Term
| Integrated oil & gas company |
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Definition
| One involved in E&P activities as well as at least one downstream activity |
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Term
| Independent oil & gas company |
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Definition
| One involved primarily in only E&P activities |
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Term
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Definition
| Exploration, acquisition, drilling, developing and producing oil & gas |
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Term
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Definition
| Refining, processing, marketing and distribution of oil & gas |
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Term
| Characterizations of upstream E&P activities |
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Definition
- A high level of risk
- A long time span before ROI is received
- A high level of regulation
- Complex tax rules
- Unique cost-sharing agreements
- A lack of correlation between the magnitude of expenditures and the value of any resulting reserves
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Term
| Mineral Interest / Economic Interest |
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Definition
- The right to explore, develop and produce any minerals that might exist beneath the property.
- The right to share in proceeds from the sale of any minerals produced.
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Term
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Definition
| Owner that has the rights to use the surface in any legal way that the owner deems appropriate |
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Term
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Definition
| The ownership, conveyed by deed, of any mineral beneath the surface |
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Term
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Definition
| A type of mineral interet that is created by leasing. It is retained by the owner of the mineral rights when the owners enters into a lease agreement with another party. |
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Term
| Working interest / Operating interest |
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Definition
| The interest that is created via leasing and is responsible for the exploration, development and operation of a property. |
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Term
| Overriding royalty interest |
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Definition
| A nonworking interest created from the working interest. The ORI's share of revenue is a stated percentage of the share of revenue belonging to the working interest from which it was created. |
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Term
| Production payment interest (PPI) |
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Definition
| A nonworking interest created out of a working interest that is limited to a specific amount of oil or gase, money or time after which it reverts back to the interest from which it was created and ceases to exist. |
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Term
| Net profits interest (NPI) |
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Definition
| A nonworking interest created on onshore property typically from the WI. Similar to an ORI except that the amount to be received is a specified percentage of net profit from the property versus a percentage of the gross revenues of the property. |
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Term
| Pooled or unitized working interest |
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Definition
| A type of interest created when the WI as well as the nonworking interests in two or more properties are combined. |
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Term
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Definition
| Initial mount paid to the mineral rights owner in return for the rights to explore, drill and produce. |
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Term
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Definition
| Specified fraction of the oil and gas produced free and clear of any costs to which the RI owner is entitled. |
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Term
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Definition
| Initial term of the lease. The maximum time that the lessee has to begin drilling or commence production from the property. |
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Term
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Definition
| Yearly payment made during the primary term in the absence of drilling operations in order to retain the lease. |
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Term
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Definition
| If the well is capable of producing oil or gas in paying quantities but is shut-in (not producing), the lessee may hold the lease by making shut-in payments. |
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Term
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Definition
| The rights of each party may be assigned in whole or in part without approval of the other party. |
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Term
| Rights to free use of resource for lease operations |
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Definition
| The operator usually has the right to use, without cost, any oil or gas produced on the lease to carry out operations on that lease. |
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Term
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Definition
| Payment made to obtain a preleasing agreement that gives the oil company a specified period of time to obtain a lease from the entity receiving the payment. |
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Term
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Definition
| If a producing well is drilled on Lease B close to the property line of Lease A, within a distance specified in the lease contract, the offset clause requires the lessee of Lease A to drill an offset well on Lease A, within a specified period of time, in order to prevent the well on Lease B from draining the reservoir. |
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Term
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Definition
| A minimum royalty clause provides for the payment of a stipulated amount to the lessor regardless of production |
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Term
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Definition
[image] (W&G 23-24)
Also:
Exploratory wells, Development wells, Service wells, stratigraphic test wells |
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Term
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Definition
- Acquisition costs
- Exploration costs
- Development costs
- Production/operating costs
(W&G 37; J&J 59) |
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Term
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Definition
| Costs incurred in acquiring property. (W&G 37) |
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Term
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Definition
| Costs incurred in exploring property. (W&G 37) |
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Term
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Definition
| Costs incurred in preparing proved reserves for production. (W&G 37) |
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Term
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Definition
| Costs incurred in lifting the oil and gas to the surface and in gathering, treating and storing the oil and gas. (W&G 37) |
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Term
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Definition
| A well drilled to find and producer oil or gas in an unproven area, to find a new reservoir in a field previously found to be productive of oil or gas in another reservoir, or to extend a known reservoir. (W&G 39) |
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Term
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Definition
| A well drilled within the proved area of an oil or gas reservoir to the depth of an horizon known to be productive (W&G 39) |
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Term
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Definition
| A well drilled or completed for the purpose of supporting production in an existing field. (W&G 39) |
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Term
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Definition
| A drilling effort, geologically directed, to obtain information pertaining to a specific geologic condition. (W&G 39) |
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Term
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Definition
| The first well drilled in a location where there has been no previous drilling or production. (W&G 43) |
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Term
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Definition
| A well drilled along what the engineers believe to be the outer perimeter of the reservoir. (W&G 43) |
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Term
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Definition
| A well drilled to test whether a known, proved reservoir actually extends beyond what engineers had previously believed to be the outer reservoir perimeter. (W&G Pg43) |
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Term
| Differences between the Successful Efforts accounting method and the Full Cost accounting Method |
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Definition
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Term
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Definition
- Proved reserves
- Unproven reserves
- Proved developed reserves
- Proved undeveloped reserves
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Term
| List the costs to be expensed under the Successful Efforts method |
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Definition
| Geological and Geophysical costs, Exploratory dry hole costs, and operating/production costs. (J&J 63) |
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Term
| List the costs to be expensed under the Full Cost method |
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Definition
| Operating/production costs. (J&J 63) |
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Term
| List the costs to be capitalized under the Successful Efforts method |
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Definition
| Lease acquisition costs, successful exploratory well costs, development dry hole costs, successful developer well costs. (J&J 63) |
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Term
| List the costs to be capitalized under the Full Cost method |
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Definition
| Geological and Geophysical costs, exploratory dry hole costs, lease acquisition costs, successful exploratory well costs, development dry hole costs, and successful development well costs. (J&J 63) |
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