Lexicon of Terms

Learn how to talk like an Oilman
417 Oil & Gas and related investment terms defined.
 
Oil in place — The crude oil estimated to exist in a field or a reservoir. Oil in the formation not yet produced.

OPEC (Organization of Petroleum Exporting Countries) — An international oil cartel originally formed in 1960 and including in 1983: Saudi Arabia, Kuwait, Iran, Iraq, Venezuela, Quatar, Libya, Indonesia, United Arab Emirates, Algeria, Nigeria, Ecuador, and Gabon.

Organization costs — Direct costs incurred in the creation of a new business organization such as an oil and gas limited partnership.

Oil pool — An underground reservoir containing oil. An oil field may contain one or more pools, each of which has its own pressure system.

Overthrust belt — A geological system of faults and basins in which geologic forces have thrust layers of older rock above strata of newer rock that might contain oil or natural gas. The Eastern Overthrust Belt runs from eastern Canada through Appalachia into Alabama. The Western Overthrust Belt runs from Alaska through western Canada and the Rocky Mountains into Central America.

Octane — An hydrocarbon of the paraffin series. It is liquid at ordinary atmospheric conditions, although small amounts may be present in the gas associated with petroleum.

Overriding Royalty (ORRI) — A revenue interest in oil and gas, created out of a working interest. Like the lessor's royalty, it entitles the owner to a share of the proceeds from gross production, free of any operating or production costs.

Outcrop — A portion of bedrock or other stratum protruding through the soil level, indicating a fault or some other oil-bearing formation.

On the pump — A phrase used in reference to a well that no longer flows from natural reservoir energy by is produced by means of a pump.

Oilfield services — Described as service companies that do work in and for the oilfield. These services may include: cementing, perforating, trucking, logging, etc.

Operator — The individual or company responsible for the drilling, completion and production operations of a well, and the physical maintenance of the leased property.

Oil shale — A fine-grained, sedimentary rock that contains kerogen, a partially formed oil. Kerogen can be extracted by heating the shale, but at a very high cost.

OCS (outer continental shelf) — A gently sloping underwater plain that extends seaward from the coast.

Oil run — 1. The production of oil during a specified period of time. 2. A tank of oil gauged, tested, and put on a pipeline.

Offshore platform — A fixed structure from which wells are drilled offshore for the production of oil and natural gas.

Octane number — A performance rating used to classify motor fuels by grading the relative antiknock properties of various gasolines. A high-octane fuel has better antiknock properties than one with a low number.

Oil column — The vertical height (thickness) of an oil accumulation above the oil-water contact.

Oil gravity — The density of liquid hydrocarbons, generally measured in degrees.

Offering memorandum — A legal document provided to potential investors in a venture describing the terms under which the investment is being offered.

Offset well — A well drilled near the discovery well. Also a well drilled to prevent oil and gas from draining from one tract of land to another where a well is being drilled or is already producing.

Oil rig — A drilling rig that drills for oil and gas.

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