Glossary

Term Definition Category
1031 Exchange If a mineral owner sells their mineral rights, they can defer paying capital gains tax if another "like-kind property" is purchased with the profits. 1031 Exchanges can help avoid paying a very large percentage tax sum in a year where a large property sale is made. Finance
Abandoned Well A well that is no longer in use or maintained by the operator. Typically a series of steps must be done including plugging the well. Oil and Gas
Acre-Foot A unit of volume obtained from one acre of surface area that's one foot deep. This is equivalent to 7,758 barrels of oil or 43,560 cubic feet of gas. Combined with reservoir thickness and the approximate percentage of recovery, this can be a helpful measurement for understanding the hydrocarbon production potential of an asset. Oil and Gas
Ad Valorem Tax For oil and gas minerals, ad valorem taxes are applied at the county level where the counties estimate the market value of production over the calendar year. This is usually done by creating a forecast type curve for the upcoming year based on regional production data and discounting this production for the time value of money (over the year) and any other applicable operating expenses. Finance
Aggregate Pay Laws Laws that allow operators to withhold royalty payments until certain dollar threshholds are met. These vary by state, usually ranging from $25 to $100. This can help explain situations where royalty interest holders may not receive payments every month. Finance
Aliquot part The standard subdivisions of a section, such as a half section, quarter section, or quarter-quarter section. Land
Assignment A legal instrument that transfers leases and royalty interests Land
Bank Draft An instrument that guarantees payment to a party as long as certain conditions are met in a specified amount of time Finance
Barrel A barrel (bbl) is an oil and gas industry measurement for oil and water. This represents a volume of 350 cm^2 or 42 US gallons. Oil and Gas
Base line A parallel of latitude, or approximately a parallel of latitude, running through an arbitrary point chosen as the starting point for all sectionalized land within a given area. Land
Basin In geologic terms a basin refers to a large, low lying area, often below sea level. This creates an environment for organic rich shales and for other sedimentary rock such as sands and carbonates to fill the basin. These features help comprise a petroleum system. Many basins also duplicate as plays, with focused oil and gas activity in the basin. Some basins, such as the Anadarko Basin, contain many plays such as the STACK, Granite Wash, and the Mississippian Play. Geology
BCF The abbreviation for a billion cubic feet of gas Oil and Gas
BOE This value converts natural gas production to an oil equivalent, representing the total hydrocarbon production of a well. The calculation is usually BBL Oil + (MCF Gas/6). An MCF divided by 6 is approximately the energy equivalent of 1 BBL of oil. Oil and Gas
BOE20 This value is intended to convert natural gas production to an economic equivalent of oil. The calculation is usually (Total MCF Gas/20) + Total BBL Oil. Although prices can be volatile, the thought for this variable is that a BBL of oil sells for around 20 times the amount of an MCF of natural gas. Oil and Gas
BOPD The abbreviation for barrels of oil per day Oil and Gas
Bottom Hole Pressure (BHP) Bottom Hole Pressure (BHP) is a measurement of the pressure of the well at the bottom of the wellbore. This is usually measured in PSI (pounds per square inch) Oil and Gas
Brine Water with a high concentration of salt Oil and Gas
BS&W An abbreviation for Basic Sediment and Water. This measures water, sediment, and emulsion as a percentage of the production stream. Oil and Gas
BTU (British Thermal Unit) A traditional unit of heat defined as the the amount of heat required to raise the temperature of one pound of water by one degree at sea level. Natural Gas has a BTU content of approximately 1,037 BTU per cubic foot. BTU content can be important to understand. Gas with a higher BTU content can generally command a higher sales price as it would be capable of converting to more energy. Oil and Gas
Cadastral Having to do with the boundaries of land parcels. Land
Casing Casing is large diameter pipe cemented into the well. This is done for a variety of reasons including to prevent wellbore collapse and to protect fresh water formations Oil and Gas
Check Stubs A settlement statement provided by the operator or first purchaser that details the revenue and expense components used to calculate the payment to parties with interest in a well or asset. These are usually sent monthly. Check stubs tend to follow the same pattern but the layout and terms can differ between operators. Many operators detail out the components of their check stubs online. Finance
Clear Title Title with no questions or issues regarding ownership through time Land
Commercial Well An oil and gas well that has produced or is producing enough oil and gas to be economically viable Oil and Gas
Commodity Price Crude oil and natural gas are both commodities that are priced on a commodity exchange Finance
Completion Well completion involves preparing a drilled well for production. For modern, unconventional wells this usually involves intense stimulation with base fluid, proppant, and other chemicals. Oil and Gas
