Lexicon of Terms

Learn how to talk like an Oilman
417 Oil & Gas and related investment terms defined.
Flange up — To complete the drilling of a well.

Future prices — Refers to the New York Mercantile Exchange (NYMEX) which introduced futures contracts for crude oil in 1985 and natural gas in 1990.

Fossil fuels — Fuels that originate from the remains of living things, such as coal, oil, natural gas, and peat.

Fishing — Recovering the tools or pipe that have been accidentally lost down the borehole by using specially designed tools that screw into or grab the missing equipment.

Flowing well — A well that produces through natural reservoir pressure and does not require pumping.

Fuel oil — See Heating oil.

Flooding — One of the methods of enhanced oil recovery. Water flooding or gas flooding might be considered secondary recovery methods.

Flow Through concept — In ventures structured as partnerships (or S corporations), certain items of tax significance (profit, loss, etc.) are passed on to the partners (or S corporation shareholders) in the venture. In a venture structured as a "C" corporation, the responsible tax-paying party would be the corporation itself (not its shareholders).

Front-end costs — Costs that are paid out of initial investment in a venture, first, before the venture activities actually begin.

Fault trap — A geological formation in which oil or gas in a porous section of rock is sealed off by a displaced, nonporous layer.

Farmer's oil — An expression that refers to the landowner's share of oil from a well drilled on his property. This royalty is traditionally one-eighth of the produced oil free of any expense to the landowner.

Fee lands — Privately owned, nonpublic lands.

Fishing tools — Special instruments equipped with the means for recovering objects lost while drilling the well.

Feet of pay — The thickness of the pay zone penetrated in a well.

Fault — A break in the continuity of stratified rocks or even basement rocks. Faults are significant to oilmen because they can form traps for oil when the rock fractures, they can break oil reservoirs into noncommunicating sections, they help produce oil accumulations, and they form traps on their own.

Filter cake — A plastic-like coating that builds up inside the borehole. Such buildup can cause serious drilling problems, including sticking of the drillpipe.

Five-spot waterflood program — A secondary-recovery operation in which four injection wells are drilled in a square pattern with the production well in the center. Water from the injection wells moves through the formation, forcing oil toward the production well.

Flaring — The burning of gas vented through a pipe or stack at a refinery, or a method of disposing of gas while a well is being drilled. Flaring is regulated by state agencies. Venting (letting gas escape unburned) is generally prohibited.

Farm in — When one company drills wells or performs other activity on another company's lease in order to earn an interest in or acquire that lease.

Formation — A geological term that describes a succession of strata similar enough to form a distinctive geological unit useful for mapping or description.

Farm out agreement — An arrangement in which the responsibility of exploration and development is shifted (by assignment) from the working interest owner to another party.

Field — A geographical area under which one or more oil or gas reservoirs lie, all of them related to the same geological structure.

Fracturing — A well stimulation technique in which fluids are pumped into a formation under extremely high pressure to create or enlarge fractures for oil and gas to flow through. Proppants such as sand are injected with the liquid to hold the fractures open.


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