Lexicon of Terms

Learn how to talk like an Oilman
417 Oil & Gas and related investment terms defined.
LNG (liquefied natural gas) — Natural gas that has been converted to a liquid through cooling to -260 degrees Fahrenheit at atmospheric pressure.

Lease offering (lease sale) — An area of land offered for lease - usually by the U.S. Department of Interior - for the exploration for and production of specific natural resources such as oil and gas. Such a lease conveys no title or occupancy rights apart from the right to search for and produce petroleum or other natural resources subject to the conditions stated in the lease.

Limited partner — In a limited partnership, a partner whose liability is limited to the amount of his investment in the partnership (plus any assessments and his share of undistributed partnership earnings).

Lease or Sublease — Any transaction in which the owner of operating rights in a property assigns all or a portion of these rights to any other party.

Lifting costs — The costs of producing oil from a well or lease; the operating expenses.

Lost circulation — A serious condition that occurs when drilling mud pumped into the well does not return to the surface, but goes into the porous formation, crevices, or caverns instead.

Landowner royalty — The share of the gross production of the oil and gas on a property without deducting any of the cost of producing the oil or gas. The usual landowner's royalty is one-eighth of gross production.

Landman — A self-employed individual or company employee who secures oil and gas leases, checks legal titles, and attempts to cure title defects so that drilling can begin.

Logs — Records made from data-gathering devices lowered into the wellbore. The devices transmit signals to the surface which are then recorded on film and used to make the record describing the formation's porosity, fluid saturation, and lithology. The filing of a log is required by the federal government if the drill site is on federal land.

Limestone — Sedimentary rock largely consisting of calcite. On a world-wide scale, limestone reservoirs probably contain more oil and gas reserves than all other types of reservoir rock combined.

LPG (liquefied petroleum gases) — Hydrocarbon fractions lighter than gasoline, such as ethane, propane and butane, kept in a liquid state through compression and/or refrigeration, commonly referred to as "bottled gas.

Law of capture — A legal concept on which oil and gas law in some states is based: since petroleum is liquid, and hence mobile, it is not owned until it is produced.

Limited partnership — A partnership in which the general partner manages the partnership's activities and is solely liable for them. The limited partners are liable only to the extent of their contributions.

Lease (Oil and Gas) — A contract by which the owner of the mineral rights to a property conveys to another party, the exclusive right to explore for and develop minerals on the property, during a specified period of time.

Lignite — A solid fuel of a grade higher than peat but lower than bituminous coal.

Lease acquisition costs — Bonus payments.

Lease broker — An individual engaged in obtaining leases for speculation or resale.

Lease hound — Someone who goes out and aggressively acquires oil and gas leases from the landowner, and then turns around and sells or trades them to an oil company planning to drill a well in the area.

Lead lines — The lines through which production from individual wells is run to tanks.


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