Compression For transport purposes, it's common for natural gas to be compressed to create higher pressures for further movement downstream to market Oil and Gas
Condensate A low density hydrocarbon liquid phase that is usually associated with gas. Often, as pressure and temperature drop during extraction, some gas can change into a light condensate liquid. Oil and Gas
Contiguous Tract A tract of land with a continous, unbroken perimeter. These will often be preferred for leasing versus fragmented tracts. Land
Conventional Development Conventional Development usually refers to drilling wells vertically or directionally versus drilling a horizontal leg. Oil and Gas
Crude Oil Unrefined petroleum or liquid production. This is the raw, extracted oil which is different than hydcrocarbons that have been refined into to products such as gasoline or heating oil. Oil and Gas
Curative Title Curative is the process used to clarify errors in the chain of title. Land
Decline The rate of decline of decline of an oil and gas well through time. This is usally represented as a percentage. Oil and Gas
Decline Curve The decline curve is a visual representation of the production profile for an oil and gas well through time. This curve is also often used to estimate future production based on the profile shape and other parameters. Oil and Gas
Deed A signed legal instrument that confirms ownership of a property. This is commonly associated with transferring property from one owner to another. Land
Defects in Title Issues with title that appear to be problematic Land
Dehydration of Natural Gas The process of removing water from natural gas so that it can be transported downstream Oil and Gas
Delay Rental Consideration paid to the lessor by the lessee that extends the terms of the primary lease. This is common in the absence of drilling or production required to hold the primary lease. Land
Depletion Allowance This relates to oil and gas when minerals are purchased as an investment. Just like depreciating a work truck, the owner is allowed to deduct the capital investment costs. This is done by using either a percentage of estimated depletion or from a cost associated with the depletion. Of course, the sum of these deductions can not exceed the original capital investment. Finance
Division of Interest Another common term for a Division Order. An instrument defining the proportional ownership for produced oil and gas. Usually, a well or a lease will have multiple owners. Land
Division Order An instrument defining the proportional ownership for produced oil and gas. Usually, a well or a lease will have multiple owners. Land
Downstream The oil and gas industry can be divided into three segments. Upstream, Midstream, and Downstream. The Downstream sector is the process of refining the crude oil and natural gas into products such as gasonline, heating oil, natural gas, and lubricants. This sector also includes the marketing and distribution of these products to consumers. Some companies, such as Chevron, are involved in upstream, midstream, and downstream activities. Oil and Gas
Drilling Spacing Units Drilling Spacing Units (DSU's) represent areas represented on a spacing order or other unit designation within which operators drill wellbores to extract minerals. Land
Dry Hole A well that fails to produce oil and gas in economic quantities Oil and Gas
DUC DUC is a common industry term to reperesent a wellbore that has been drilled but has yet to be completed. This can happen for a variety of reasons such as waiting on takeaway capacity to market or because the commodity price dropped suddenly. For DUC's it's important to understand that an operator has already invested capital to drill the well making it more likely that it will be completed at some time in the future. Oil and Gas
Easement A right to cross or use someone elses property for a specific purpose. A common occurence of this for oil and gas activity is pipeline development. Land
Effective Date The date that a lease begins. This is usually at the top of the lease and can be different than the signed date. Land
Enhanced Oil Recovery (EOR) Enhanced Oil Recovery usually involves gas, steam, or other chemicals to help recover more hydrocarbons. This differs from secondary recovery in that the properties of the hydrocarbons are altered in the process. Oil and Gas
Escheated For mineral ownership, this is a process of returning property to the state when there is no claimant to the property. Legal
Executive Rights The right to negotiate and execute oil and gas leases and the terms involved in a lease. Legal
Extraction Loss (Shrinkage) The reduction of natural gas volume when condensates form and are removed. Oil and Gas
Farm-in A agreement signed between two entities where an entity buys in or acquires interest in a lease owned by another entity. This is usually done to help the original lessee with development costs. Land
Farm-out An assignment or partial assignment of an oil and gas lease from one lessee to another. Land
Field An oil and gas field represents an area with a common reservoir. These can also be assigned by state entities such as the Railroad Commission (RRC) in Texas. Geology
Field Run Ticket A record created by the purchaser or transporter of oil and gas documenting how much oil and/or gas was removed from the location. Oil and Gas
