Lexicon of Terms

Learn how to talk like an Oilman
417 Oil & Gas and related investment terms defined.
 
TCF — Trillion cubic feet.

Transfer rule — When an interest in an oil and gas property already proven to be capable of commercial production is transferred, the transferee taxpayer is generally not entitled to percentage depletion, although he may still be entitled to cost depletion, in computing his depletion allowance deduction from gross income.

Take-or-pay contract — A (long-term) contract between a gas producer and a gas purchaser, such as a pipeline transmission company.

Time value of money — The concept that a dollar in hand today is worth more than a dollar that will be received in some future year.

Tender — 1. A permit issued by a regulatory body for the transportation of oil or gas. 2. A barge or small ship that serves as a supply ship and/or storage facility for an offshore rig.

Tar sands — Rocks (other than coal or oil shale) that contain highly viscous hydrocarbons that are unrecoverable by primary production methods.

Trip — Making a "trip" is the procedure of pulling the entire string of drill pipe out of the borehole and then running the entire length of drill pipe back in the hole.

Tight sand — A formation with low permeability. Gas produced from a formation so designated by the Federal Energy Regulatory Commission qualifies for a higher market price.

Tool pusher — The supervisor of drilling rig operations.

Tight formation — A sedimentary layer of rock cemented together in a manner that greatly hinders the flow of any gas through the rock.

Tubing — Small diameter pipe, threaded at both ends, that is lowered into a completed well. Oil and gas are produced through a string of tubing.

Tank bottoms — A mixture of oil, water, and other foreign matter that collects in the bottoms of stock tanks and large crude storage tanks and must be cleaned or pumped out on a regular basis.

Tertiary recovery — The recovery of oil that involves complex and very expensive methods such as the injection of steam, chemicals, gases, or heat, as compared to primary recovery, which involves depleting a naturally flowing reservoir, or secondary recovery, which usually involves repressuring or waterflooding. Therm

Tar sand — A sandstone in which the spaces between grains are filled with a highly viscous tar.

Total depth (TD) — The maximum depth of a borehole.

Tight hole — A well about which the operator keeps all information secret.

Top lease — A (conditional) type of lease that may be granted by the mineral-rights owner of a property while an pre-existing recorded lease of that property is nearing expiration, but nonetheless is still in effect. The top lease would become effective only if and when the existing lease expires (or is terminated).

Third for a quarter — Sometimes also known as a "quarter for a third". A widely used arrangement for promoting an oil deal to another party.

Tectonic map — A geologic map showing the structure of the earth's crust.

Tax preference items — Certain items of income, or special deductions from gross income which are given favored treatment under Federal tax law.

Trap — A natural configuration of layers of rock where non-porous or impermeable rocks acts as a barrier, blocking the natural upward flow of hydrocarbons.

Tanker — An ocean going ship which hauls crude oil.

Township — A square tract of land six miles on a side, it consists of 36 sections of one square mile each.

Turnkey — A drilling contract that calls for a drilling contractor to drill a well, for a fixed price, to a specified depth. The purpose of drilling a well by turnkey contract may be related to the timing of Federal income tax deductions. For income tax purposes, expenses are deductible from gross income as they are incurred. When a turnkey contract is entered into toward the end of the current tax year, the drilling costs may be pre-paid at that time. The idea is to give a working interest owner (or investor) in the well, the opportunity to deduct the intangible drilling costs from his gross income in the current tax year.

Title — The combination of factors that, together, constitute legal ownership of a property.

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