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Glossary of Terms
This glossary,
drawn from a variety of sources, is by no means an exhaustive list of terms
used in the oil and gas sector.
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- Acidizing:
- The technique of pumping a form of hydrochloric
acid down the well hole to enlarge the pore space in oil bearing rocks,
thus increasing oil flow and recovery.
- AGA:
- American Gas Association. Major natural gas
industry trade association, based in Alexandria, Virginia. AGA conducts
technical research and helps create standards for equipment and products
involved in every facet of the natural gas industry. It also compiles
statistics which are considered industry standards.
- Anticline:
- A fold in layered rocks originating below the
surface in the form of an elongated dome. Anticlines make excellent
drilling prospects since any oil in the deposit will naturally rise to the
highest point of the structure because oil has a lower specific gravity
than water.
- API
- American Petroleum Institute. The primary U.S. oil
industry trade association, based in Washington, D.C. API conducts
research and sets technical standards for industry equipment and products
from wellhead to retail outlet. It also compiles statistics which are
regarded as industry benchmarks.
- API gravity:
- The American Petroleum Institute scale used to
express the specific gravity of oils.
- Assay
- To test a metal or an oil for purity or quality.
- Associated gas:
- Natural gas found in association with oil in a
reservoir, either dissolved in the oil or as a cap above the oil.
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- Barge
- A vessel, either motorized or towed, used to carry
products in navigable waterways. Inland river barges that carry oil
products generally hold 25,000 barrels. Ocean-going barges range in size
up to 120,000 barrels.
- Barrel of oil:
- Measurements which equal a barrel of oil include
159 litres, 0.159 cubic metres, 35 Imperial gallons, 42 U.S. gallons.
- Barrel of oil equivalent (boe):
- A term frequently used to measure oil and gas on a
comparative basis. In Canada, 10 mcf of natural gas is equivalent to one
barrel of oil.
- Barrel of oil per day (bpd):
- The number of barrels of oil produced from a well
over a 24 hour period, normally an average figure from a longer period of
time.
- Batch:
- A measured amount in which crude oil and refined
product shipments are sent through a pipeline.
- Batching Sequence:
- The order in which shipments are sent through a
pipeline.
- Battery:
- Facility that stores and/or processes crude oil.
- Bcf:
- Billion cubic feet.
- B/D:
- Barrels per Day. Usually used to quantify a
refiner's output capacity or an oilfield's rate of flow.
- Bitumen:
- Heavy oil or petroleum in semi-solid or solid
forms. Bitumen generally has a density of less than 10 degrees API.
- Block:
- The subdivision of exploration and production
acreage.
- Blowouts:
- Uncontrolled releases of fluids, solids, or gases.
- Book value per share:
- Calculated by dividing owners equity by the number
of shares outstanding. This accounting calculation is typically
considerably lower than the actual share price because accounting
principles require the use of historical cost. Book value per share is an
estimation of what the company is worth if it were to be liquidated.
- British thermal unit (BTU):
- The amount of heat required to increase the
temperature of a pound of water 1o Fahrenheit. A Btu is used as a common
measure of heating value for different fuels. Prices of different fuels
and their units of measure (dollars per barrel of crude, dollars per ton
of coal, cents per gallon of gasoline, cents per thousand cubic feet of
natural gas) can be easily compared when expressed as dollars and cents
per million BTUs.
- Bunker C Fuel Oil (or bunkering fuel):
- Fuel used for ships. Generally refers to a No. 6
grade of residual fuel oil with an API gravity about 10.5o.
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- Casing:
- The process of lining a drilled hole with steel
pipe which is cemented in place to prevent caving in of the hole.
- Casinghead Gas:
- Gas present in an oil well that is removed when it
flows to the surface at the well's casing.
- Centrifugal pump:
- A rotating pump, used for pushing large volumes of
oil and gas through pipelines.
- CF/D:
- Cubic feet per day. Usually used to quantify the
rate of flow of a gas well or pipeline.
- Christmas tree:
- The arrangement of pipes and valves at the wellhead
which controls the flow of oil and gas and prevents blowouts.
- Completion:
- The procedure by which a successful well is readied
for production.
- Compressor station:
- Stations located every 60-80 km along a gas
pipeline which recompress gas to ensure an even flow.
- Concession:
- A defined license area granted to a company for the
exploration of oil and/or gas under specific terms and conditions for a
fixed period of time.
- Condensate:
- Any mixture of relatively light hydrocarbons which
remain liquid at normal temperature and pressure. Condensate generally
appears when gas is drawn from a well and its temperature and pressure
change sufficiently for some of it to become liquid petroleum.