First Purchaser The entity that first purchases the production from the oil and gas well. Only the first purchaser should report production to avoiding duplicate reporting of volumes. Oil and Gas
First Right of Refusal For oil and gas, this is a provision giving the current lessor an option to top lease before any other third party. Land
Flaring The process in which natural gas is burned off when extracting oil. This is common in many areas with oil production that has associated natural gas. If takeaway pipes for natural gas are not present, flaring is often performed to burn off the gas as it's produced. A low price environment for natural gas also promotes flaring. When you see a lot of bright lights in an oilfield at nights that emulate a candle, this is flaring. Oil and Gas
Flush Production A high flow rate of oil and gas production associated with a new well coming online. MineralAnswers has a few variables to help quantify this including peak oil, peak gas, and peak boe. Oil and Gas
Forced Pooling The act of being forced by the state to participate in an oil and gas producing unit. This is usually done to allow production in the absence of a few mineral owners signing a lease. It's important to understand states that have forced pooling and those that do not. There are advantages and disadvantages to each. Land
Formation A continuous body of rock in the subsurface that is distinctive and can be reasonably mapped. There can be multiple producing formations beneath any given surface area. Geology
Gas Lift The process of injecting gas down the well to help lift fluids from the wellbore. Oil and Gas
Gathering System The network of pipelines and processing facilities that transport oil and gas from the wells to a main storage facility, processing plant, or a hub for further transmission downstream. Oil and Gas
GOR (Gas to Oil Ratio) The ratio of gas relative to oil in a production stream. It's calculated by taking gas production divided by the oil production. With current commodity prices, investors and operators are usually looking for lower GOR values which indicate more oil production versus gas production. Oil and Gas
Government lot A subpart of a section which is not described as an aliquot part of the section, but which is designated by number, for example, Lot 3. A lot may be regular or irregular in shape, and its acreage may vary from that of regular aliquot parts. These lots frequently border water areas excluded from the PLSS. Land
Grantee A Grantee is a person or entity who receives title of property from another person or entity (Grantor) through a legal instrument known as a deed. For example if an entity or operator has leased property from a mineral owner, and later sells that lease to another entity or operator, the seller is the Grantor and the buyer is the Grantee. Land
Grantor A Grantor is a person or entity who transfers title of property to another person or entity (Grantee) through a legal instrument known as a deed. For example if an entity or operator has leased property from a mineral owner, and later sells that lease to another entity or operator, the seller is the Grantor and the buyer is the Grantee. Land
Gross Mineral Acres The full, undivided area of mineral acre ownership by an entity Land
Held by Production (HBP) A lease provision on minerals extending the right to operate a lease as long as the property produces a minimum quantity of oil and gas. Land
Horizontal Drilling A well that builds from a vertical trajectory to a horizontal trajectory and extends horizontally for contact with more surface area of the producing formation. This type of drilled is known as Unconventional Drillng as it deviates from the normal vertical well development in the past. Oil and Gas
Hydraulic Fracturing (Fracing) For modern unconventional wells, the formations are usually very tight and lack sufficient permeability to allow for the flow of oil and gas to the surface. To overcome this, these wells undergo an intense stimulation of fluid, chemicals, and proppant agents create a fracture network and hold the fractures open. This process allows for the flow of the oil and gas to the wellbore for production. Oil and Gas
Hydrocarbon A compound of hydrogen and carbon which are the chief components of oil and gas. Gas represents the smaller hydrocarbon chains and the chains get larger with the transition to oil. Oil and Gas
Independent Producer An oil and gas company usually focused on exploration and production and not involved in midstream or refining operations. Oil and Gas
Infill Drilling Wells drilled between existing wells on a lease or unit. The ability to add infill wells without affecting the current wells can add value to the mineral property. Oil and Gas
Initial point The starting point for a survey. Land
Injection Well A well used to inject fluids into the subsurface. This can include salt water disposal wells for water disposal or gas injection wells to help with recovery. Oil and Gas
Interest Type The type of interest owned in an asset. Types include Working Interest (WI), Royalty Interest (RI), and Overriding Royalty Interest (ORRI). Land
Intestate Death This refers to a death where the deceased did not have a valid will in place. Legal
IP (Initial Production) The initial flow rate of a well as reported in a test from the operator. Understanding how the test was performed is important when evaluating the results. Oil and Gas
