in the area evaluated.
Spudding The act of beginning to drill a borehole, usually starting with driving a piece of large diameter pipe (casing) into the ground to guide the bit and protect the surface immediately surrounding the borehole.
Standardized measure of discounted future net cash flows, after income taxes The present value, discounted at 10%, of the pre-tax future net cash flows attributable to estimated net proved reserves. The Company calculates this amount by assuming that it will sell the oil and natural gas production attributable to the proved reserves estimated in its independent engineer’s reserve report for the oil and natural gas spot prices on the last day of the year, adjusted for quality and transportation. The Company also assumes that the cost to produce the reserves will remain constant at the costs prevailing on the date of the report. The assumed costs are subtracted from the assumed revenues resulting in a stream of future net cash flows. Estimated future income taxes, using rates in effect on the date of the report, are deducted from the net cash flow stream. The after-tax cash flows are discounted at 10% to result in the standardized measure of the Company’s proved reserves.
Standardized measure of discounted future net cash flows, before income taxes The discounted present value of proved reserves is identical to the standardized measure described above, except that estimated future income taxes are not deducted in calculating future net cash flows. The Company discloses the discounted present value without deducting estimated income taxes to provide what it believes is a better basis for comparison of its reserves to the producers who may have different income tax rates.
Tubing High-pressure pipe runs inside the casing through which the oil or gas is produced.
Working interest A real property interest entitling the owner to receive a specified percentage of the proceeds of the sale of oil and natural gas production or a percentage of the production, but requiring the owner of the working interest to bear the cost to explore for, develop and produce such oil and natural gas. A working interest owner who owns a portion of the working interest may participate either as operator or by voting his percentage interest to approve or disapprove the appointment of an operator and drilling and other major activities in connection with the development and operation of a property.