Lexicon of Terms

Learn how to talk like an Oilman
417 Oil & Gas and related investment terms defined.
 
Surface rights — Surface ownership of a tract of land from which the mineral rights have been severed.

Skidding the rig — Moving a derrick from one location to another on skids and rollers.

Synthetic crude oil (syncrude) — A crude oil derived from processing carbonaceous material such as shale oil or unrefined oil in coal conversion processes.

Shoestring sands — Narrow strands of saturated formation that have retained the shape of the stream bed that formed them. In the United States, such a formation is located in Kansas.

Spacing unit — The size (amount of surface area) of a parcel of land on which only one producing well is permitted to be drilled to a specific reservoir.

Scout — An individual who observes and reports on competitor's leasing and drilling activities.

Service well — A well drilled in a known oil or natural gas field to inject liquids that enhance recovery or dispose of salt water.

Structure — Subsurface folds or fractures of strata that form a reservoir capable of holding oil or gas.

Selling Expenses — Expenses incurred in marketing interests in securities and commonly paid out of the investor's capital investment.

Securities — Securities are commonly thought of as stocks and bonds. As defined by the Securities Act of 1933, however, securities include any certificate of interest or participation in any profit sharing agreement, investment contract, or fractional undivided interest in oil, gas, or other mineral rights.

Source rock — Sedimentary rock, usually shale containing organic carbon in concentrations as high as 5-10% by weight.

Side track — When fishing operations have been unable to recover an object in the hole that prevents drilling ahead, the borehole can often be drilled around the obstacle in the original hole.

Securities Exchange Act of 1934 — Established the Securities and Exchange Commission which regulates the activities of securities markets. Sedimentary basin

Sandstone — Rock composed mainly of sand-sized particles or fragments of the mineral quartz.

Stipper oil well — An oil well capable of producing no more than 10 barrels of oil per day.

Solution gas — Natural gas that is dissolved in the crude oil in a reservoir.

Structural trap — A reservoir created by some cataclysmic geologic event that creates a barrier and prevents further migration. The most common structural traps are anticlines, in which at lease 80 percent of the world's oil and gas have been discovered.

Syncline — A downfold in stratified rock that looks like an upright bowl. Unfavorable to the accumulation of oil and gas.

Sweet crude — Crude oil with low sulfur content which is less corrosive, burns cleaner, and requires less processing to yield valuable products.

Set casing — To cement casing in the well hole, usually in preparation for producing a commercial well.

Show — An indication of oil or gas observed and recorded during the drilling of a well.

Shut-in Royalty — A special type of royalty negotiated in the leasing of a property.

Squeeze — The procedure of pumping a slurry of cement into a particular space in the borehole (often the annulus between the borehole and the casing), so that the cement will solidify to form a seal.

Sedimentary rock — Rock formed by the deposition of sediment, usually in a marine environment.

Syndication expenses — Expenditures incurred by a partnership in connection with issuing and marketing its interests to investors: legal fees of the issuer for securities and tax advice, accounting fees for audits and other representations included in the offering memorandum. Synfuels

Spot market — A short-term contract (typically 30 days) for the sale or purchase of a specified quantity of oil or gas at a specified price.

Section — A square tract of land having an area of one square mile (=640 acres). There are 36 sections in a township.

Supervisory fee — Analogous to a management fee in an oil and gas limited partnership, it is paid by the partnership to the general partner for direct supervision of mechanical operations at the well site.

Seismic exploration — A method of prospecting for oil or gas by sending shock waves into the earth. Different rocks transmit, reflect, or refract sound waves at different speeds, so when vibrations at the surface send sound waves into the earth in all directions, they reflect to the surface at a distance and angle from the sound source that indicates the depth of the interface. These reflections are recorded and analyzed to map underground formations.

Sample — Cuttings of a rock formation broken up by the drill bit and brought to the surface by the drilling mud. These are examined by geologists to identify the formation and type of rock being drilled.

Shut-in — To stop a producing oil and gas well from producing.

Sour Crude or Gas — Oil or natural gas containing sulfur compounds, notably hydrogen sulfide a poisonous gas.

Severance tax — Tax paid to the state government by producers of oil or gas in the state. Shale

Substructure — A platform upon which a derrick is erected.

Submersible drilling barge — A vessel capable of drilling in deep water. The hull is flooded to sink the barge beneath the water level, and a drilling platform is jacked up above the surface.

Subscription — The manner by which an investor participates in a limited partnership through investment.

Submersible pump — A bottom-hole pump for use in an oil well when a large volume of fluid is to be lifted.

Shut-in pressure -The pressure at the wellhead when valves are closed.

Salt dome — A subsurface mound or dome of salt.

Schlumberger (pronounced "slumber-jay") — The founder of electrical well logging, now the name for any electrical well log.

Securities Act of 1933 — Establishes requirements for the disclosure of information for any interstate offering and sale of securities.

Shale shaker — A vibrating screen or sieve that strains cuttings out of the mud before the mud is pumped back down into the borehole.

Shoot a well — A technique that stimulates production of a tight formation by setting off charges downhole that crack open the formation. The early wells were shot with nitroglycerin; then dynamite was used. The nitro man has been replaced today by acidizers and frac trucks.

Spud — To spud a well means to start the initial drilling operations.

Saturation — 1. The extent to which the pore space in a formation contains hydrocarbons or connate water. 2. The extent to which gas is dissolved in the liquid hydrocarbons in a formation.

Separator — A pressure vessel used to separate well fluids into gases and liquids.

Seismograph — A device that records natural or manmade vibrations from the earth. Geologists read what it has recorded to evaluate the oil potential of underground formations.

Steel reef — Refers to the artificial reefs formed by the substructures of offshore drilling and production platforms which are inhabited by a rich variety of marine life. Step-out well

Sample log — A record of rock cuttings made as a well is being drilled. A record is then kept that shows the characteristics of the various strata drilled through.

Swab — A hollow rubber cylinder with a flap (check valve) on the bottom surface. It is lowered below the fluid level in the well. This opens the check valve allowing fluid into the cylinder. The check valve flap closes as the swab is pulled back up, lifting oil to the surface.

Sharing arrangement — An arrangement whereby a party contributes to the acquisition, or exploration and development, of an oil and gas property, and receives as compensation, a fractional interest in that property.

Synthetic gas — Gas produced from solid hydrocarbons such as coal, oil shale, or tar sands.

Shut-down well/shut-in well — A well is shut down when initial drilling ceases for one reason or another. A well is shut in when the wellhead valves are closed, shutting off production, often while waiting for transportation or for the market to improve.

Stratigraphic trap — A porous section of rock surrounded by nonporous layers, holding oil or gas. They are usually very difficult to locate, although oilmen believe that most of the oil yet to be discovered will be found in these traps.

Salt-bed storage — Storage of petroleum products in underground formations of salt whose cavities have been mined or leached out with superheated water.

Severance — The owner of all rights to a tract of land can sever the rights to his land (vertically or horizontally). In horizontal severance, for example, if he chooses to sell all or part of the mineral rights, two distinct estates are created: the surface rights to the tract of land and the mineral rights to the same tract. The two estates may change hands independently of each other.

Stocktank barrel — A barrel of oil at the earth's surface.

Secondary recovery — The introduction of water or gas into a well to supplement the natural reservoir drive and force additional oil to the producing wells.

Stratigraphic test — A hole drilled to gather information about rock strata in an area.

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