Land Brokerage Company An organization that leases oil and gas minerals on behalf of an operator. Land
Land Department The department within an oil and gas company responsible for acquriing leases in areas where the company thinks oil and gas can be produced economically. Land
Land Grant A land grant is an area of land to which title was conferred by a predecessor government and confirmed by the U.S Government after the territory in which it is situated was acquired by the United States. These lands were never part of the original public domain and were not subject to subdivision by the PLSS. Land
Landman A role responsible for working with mineral owners to lease their property for oil and gas exploration. Land
Lease A legal contract that grants the right for an entity, usually an operator, access to extract oil and gas from the subsurface. The mineral estate owner, or lessor, usually receives a lease bonus payment and a percentage of of the production value extracted by the operator, or lessee. Land
Lease Bonus The one-time cash payment that is paid by the lessee to the mineral estate owner for the right to extract oil and gas from the subsurface. This is usually calculated on a per acre basis. Land
Leased Mineral Rights Mineral rights that do not have current production associated with them, but have been leased. Land
Lease Term How long the lease will remain in force and certain actions that apply to the lease. For example the lease term may be 3 years and continues as long as a well is drilled that is capable of producing oil or gas. Land
Legal Description A land description that delineates the location of specific area of real property. Land
Lessee A person or entity which holds the lease of a property. In more common terms this would be a tenant. If a mineral owner leases his or her subsurface mineral rights to an operator the mineral owner is the lessor (landlord) and the operator is the lessee (tenant). Land
Lessor A person or entity who leases out their property. In more commond terms this would be a landlord. For subsurface mineral rights, the mineral owner would lease their property to an operator to give them rights to extract minerals. In this common case, the mineral owner is the lessor and the operator is the lessee. Land
MCF The abbreviation for a thousand cubic feet of gas. This a common measurement for reporting gas production. Oil and Gas
Midstream The oil and gas industry can be divided into three segments. Upstream, Midstream, and Downstream. The Midstream sector involves the transportation of crude oil and natural gas from the wellhead to the downstream markets. Transportation types include pipelines, trains, and trucks. Midstream activity can also include processing facilities that remove impurities such sulfur and further break down Natural Gas Liquids into products through a fractionation process. Oil and Gas
Mineral Lease In the oil and gas industry, this refers to the agreement between a mineral owner and entity to allow the entity to explore for oil and gas within certain terms. Land
Mineral Owner The owner of the rights and interests in a mineral estate. This can be "severed" from the surface rights. When the mineral owner does not have surface ownership, they still have the right to pursue the mineral interests. Land
Mineral Rights Owning the rights to recover the minerals below the surface of a property. This can be separate or "severed" from surface rights. Land
Mineral Title A mineral title refers to legal ownership of the mineral estate in a tract of land Land
MMCF The abbreviation for a million cubic feet of gas Oil and Gas
Natural Gas Processing Plant A processing plant that removes Natural Gas Liquids (NGL's) and other impurities from natural gas. Oil and Gas
Net Mineral Acres The net mineral acres owned by an entity. For example if an entity owns 20% of the minerals in a tract of land comprising 100 acres, the net mineral acres owned would be 20 acres. Land
Net Royalty Acres Net Royalty Acres (NRA) is a term used to represent the area of an asset base that is receiving royalties. These are usually normalized to a royalty percentage. A common percentage is 12.5%. This means that a property receiving a 25% royalty would get twice the amount of Net Royalty Acres than one receiving a 12.5% royalty. Land
NGL Fractionation The process of breaking down mixed NGL (Natural Gas Liquids) streams into purity products such as natural gasonline, ethane, propane, and butanes Oil and Gas
NGL (Natural Gas Liquids) Natural Gas Liquids (NGL's) are hydrocarbons that are separated from natural gas and settle in a liquid phase. These typically receive higher sales prices than dry gas although not as high as oil prices. Oil and Gas
Non-Producing Mineral Rights Mineral rights that do not have current production, or cash flow, associated with them and have not been leased. These are usually valued less than similar acreage with producing minerals. Land
NRI (Net Revenue Interest) The total revenue interest that an entity owns in a particular oil and gas asset which could include a well, a lease, or a production unit. Royalty interests are taken off the top before calculating the NRI for an operator. Land
Oil and Gas Mineral Lease (OGML) In the oil and gas industry, this refers to the agreement between a mineral owner and entity to allow the entity to explore for oil and gas within certain terms. Land
