Lexicon of Terms

Learn how to talk like an Oilman
417 Oil & Gas and related investment terms defined.
 
Plug back — To block off the lower section of the borehole by setting a plug, in order to perform operations in the upper part of the hole.

Pinch out — The disappearance of a porous, permeable formation between two layers of impervious rock over a horizontal distance.

Proved reserves — Estimates of the amount of oil or natural gas believed to be recoverable from known reservoirs under existing economic and operating conditions.

Petroleum geologist — A geologist who specializes in the exploration for, and production of, petroleum.

Proved undeveloped reserves — Estimates of what is recoverable through new wells on undrilled acreage, deepening existing wells, or secondary recovery methods.

Permeability — A measure of the ease with which a fluid such as water or oil moves through a rock when the pores are connected. Geologists express permeability in a unit named the darcy, but oilmen use the millidarcy because most of the rocks they come in contact with are not very permeable.

Petrochemicals — Chemicals derived from crude oil or natural gas, including ammonia, carbon black, and other organic chemicals.

Public Offering — A securities (investment) offering intended for sale to the general public. It must be register with 1) the Securities and Exchange Commission of the Federal government and 2) the securities-regulating agencies of the various states in which it will be offered.

Petroleum — Strictly speaking, crude oil. Also used to refer to all hydrocarbons, including oil, natural gas, natural gas liquids, and related products.

Pipeline gas — Gas under enough pressure to enter the high-pressure gas lines of a purchaser; gas in which enough liquid hydrocarbons have been removed so that such liquids will not condense in the transmission lines.

Proved developed reserves — Estimates of what is recoverable from existing wells with existing facilities from open, producing payzones.

Pooling — A term frequently used interchangeably with "Unitization" but more properly used to denominate the bringing together of small tracts sufficient for the granting of a well permit under applicable spacing rules.

Porosity — A measure of the number and size of the spaces between each particle in a rock. Porosity affects the amount of liquid and gases, such as natural gas and crude oil, that a given reservoir can contain.

Producing platform — An offshore structure with a platform raised above the water to support a number of producing wells.

Pump — A device that is installed inside or on a production string (tubing) that lifts liquids to the surface.

Plugged & Abandoned (P&A) — This expression refers to setting cement plugs in an unsuccessful well (a dry hole) or a depleted well.

Probable reserves — Areas which are unproven but presumed capable of production because of geological inference, for instance, proximity to proven reserves in the same reservoir.

Producing horizon — Where the well is actually produced, since it may be drilled to a greater depth.

Production test — A test made to determine the daily rate of oil, gas, and water production from a potential pay zone.

Production — A term commonly used to describe taking natural resources out of the ground.

Private Placement Offering — A securities (investment) offering not intended for the general public. By meeting certain criteria, such an offering may qualify for exemptions from registration with the Securities and Exchange Commission of the Federal government.

Primary recovery — Production in which oil moves from the reservoir, into the wellbore, under naturally occurring reservoir pressure.

Pool — 1) (noun) An underground reservoir containing or appearing to contain a common accumulation of oil and natural gas. A zone of a structure which is completely separated from any other zone in the same structure is a pool. 2) (verb) To combine two or more tracts of land into one unit for drilling purposes. This may be accomplished voluntarily, or through compulsion.

Payout — The amount of time it takes to recover the capital investment made on a well or drilling program.

Public lands — Any land or land interest owned by the federal government within the 50 states, not including offshore federal lands or lands held in trust for Native American groups.

Pumping well — A well that does not flow naturally and requires a pump to bring product to the surface.

Perforating gun — An instrument lowered at the end of a wireline into a cased well. It contains explosive charges that can be electronically detonated from the surface.

Primary term — The basic period of time during which a lease is in effect.

Pay zones — The term to describe the reservoir that is producing oil and gas within a given wellbore. Pay zones (or oil reservoirs) can vary in thickness from one foot to several hundred feet.

Plugging a well — Filling the borehole of an abandoned well with mud and cement to prevent the flow of water or oil from one strata to another or to the surface.

Proved behind-pipe reserves — Estimates of the amount of crude oil or natural gas recoverable by recompleting existing wells.

Present net value — The present value of the dollars (income, or stream of income) to be received at some specified time in the future, discounted back to the present at a specified interest rate.

Prospect — A lease or group of leases on which an operator intends to drill.

Packer — A flexible rubber sleeve that is part of a special joint of pipe.

Possible reserves — Areas in which production of crude oil is presumed possible owing to geological inference of a strongly speculative nature.

Petroleum engineer — A term including three areas of specialization: 1) Drilling engineers specialize in the drilling, workover, and completion operations, 2) Production engineers specialize in studying a well's characteristics and using various chemical and mechanical procedures to maximize the recovery from the well, 3) Reservoir engineers design and execute the planned development of a reservoir. Many U.S. universities offer BS, MS, and Ph.D. degrees in petroleum engineering.

Payoff — The time when a well's production begins to bring in revenues.

Pipeline — A tube or system of tubes used for the transportation of oil or gas. Types of oil pipelines include: lead lines, form pumping well to a storage tank; flow lines, from flowing well to a storage tank; lease lines, extending from the wells to lease tanks; gathering lines, extending from lease tanks to a central accumulation point; feeder lines, extending from leases to trunk lines; and trunk lines, extending from a producing area to refineries or terminals.

Perforation — A method of making holes through the casing opposite the producing formation to allow the oil or gas to flow into the well. See the Gun perforation.

Proppants — Materials used in hydraulic fracturing for holding open the cracks made in the formation by the fracturing process. Proppants may consist of sand grains, beads, or other small pellets suspended in fracturing fluid.

Pump off — To pump a well so rapidly that the oil level falls below the pump's standing valve, rendering the well temporarily dry.

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