Lexicon of Terms

Learn how to talk like an Oilman
417 Oil & Gas and related investment terms defined.
 
Directional drilling — Drilling at an angle, instead of on the perpendicular, by using a whipstock to bend the pipe until it is going in the desired direction. Directional drilling is used to develop offshore leases, where it is very costly and sometimes impossible to prepare separate sites for every well; to reach oil beneath a building or some other location which cannot be drilled directly; or to control damage or as a last resort when a well has cratered. It is much more expensive than conventional drilling procedures.

Distillate — Liquid hydrocarbons, usually colorless and of high API gravity, recovered from wet gas by a separator that condenses the liquid out of the gas. The present term is natural gas.

Development — well A well drilled in an already discovered oil or gas field.

Downstream — All operations taking place after crude oil is produced, such as transportation, refining, and marketing.

Depletion, restoration of — In federal income taxation, the adding back to income of depletion allowance taken on minerals not produced.

Dual completion — Completing a well that draws from two or more separate producing formations at different depths. This is done by inserting multiple strings of tubing into the well casing and inserting packers to seal off all formations except the one to be produced by a particular string.

Dry natural gas — Natural gas containing few or no natural gas liquids (liquid petroleum mixed with gas).

Delay rental — Cash payments to the mineral rights owner (lessor) by the working interest owner (lessee), for the privilege of postponing the commencement of drilling operations on the leased property.

Deductions — Tax items which may be subtracted from gross income to arrive at taxable income in Federal income tax computations.

Downhole — Refers to equipment or operations that take place down inside a borehole.

Drill string — Also called drill pipe or drill stem. Thirty-foot lengths of steel tubing screwed together to form a pipe connecting the drill bit to the drilling rig. The sting is rotated to drill the hole and also serves as a conduit for drilling mud.

Drillstem test — A test through the drill pipe prior to completion to determine if oil or gas is present in a formation.

Drilling mud — A mixture of clay, water, chemical additives, and weighting materials that flushes rock cuttings from a well, lubricates and cools the drill bit, maintains the required pressure at the bottom of the well, prevents the wall of the borehole from crumbing or collapsing, and prevents other fluids from entering the well bore.

Due Diligence — In an offering of securities, certain parties who are responsible for the accuracy of the offering document, have an obligation to perform a "due diligence" examination of the issuer; issuer's counsel, underwriter of the security, brokerage firm handling the sale of the security. Due diligence refers to the degree of prudence that might properly be expected from a reasonable man, on the basis of the significant facts which relate to a specific case.

Domestic production — Oil and gas produced in the United States as opposed to imported product.

Drilling break — A sudden increase in the rate of drilling.

Drilling rig — The surface equipment used to drill for oil or gas, consisting chiefly of a derrick, a winch for lifting and lowering drill pipe, a rotary table to turn the drill pipe, and engines to drive the winch and rotary table.

Drilling platform — An offshore structure with legs anchored to the sea bottom that supports the drilling of up to 35 wells from one location.

Deliverability — A well's tested ability to produce.

Deed — A written document by which the title to a property is transferred from one party (the grantor) to another (the grantee).

Drilling — The act of boring a hole through which oil or gas may be produced if encountered in commercial quantities.

Differential-pressure sticking — A condition in which a section of drillpipe becomes stuck in deposits on the wall of the borehole.

Distillate fuel oil — A term subject to a variety of definitions. Sometimes the definition is based on the method of production, but other definitions are based on boiling range, viscosity, or use.

Deepwater port — An offshore marine terminal designed to accommodate large vessels such as VLCCs and tankers, connected to the shore by submerged pipelines.

Dry hole — A well that either produces no oil or gas or yields too little to make it economic to produce.

Distributor — A wholesaler of gasoline and other petroleum products; also know as a jobber. Distributors of natural gas are almost always regulated utility companies.

Drilling fund — The generic term employed to describe a variety of organizations established to attract venture capital to oil and gas exploration and development. Typically the fund is established as a joint venture or limited partnership.

Diesel oil — A petroleum fraction composed primarily of aliphatic (linear of unbranched) hydrocarbons. Diesel oil is slightly heavier than kerosene.

Division Order — A contract for the sale of oil or gas, by the holder of a revenue interest in a well or property, to the purchaser (often a pipeline transmission company).

Drill bit — The part of the drilling tool that cuts through rock strata.

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