Oil Gravity A measurement of density for hydrocarbons. For the most common measurement, API Gravity, the number is an inverse calculation where the higher density hydrocarbons are lower than the less dense hydrocarbons such as gas. Oil and Gas
OPEC OPEC, The Organization of Petroleum Exporting Countries, is currently comprised of 14 countries. The member countries include Algeria, Angola, Congo, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Lybia, Nigeria, Saudi Arabia, United Arab Emirates, and Venezuela. Their mission is to coordinate and unify the petroleum policies of its member countries and ensure the stabilization of oil markets in order to secure an efficient, economic, and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry. Oil and Gas
Operating Expense The ongoing costs for keeping an oil and gas well in operation and production. These are different from the costs to drill and complete the well. Finance
Operator An entity with responsbility for drilling and maintaining well operations including complying with state regulatory bodies. Oil and Gas
Overlapping Spacing Unit An overlapping spacing unit allows on operator to drill a well on the border between two existing spacing units. The distributions of the new well will be shared equally by the owners of both spacing units.
Overriding Royalty Interest (ORRI) A royalty in excess of the royalty provided to the mineral owners in an oil and gas lease. These do not affect the mineral owners. An example could be a geologist given a 1% ORRI by the operator in exchange for doing the subsurface analysis on the play. Land
Owner Adjustments/Taxes Taxes and other adjustments that effect the net value of the products sold for an asset that are allocated to the owner's portion of decimal interest. Other adjustments can include taxes, processing charges, and gathering expenses. Finance
Owner Decimal Interest The percentage of ownership in an asset. This is usually stated on a division order. Land
Owner Gross Value Often seen on a check stub, this represents the interest owner's portion of the products sold from an asset. This is based on the decimal percentage of ownership. Finance
Owner Net Value Often seen on a check stub, this represents the owner's portion of the products sold from an asset after the deduction of taxes and other adjustments. This is based on the decimal percentage of ownership. Finance
Paid-up Lease A lease that will remain in place for the entire primary term without further payments. This is usually secured through a bonus payment made during the lease agreement. This eliminates the need for periodic payments during the lease period. Land
Participating Royalty Interest Also known as a working interest, the owners of this interest are obligated to pay a specified percent of the costs to drill and complete the well in exchange for a revenue percentage. Land
Peak Oil The hypothetical point in time when global production reaches its maximum rate. After this point is reached, global supply will gradually decline. Oil and Gas
Percent Liquids The percentage of hydrocarbons produced in liquid phase versus gas phase. This is a common metric for analysis as commodity prices are historically volatile. Currently liquids are more valuable than gas in the US. Oil and Gas
Perforation The communication channel created from casing or liner to the producing formation. There are many methods for this but a common method is the use of targeted explosive charges. Oil and Gas
Permeability The measurment of a rocks ability to transmit fluids. New technology, such as Hydraulic Fracturing, has provided the ability to create permeability in tighter rocks such as shales. Geology
Permit An application to drill a well that an operator files with the state regulatory agency. When applying for a permit, the operator must submit detailed drilling plans for approval. A permit represents an intent to drill which is why many mineral owners will get contacted about selling their assets if they're within the unit boundary of a new approved permitted well. Recent permitting is important to understand and can be accessed here. Oil and Gas
Play A Play refers to a focused region of oil and gas activity. An example of this is the STACK play in Oklahoma. The STACK is one of many plays in the Anadarko Basin, but the STACK represents a focused area of activity. Some Basins, such as the Delaware Basin, can also be considered plays. Four this reason we provide a field that combines both Basins and Plays to match areas of focused drilling activity with names commonly known in the industry. This allows our clients to best filter the data in focused regions for analysis. Geology
PLSS The Public Land Survey System is a surveying method developed by the US Department of Interior that is used to subdivide and describe land in the United States. Land
Plugged and Abandoned (P&A) A well that has been plugged and abandoned. Usually this is done with cement. Oil and Gas
Pooled Unit The joining together of tracts or portions of tracts so that there is sufficient acreage to receive a drilling permit by the governing regulatory body. Land
Porosity The percentage of voids or open space in a rock formation. This is calculated by taking the total voids divided by the total volume. In producing formation, these voids are filled with hydrocarbons or water. Understanding porosity can be important for understanding the producibility of a formation. Geology
