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“Delay rental”
Payment made to the lessor under a non-producing oil and natural gas lease at the beginning or end of each year
to continue the lease in force for another year during its primary term.
“Development”
The phase in which an oil field is brought into production by drilling development wells and installing
appropriate production systems.
“Development
well”
A well drilled to a known formation in a discovered field, usually offsetting a producing well on the same or an
adjacent oil and natural gas lease.
“Drilling and
completion costs”
All costs, excluding operating costs, of drilling, completing, testing, equipping and bringing a well into
production or plugging and abandoning it, including all labor and other construction and installation costs
incident thereto, location and surface damages, cementing, drilling mud and chemicals, drillstem tests and core
analysis, engineering and well site geological expenses, electric logs, costs of plugging back, deepening, rework
operations, repairing or performing remedial work of any type, costs of plugging and abandoning any well
participated in by us, and reimbursements and compensation to well operators.
“Dry hole”
An exploration, appraisal or development well that proves to be incapable of producing either oil or gas in
sufficient quantities to justify completion as an oil or gas well.
“DST”
Drill stem test
“E&P”
Exploration and production.
“EPSC”
Exploration and Production Sharing Contract.
“Exploration well”
A well drilled either (a) in search of a new and as yet undiscovered pool of oil or natural gas or (b) with the hope
of significantly extending the limits of a pool already developed.
“Farm-out”
An agreement whereby the owner of the leasehold or working interest agrees to assign a portion of his interest in
certain acreage subject to the drilling of one or more specific wells or other performance by the assignee as a
condition of the assignment. Under a farm-out, the owner of the leasehold or working interest may retain some
interest such as an overriding royalty interest, an oil and natural gas payment, offset acreage or other type of
interest.
“Field”
A geographical area under which an oil or natural gas reservoir lies in commercial quantities.
“FERC”
Federal Energy Regulatory Commission
“FPSO”
Floating Production, Storage and Offloading system.
“Gathering
system”
Pipelines and other facilities that transport oil from wells and bring it by separate and individual lines to a central
delivery point for delivery into a transmission line or mainline.
“Gross acre”
An acre in which a working interest is owned. The number of gross acres is the total number of acres in which an
interest is owned.
“Horizon”
A zone of a particular formation; that part of a formation of sufficient porosity and permeability to form a
petroleum reservoir.
“IQE”
Independent Qualified Estimator.
“Leases”
Full or partial interests in oil or natural gas properties authorizing the owner of the lease to drill for, produce and
sell oil and natural gas upon payment of rental, bonus, royalty or any other payments.
“MBOE”
Thousand barrels of oil equivalent. Natural gas is converted on the basis of six Mcf of gas per one barrel of crude
oil equivalent. This ratio reflects an energy content equivalency and not a price or revenue equivalency.
“MMBOE”
Million barrels of oil equivalent. Natural gas is converted on the basis of six Mcf of gas per one barrel of crude
oil equivalent. This ratio reflects an energy content equivalency and not a price or revenue equivalency.
“Mcf”
Thousand cubic feet.
“MMBbls”
Million barrels.
“MMBtu”
Million British thermal units.
“MMCFD”
Million cubic feet per day.
“Natural gas”
Natural gas is a combination of light hydrocarbons that, in average pressure and temperature conditions, is found
in a gaseous state. In nature, it is found in underground accumulations, and may potentially be dissolved in oil or
may also be found in its gaseous state.