- Conventional crude:
- Liquid petroleum that is capable of flowing
naturally without any processing.
- Crown lands:
- Government owned properties.
- Crude Oil:
- A mixture of hydrocarbons that exists as a liquid
in natural underground reservoirs and remains liquid at atmospheric
pressure after passing through surface separating facilities. Crude is the
raw material which is refined into gasoline, heating oil, jet fuel,
propane, petrochemicals, and other products.
- Cubic foot:
- The amount of gas required to fill a volume of one
cubic foot.
- Cubic feet per day (cf/d):
- The number of cubic feet of natural gas produced
from a well over a 24 hour period, normally an average figure from a
longer period of time. Generally expressed as mcf/d = thousand cubic feet
per day, mmcf/d = million cubic feet per day, or bcf = billion cubic feet
per day.
- Cushion Gas:
- The amount of gas required in a storage pool to
maintain sufficient pressure to keep the working gas recoverable.
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- Daisy chain:
- The process by which a cargo of oil or oil products
is sold many times before being delivered to the customer.
- Density:
- The gravity of crude oil. Density is measured in
kilograms of large, carbon-rich molecules per cubic metre or degrees on
the American Petroleum Institute (API) gravity scale.
- Derrick:
- Steel structure mounted over the bore hole to
support the drill pipe and other equipment which is lowered and raised
during drilling operations.
- Diesel Fuel:
- Distillate fuel oil used in compression-ignition
engines. It is similar to home heating oil, but must meet a cetane number
specification of 40 or more.
- Discovery well:
- An exploratory well that encounters a previously
untapped oil or gas deposit.
- Distillate Fuel Oil:
- Products of refinery distillation sometimes
referred to as middle distillates; kerosene, diesel fuel, and home heating
oil.
- Downstream sector:
- Refines and markets petroleum including pipeline
systems, refineries, gas distribution, and petrochemical companies.
- Drilling mud:
- A mixture of clays, water, and chemicals used in
drilling operations to lubricate and cool the drill bit, carry drilling
wastes to the surface, prevent the walls of the well from collapsing, and
to keep the upward flow of oil or gas under control.
- Drill string:
- Steel pipes roughly 10m long joined together to
form a pipe from the drill bit to the drilling platform. It is rotated
during drilling and is also the conduit for the drilling mud.
- Dry gas:
- Gas containing no water vapor, same as lean gas.
- Dry hole:
- An unsuccessful well, drilled without finding
commercial quantities of oil or gas.
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- Enhanced oil recovery (EOR):
- The recovery of oil from a reservoir other than by
the use of natural reservoir pressure. This can involve increasing the
pressure (secondary recovery) or heating or increasing the pore size of
the reservoir (tertiary recovery).
- Exploratory well:
- A well in an area where petroleum has not been
previously found or one targeted for formations above or below known
reservoirs.
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- Farm-in:
- An outside party paying a land owner all or a
percentage of the drilling costs of a well in order to obtain a working
interest in the land or well.
- Farm-out:
- The land owner gives a percentage of his land or a
portion of his working interest in a well in order to allow an outside
party to drill or explore on his property. This generally reduces risk as
capital is provided by the company farming-in.
- Fault:
- A geological structure consisting of a fracture in
the rock along which there has been an observable amount of displacement.
- Feedstock:
- The supply of crude oil, natural gas liquids, or
natural gas to a refinery or petrochemical plant or the supply of some
refined fraction of intermediate product to some other manufacturing
process.
- Field:
- The surface area above a petroleum formation.
- Flaring:
- The controlled and safe burning of gas which cannot
be used for commercial or technical reasons.
- Fractionation:
- The process whereby saturated hydrocarbons from
natural gas are separated into distinct parts or "fractions" such as
propane, butane, ethane, etc.
- Fuel Oil:
- Refined petroleum products used as a fuel for home
heating and industrial and utility boilers. Fuel oil is divided into two
broad categories, distillate fuel oil, also known as No. 2 fuel, gasoil,
or diesel fuel; and residual fuel oil, also known as No. 6 fuel, or
outside the United States, just as fuel oil. No. 2 fuel is a light oil
used for home heating, in compression ignition engines, and in light
industrial applications. No. 6 oil is a heavy fuel used in large
commercial, industrial, and electric utility boilers.
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- Gas cap:
- In a field containing both gas and oil, some gas
will often collect at the top of the reservoir in a single deposit known
as a gas cap.
- Gas field:
- A field or group of reservoirs of hydrocarbons
containing natural gas but insignificant quantities of oil.