Possible Reserves Possible reserves refer to a 10-50 percent likelihood that oil and gas will be commercially extracted from a given area Oil and Gas
Post Production Costs Costs incurred in the process of getting the crude oil and gas from the wellhead to the market. This can include costs such as transportation, compression, and other processing charges. Whether or not a royalty owner's payments are deducted for Post Production Costs will be determined by the details of the lease. This is important for mineral owners to understand during lease negotiations. Finance
Primary Recovery Primary Recovery refers to the oil and gas production that naturally lifts to the surface or is assisted by artificial lift devices such as pumps. Oil and Gas
Primary Term The initial time period that a lessee has to develop the property as stated in lease agreement. For example the lease term may be 3 years and continues as long as a drilled well is producing economic quantities of oil and gas. Land
Principal meridian A meridian line running through an arbitrary point chosen as a starting point for all sectionalized land within a given area. Land
Probable Reserves Probable reserves refer to a 50-90 percent likelihood that oil and gas will be commercially extracted from a given area Oil and Gas
Producing Mineral Rights Mineral rights that have current production, or cash flow, associated with them. These are usually the highest valued mineral rights. Land
Production Unit An area allocated to a well by a regulatory authority to be included in the drilling and production of a well. Land
Property Adjustments/Taxes Taxes and other adjustments that effect the net value of the products sold for an asset. Other adjustments can include taxes, processing charges, and gathering expenses. Finance
Property Gross Value Often seen on a check stub, this represents the total value of the products sold from an asset. Finance
Property Net Value Often seen on a check stub, this represents the total value of the products sold from an asset after the deduction of taxes and other adjustments. Finance
Proration Unit The amount of acreage, as stated by a regulatory authority, that can be efficiently and economically drained by a well at a particular depth or formation. Land
Proved Reserves Proved reserves refer to greater than 90 percent likelihood that oil and gas will be commercially extracted from a given area Oil and Gas
Public domain Land owned by the Federal government for the benefit of the citizens. The original public domain included the lands that were turned over to the Federal Government by the Colonial States and the areas acquired later from the native Indians or foreign powers. Sometimes used interchangeably with Public lands. Land
Public lands Lands in public ownership, therefore owned by the Federal government. Sometimes used interchangeably with Public domain. Land
Pugh Clause A clause sometimes added to an oil and gas lease that only extends held by production lease terms to certain depths or aerial extents that are producing. This can be particular important in "stacked pay" areas such as the Permian with multiple producing formations. Land
Qualified Intermediary Also known as an Accomadator, this a person or company that helps facilitate 1031 tax-deferred exchanges Finance
Quitclaim Mineral Deed A legal instrument used to transfer interest in real property. Quitclaim deeds are most often used to transfer property within a family.
Range A vertical column of townships in the PLSS. Land
Recompletion Reentering a previously completed well and applying new stimulation or repairing the old completion in hopes of gaining more productivity from the well. Oil and Gas
Regulatory Agency The authority within each state that administers oil and gas policy as determined by the state policy makers. These bodies also usually contain publicly available oil and gas data. MineralAnswers consolidates, cleans, and adds additional logic to this data. Oil and Gas
Rental Lease A lease with payment due at some specific time period, usually yearly. This is similar to most residential housing or an apartment lease where recurring payments are necessary for the lease to remain in place. Land
Reserve Mud Pit A pit used to collect and store waste from drilling operations such as drilling mud, brine, and base oil. The pit is usually plastic-lined. Oil and Gas
Reservoir For conventional oil and gas activity, this refers to a body of like-kind rock having sufficient porosity and permeability to store and transmit fluids. However with hydraulic fracturing, operators can now produce reserves in low permeability tighter rocks such as shales. Geology
Reservoir Rock For conventional oil and gas activity, this refers to a body of like-kind rock having sufficient porosity and permeability to store and transmit fluids. However with hydraulic fracturing, operators can now produce reserves in low permeability tighter rocks such as shales. Geology
Revenue Statement The statement, usually monthly, sent by either the operator or the purchaser to all of the interest holders in an oil and gas property. These outline the production volumes, prices, and any applicable post-production expenses. Finance
Revocable Trust A trust whereby provisions can be altered or canceled dependent on the grantor. During the live of the trust, income earned is distributed to the grantor. After death, the property transfers to the beneficiaries.
