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Glossary

Natural Gas Equivalents

1 cf 1 MBtu
1 Mcf 1 MMBtu
1 Mcf 1.054615 GJs
6 Mcf 1 Bbl
1 MMBtu 1.054615 GJs

Abbreviations

Bbl Barrel
Bcf Billion cubic feet
BOE Barrel of oil equivalent
BOE/d Barrels of oil equivalent per day
Btu British thermal unit
GJ Gigajoules
Mboe Thousand barrels of oil equivalent
Mcf Thousand cubic feet
MMcf Million cubic feet
MMcfe Million cubic feet equivalent

| A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |

A

Abandonment
Converting a drilled well to a condition that can be left indefinitely without further attention and will not damage freshwater supplies, potential petroleum reservoirs or the environment.

Alberta Natural Gas Reference Price (ARP)
A monthly weighted average field price of all Alberta gas sales, as determined by the Alberta Department of Energy through a survey of actual sales transactions. This price is used for royalty purposes.

B

Basis Differential
In the case of natural gas, the basis differential is the cost of moving gas from one location to another.

C

Completion
The process by which a well is prepared to produce oil and gas, involving such steps as running and perforating the casing.

D

Dry Gas
Natural gas from the well that is free of liquid hydrocarbons, or gas that has been treated to remove all liquids; pipeline gas.

Dry Wells
Exploratory or development wells found incapable of producing either oil or gas in sufficient quantities to justify completion as an
oil or gas well.

E

F

Field
The surface area above one or more underground petroleum pools sharing the same or related infrastructure.

Finding & Development Costs (F&D)
The costs to find and develop a barrel of oil equivalent, expressed in dollars per boe.

Fracturing
The practice of pumping special fluids down the well under high pressure; fracturing causes the formation to crack open, creating passages for the reservoir fluids to flow more easily into the wellbore.

G

H

I

Infill Drilling
Wells drilled between established producing wells on a lease in order to increase production from the reservoir.

J

Joint Venture
A cooperative agreement between two or more companies for a specific project or business venture, usually with one company acting as operator. All involved companies share in the costs and profits of the venture.

K

L

Land
In the petroleum industry, "land" often refers to the oil and gas rights on a particular area of land. For example, in a "land sale", the oil and/or gas rights are "sold" (although in reality only the oil and gas rights, not the land, are released).

Lease
An agreement between two or more parties where the owner of the surface and/or mineral rights grants another party the right to drill and produce petroleum substances in exchange for payment.

Liquefied Natural Gas (LNG)
Supercooled natural gas that is maintained as a liquid at or below 160 Celcius; LNG occupies 1/640th of its original volume and is therefore easier to transport if pipelines cannot be used.

M

Maturity
Relative state of development of natural gas resources in a field, reserve, basin, or other area. In common usage, a "mature field" is one whose natural gas production has begun to decline.

Mineral Rights
The rights to explore for and produce the resources below the surface. In the petroleum industry, mineral rights can also be referred
to as land.

N

Netback
The amount received from the sale of commodities after applicable deductions have been made. Normally, netbacks are expressed in dollars per barrel of oil equivalent.

  • Cash Flow Netback
    The amount received from the sale of oil and natural gas after cash expenses are deducted. Deducted expenses include operating costs, royalty payments, current taxes, and general and administrative costs.
  • Field Netback
    The amount received from the sale of oil and natural gas after royalty payments and operating costs have been deducted.

O

P

Peaking Fuel
Fuel required over and above a normal level of demand. If a day becomes exceptionally hot and incremental electricity is required for added air conditioner use, this is referred to as peaking.

Perforate
The process of creating holes in the casing to allow hydrocarbons to flow into the wellbore for production; usually consists of a hardened metal rod powered by an explosive charge.

Permeability
The capacity of a reservoir rock to transmit fluids; how easily fluids can pass through a rock.

Porosity
The capacity of a reservoir to store fluids, the volume of the pore space within a reservoir. Thus porosity measures the capacity of the rock to hold natural gas, crude oil or water.

Q

R

Reserves
Recoverable portion of resources available for use based on current knowledge, technology and economics.

  • Developed Non-Producing Reserves
    Those reserves that either have not been on production, or have previously been on production, but are shut-in and the date of resumption of production is unknown.
  • Developed Producing Reserves
    Those reserves that are expected to be recovered from completion intervals open at the time of the estimate. They may currently be producing, but if shut-in, must have previously been on production, and the date of resumption of production must be known with certainty.
  • Developed Reserves
    Those reserves that are expected to be recovered from existing wells and installed facilities or, if facilities have not been installed, that would involve a low expenditure to put the reserves on production. The developed category may be subdivided into producing and non-producing.
  • Probable Reserves
    Reserves believed to exist with reasonable certainty based on geological information.
  • Proved Reserves
    Reserves that can be economically produced with a large degree of certainty from known reservoirs using existing technology.
  • Undeveloped Reserves
    Those reserves that are expected to be recovered from known accumulations where a significant expenditure is required to render them capable of production.

Reserve Life Index (RLI) or Reserves to Production Ratio (RPR)
The hypothetical number of years it would take to deplete reserves at the current production rate. Normally calculated using the latest reported reserves (proved or proved plus probable) divided by the latest reported daily production (annualized). The actual productive life of the reserves can be significantly longer as production declines over time.

Return of Capital
A return of capital is a payment from a security to an investor representing the return of all or a portion of an original investment and thus decreasing the value of that investment.

Return on Capital
It is also known as the return on invested capital (ROIC) and is a measure of how effectively a company utilizes its net assets
to generate revenue.

Royalty
The owner’s share of production or revenues retained by government or freehold mineral rights holders. In natural gas operations, the royalty is usually based on a percentage of the total production.

S

Seismic
A method of mapping subsurface structures using data derived from transmitting acoustic energy into the earth and recording the energy reflected back from the subsurface geological boundaries.

Shrinkage
The reduction in volume of wet natural gas due to the extraction of some of its constituents, such as hydrocarbon products, hydrogen sulphide, carbon dioxide, nitrogen, helium and water vapour.

Surface Rights
The rights to work on the surface of the land.

Sweet Gas
Raw natural gas with a relatively low concentration of sulphur compounds, such as hydrogen sulphide.

T

U

V

Viscosity
The resistance to flow, or “stickiness,” of a fluid.

W

Wellbore
A hole drilled or bored into the earth, usually cased with metal pipe, for the production of gas or oil.

Working Interest
A percentage of ownership in an oil and gas lease granting its owner the right to explore, drill and produce oil and gas from a tract of property. Working interest owners are obligated to pay a corresponding percentage of the cost of leasing, drilling, producing and operating a well or unit. After royalties are paid, the working interest also entitles its owner to share in production revenues with other working interest owners, based on the percentage of working interest owned.

X

Y

Z

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