- Gasoline, Straight-Run:
- Also known as raw gasoline. Gasoline which is
obtained directly from crude oil by fractional distillation. Straight-run
gasoline generally must be upgraded to meet current motor fuel
specifications.
- Gathering lines:
- Pipelines that move petroleum from wells to
processing or transmission facilities.
- Geophones:
- Sensors used in seismic surveys capable of
detecting the velocity of energy waves.
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- Heating Oil:
- No. 2 fuel oil, a distillate fuel oil used either
for domestic heating or in moderate capacity commercial-industrial
burners.
- Heavy crude:
- Oil with a gravity below 28 degrees API. Recovery
generally involves an application of heat and steam. Canadian pipelines
generally require oil to have a gravity of at least 21:2 degrees API.
Heavier crudes must be blended with condensate or NGLs to be shipped by
pipeline.
- Hydrocarbon:
- Any compound or mix of compounds, solid, liquid or
gas, comprised of carbon and hydrogen (e.g., coal, crude oil, and natural
gas).
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- Independent:
- Term generally applies to a non-integrated oil or
natural gas company, usually active in only one or two sectors of the
industry. An independent marketer buys petroleum products from major or
independent refiners and resells them under his own brand name or buys
natural gas from producers and resells it. There are also independents
which are active exclusively either in oil or gas production or refining.
- Infill drilling:
- Drilling more wells into the same pool so that oil
does not have to travel as far through the rock.
- Injection well:
- A well used for injecting fluids into a formation
in an attempt to increase recovery efficiency.
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- Jet Fuel:
- Kerosene-type; high-quality kerosene product used
primarily as fuel for commercial turbojet and turboprop aircraft engines.
- Joint venture:
- An investment undertaken by a consortium, usually
with one member acting as the operator.
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- Light crude:
- Oil with a gravity of 28 degrees API or higher.
High-quality light crude has a gravity of 40 degrees or higher.
- Liquified natural gas (LNG):
- Natural gas that has been liquified for ease of
transport by cooling the gas to -162·C. Natural gas has 600 times the
volume of LNG.
- Liquefied Petroleum Gas (LPG):
- Propane, butane, or propane-butane mixtures derived
from crude oil refining or natural gas fractionation. For convenience of
transportation, these gases are liquefied through pressurization.
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- Major
- A term broadly applied to those multinational oil
companies which by virtue of size, age, or degree of integration are among
the preeminent companies in the international petroleum industry.
- Market capitalization:
- Calculated by multiplying the number of outstanding
shares by the current stock price. This represents the market's valuation
of the company at that specific time.
- Maximum rate limit (MRL):
- The maximum rate at which a well is legally
permitted to produce, imposed by the Alberta Energy and Utilities Board.
- Maintenance:
- Routine repairs needed throughout the life of a
well, usually required more for oil than for gas wells.
- Mcf:
- Thousand cubic feet.
- Mercaptans:
- Strong smelling compounds of carbon, hydrogen, and
sulphur found in gas and oil. Sometimes added to natural gas for safety
reasons.
- Methane:
- The principal constituent of natural gas.
- Middle Distillate:
- Hydrocarbons that are in the so-called "middle
boiling range" of refinery distillation. Examples are heating oil, diesel
fuels, and kerosene.
- MMBtu:
- One million British thermal units, one dekatherm.
Approximately equal to a thousand cubic feet (Mcf) of natural gas.
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- Naphtha:
- A volatile, colorless product of petroleum
distillation. Used primarily as a paint solvent, cleaning fluid, and
blendstock in gasoline production.
- Naphthenes:
- One of the three basic hydrocarbon classifications
found naturally in crude oil. Naphthenes are widely used as petrochemical
feedstocks.
- Natural Gas:
- A naturally occurring mixture of hydrocarbon and
non-hydrocarbon gases found in porous rock formations. Its principal
component is methane.
- Natural Gas Liquids (NGL):
- A general term for all liquid products separated
from natural gas in a gas processing plant. NGLs include propane, butane,
ethane, and natural gasoline.
- Net Asset Value per Share (NAVPS):
- Is the estimated worth of the company based on the
current market value of all its assets less liabilities. Calculated by
taking the present value of the company's reserves, subtracting long-term
debt, and adding working capital. Usually discounted by 10-15%.
- Netback:
- The amount of money received per barrel of oil
equivalent produced after subtracting operating costs, royalties, and
general and administrative costs.
- Net debt:
- Long-term debt plus working capital.
- Non-associated Gas:
- Natural gas in a reservoir which contains no crude
oil.
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- Oil in place:
- The estimation of the real amount of oil in a
reservoir.