Rig Structures that house equipment that can be used to drill wellbores. Oil and Gas
Royalty Interest An percentage of production value that the mineral owner receives from oil and gas production as stated in the lease agreement. The royalty is paid by the lessee (operator) to the lessor (property owner) once the well is producing. Generally, the royalty interest owner is not required to pay costs to drill or operate the well. Land
Royalty Statements Royalty statements include accounting information mailed from lease operators to the royalty owners. These are usually sent every month. Finance
Salt Water Disposal Well (SWD) Wells that are used to dispose of saltwater produced during the oil and gas extraction process. It's not uncommon for even the best wells to produce more saltwater than oil which creates the need to dispose of very large volumes of produced salt water. Oil and gas wells that are no longer productive are sometimes converted into saltwater disposal wells. Usually these wells undergo strict regulation so that environmental concerns such as freshwater aquifer protection are met. In some cases, SWD wells can also perform a dual task of Enhanced Oil Recovery (EOR) to help push oil and gas production to nearby wells. Oil and Gas
SCF The abbreviation for a standard cubic foot of gas Oil and Gas
Seal Rock A rock that forms a barrier or a cap around a reservoir rock. This can create large accumulations of hydrocarbons as the hydrocarbons get trapped by the seal rock during migration. Geology
Secondary Recovery Secondary Recovery refers to oil and gas production that is the result of water and gas injection into a field to help displace the oil into a wellbore. Secondary Recovery does not change the properties of the hydrocarbons which distinguishes it from the EOR or Tertiery Recovery. Oil and Gas
Secondary Term This refers to an oil and gas lease being held in force past the primary term of the lease. Examples include extension of a lease with an addition bonus payment of from the development of economic quantities of oil and gas. Land
Section A one-square-mile block of land, containing 640 acres, or approximately one thirty-sixth of a township. Due to the curvature of the Earth, sections may occasionally be slightly smaller than one square mile. Land
Separator A vessel used to separate oil, gas, and water from the total fluid stream of a well. Oil and Gas
Severance Tax Severance taxes occur when a nonrenewable resource such as oil and gas is extracted or severed from the subsurface. Finance
Severed Minerals Minerals in which the title has been severed from the surface title. It's not uncommon for the mineral owner and surface owner to be different. Land
Shale Shale is a fine-grained sedimentary rock that forms from the compaction of tiny fragments of other mineral particles. The fragment sizes are silt and clay sized and before compaction this mix is commonly known as "mud". Geology
Shut-in Royalty Payment made by the lessee to the lessor to keep a lease active when a well capable of producing is being held back due to certain market conditions such as the pipeline for transport not yet being ready. Land
Source Rock Rocks from which hydrocarbons have been generated or are capable of being generated. Shales are a common source rock because they were deposited in an anoxic environment that allowed for the preservation of organic materials that accumulated along with the rocks. Geology
Sour Gas Natural Gas that contains significant amounts of hyrdogen sulfide, H2S. Oil and Gas
Spud Spudding is the process of beginning to drill a well. A spud date is a common reporting date that represents when drilling commenced. Oil and Gas
Stacked Pay This term usually refers to more than one producing formation beneath a given surface area. Having the potential for multiple producing geological formations can enhance the value of the acreage. Geology
Stripper Well A well that is currently producing but is nearing the end of its economic life Oil and Gas
Substandard Acreage A pooled unit, unitized tract, or lease which does not contain enough acreage for the proration unit rules set by the state for that particular field or producing formation. Land
Surface Casing Large diameter casing set in the upper portion of the wellbore to protect fresh water acquifers and to provide structural integrity for the wellbore. Oil and Gas
Surface Estate The Surface Estate owner has rights to the surface of the property, but not necessarily the mineral estate as these can be severed. Land
Surface Owner Owning rights to the Surface Estate or suface of the property. This doesn't guarantee rights to the minerals as these estates can be severed. Land
Surface Rights Ownership rights in a parcel of real estate limited to the surface. It does not include rights to the oil and gas minerals. However surface owners usually own the right to participate in operations such as source water wells, water disposal, and pipeline right-of-way. Land
Suspended Funds Royalties and Interests from the sale of hydrocarbons that are held by the seller until certain requirements are met. Finance
Sweet Gas Natural gas that doesn't contain Hydrogen Sulfide, H2S Oil and Gas
Texas Abstract In Texas, the term abstract refers to an original land survey describing an area transferred from the public domain by either the Republic of Texas or the State of Texas. These surveys are recorded in the "State Abstract of Land Titles," which is maintained by the Texas General Land Office. Each recorded survey is assigned an abstract number, which is unique within the county in which the survey falls. Because Texas has never performed a uniform statewide land survey, these original surveys called "Patent Surveys" constitute the State's Official Land Survey System. Land
Texas Abstract Number Number assigned to each Texas abstract that is is unique within the county in which the abstract falls Land
Texas Block Number A block is a defined set of original land surveys. A block has an identifying name and/or number, and surveys within it are usually consecutively numbered, mile-square sections. Land grants from the State of Texas to railroad companies were often patented in blocks and sections. The term block is also used as a unit of a subdivision, i.e., subdivision/block/lot. Land
Texas Section A section refers to a square land survey measuring exactly one mile on each side. Some of the land transferred from the public domain by the state of Texas was surveyed and patented in units of square miles. The Texas General Land Office officially considers these units sections. Also, it was common that larger land grants, such as school lands and capitol lands, were subsequently surveyed into square mile units for the convenience of sale; these surveys are also called sections. In addition, the term "section" is commonly used to describe surveys in a group that have been assigned consecutive survey numbers, even though some of them do not have the proper shape or size to truly be sections. Land
Texas Survey Name A survey is a certified measured description of a piece of land. The term sometimes refers to the land itself. In Texas, original surveys were performed as part of the patenting process whereby land was transferred from the public domain. These "patent surveys," recorded at the Texas General Land Office, constitute an official land grid for the State and are the basis for subsequent land surveys.The name of the survey. Railroad companies, public/state agencies, and independent surveyors performed the vast majority of the original land surveys in Texas. The name of each survey typically corresponds to which of these three groups performed the original survey (i.e. T&P RR, H&TC RR Co., etc. for railroad companies; Public School Lands, University Lands, etc. for public/state agencies; TUBB JB, HOGG G JR, etc. for individual surveyors) Land
Title Abstract The history of specfific property showing ownership or other signficant events through time. Land
Top Lease A lease that covers the same area of land that is currently being leased. Top leasing is done by companies hoping to secure specific land for lease once the current lease expires. This is usually a good sign for mineral owners and often the original lessee will want to add a "first right of refusal" clause to avoid getting top leased. Land
Total Vertical Depth (TVD) This is the total vertical depth reached by the well. Oil and Gas
Township An approximately 6-mile square area of land, containing 36 sections. Also, a horizontal row of townships in the PLSS. Land
Tubing A small diameter pipe within the casin. An example is production tubing which is used to help provide an easy path for hydrocarbons from the reservoir to the surface. Oil and Gas
Unconvetional Development Unconventional Development in the modern oil and gas industry refers to drilling a horizontal wellbore and often stimulating tighter rock. Oil and Gas
Undeveloped Acreage Acreage in which wells have not been drilled or completed. Oil and Gas
Unitization The joining together of tracts or portions of tracts so that there is sufficient acreage to receive a drilling permit by the governing regulatory body Land
Upstream The oil and gas industry can be divided into three segments. Upstream, Midstream, and Downstream. The Upstream sector is the process of exploration and extraction of economic quantities of oil and gas to the surface. This industry segment includes the operators that lease acreage from mineral owners. Oil and Gas
Waterflood The process of injecting water into a producing formation to help push hydcarbons to a nearby wellbore. This is a type of Secondary Recovery. Oil and Gas
Wildcat An exploratory well in an unproven area with a goal of discovering a new field Oil and Gas
Wildcatter A person or entity who drills a well in an unproven area with a goal of discovering a new field Oil and Gas
Working Interest A type of ownership where both costs and revenue are shared based on the percentage of ownership. Costs include drilling, completing, and ongoing operating expenses. Land
Workover Activity performed on an existing well with hopes of restoring or increasing production Oil and Gas