- OPEC:
- Organization of Petroleum Exporting Countries.
- Operator:
- The party responsible for exploration, development,
or production projects.
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- Permeability:
- The capacity of a reservoir rock to transmit
fluids.
- Petrochemical:
- An intermediate chemical derived from petroleum,
hydrocarbon liquids, or natural gas, such as ethylene, propylene, benzene,
toluene, and xylene.
- Petroleum:
- A natural mixture of hydrocarbons in gaseous,
liquid, or solid form.
- Pinnacle reef:
- A conical formation where hydrocarbons may be
trapped.
- Pipeline:
- A pipe through which oil or natural gas is pumped
between two points, either offshore or onshore.
- Pool:
- A natural underground reservoir that either
contains or appears to contain petroleum.
- Porosity:
- The open space within a rock, similar to a sponge.
- Possible reserves:
- An estimate of possible oil and/or gas reserves
based on geological and engineering data from undrilled or untested areas.
- Probable reserves:
- An estimate of oil and/or gas reserves based on
penetrated structures, but needing more advanced confirmation to be
classified as proven reserves.
- Processing:
- The separation of oil, gas, and natural gas liquids
and the removal of impurities.
- Proven reserves:
- The quantity of oil and gas estimated to be
recoverable from known fields under existing economic and operating
conditions. Determined on the basis of drilling results, production, and
historical trends.
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- Raw natural gas:
- Natural gas containing impurities and unwanted
substances that have to be removed.
- Recoverable reserves:
- The proportion of hydrocarbons that can be
recovered from a reservoir using existing techniques.
- Refinery:
- A complex of facilities where crude oil is
separated into light or heavy fractions which are then converted into
useable products.
- Reserve life index:
- The number of years it would take to deplete proven
reserves at the current production rate.
- Reserve replacement ratio:
- The quantity of added reserves for every barrel of
oil equivalent produced.
- Reservoir:
- Porous permeable rock containing petroleum.
- Rich gas:
- Gas which is predominately methane but with a
relatively high proportion of other hydrocarbons.
- Royalty holiday:
- The Alberta Energy Commission grants royalty free
wells in certain situations. For instance, the first 70,000 boe produced
from a horizontal well are generally royalty fee.
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- Seismic:
- Either two-dimensional or three-dimensional,
computer assisted processing of sedimentary structures, assist in planning
drilling programs.
- Solution gas:
- Natural gas which is dissolved in the crude oil
within the reservoir.
- Sour or Sweet Crude:
- Industry terms which denote the relative degree of
a given crude oil's sulfur content. Sour crude refers to those crudes with
a comparatively high sulfur content, 0.5% by weight and above; sweet
refers to those crudes with sulfur content of less than 0.5%.
- Sour gas:
- Contain large amounts of hydrogen sulphide or
sulphur. In order to become sweet gas, the sulphur must be removed.
- Spot market:
- An international market in which oil or oil
products are traded for immediate delivery at the current price.
- Spud:
- The commencement of drilling operations.
- Sweet oil/gas:
- Petroleum which contains little or no hydrogen
sulphate and as a result requires little processing.
- Syncline:
- A fold in layered rock in the form of a dip or
bowl.
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- Tar sands:
- Mixture of sand, water, and heavy hydrocarbons.
- Terminal:
- An onshore transit facility that receives and
stores crude oil and products from offshore production facilities via
pipeline and/or tankers.
- Transmission pipeline:
- A network of pipelines distributing natural gas
from an onshore station, via compressor stations, to storage centres or
distribution points.
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- Underbalanced drilling:
- Occurs when the operator of the site uses
specialized mud or gas while drilling to allow for formation fluids to
rise to the surface and thus prevent damage to the prospective formation.
- Unitization:
- Owners of adjoining properties pool reserves
together to form a single producing unit in which each has an interest.
- Upstream industry:
- Produces petroleum, also referred to as upstream
sector; namely, exploration and development companies, seismic ,and
drilling contractors, service rig operators, engineering firms, etc.
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- Viscosity:
- The resistance to flow or "stickiness" of a fluid.
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- Wellhead:
- The control equipment fitted to the top of the well
consisting of outlets, valves, blowout preventors, etc.
- Wet Barrel:
- A physical barrel of crude oil or refined product
as opposed to a "paper barrel."
- Wet Gas:
- Natural gas containing condensable hydrocarbons.
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- Wildcat:
- A well drilled in an unexplored area.
- Working capital:
- Current assets minus current liabilities, shows a
company's ability to meet its short-term obligations.
- Workovers:
- Major repairs or modifications which restore or
enhance production from a well.
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