Oil And Gas Terms

Front 1

3D Seismic

Back 1

Reflection seismic methods are used to create a picture of the subsurface that should enhance the ability of the oil and gas company to successfully select future well locations. 3D seismic has become a common exploration and production tool. Reflection seismic is a method that allows us to image changes in the subsurface geology by inducing an acoustic wave from near the surface of the earth and listening for the echoes from deeper stratigraphic boundaries.

Front 2

Abandoned Well

Back 2

A well not in use because it was a dry hole originally, or because it has ceased to produce.

Front 3

Acid Frac

Back 3

The process of opening cracks in hard carbonate productive formations by using a combination of oil and acid under high pressure.

Front 4

Allowable

Back 4

This is the quantum of oil or gas that a well will be allowed to produce under the rules and regulations of the Oklahoma Corporation Commission.

Front 5

Annual One-Point Test

Back 5

Test which measures the open flow capacity of a gas well after the well has been shut-in for a minimum of 24 hours. In Oklahoma, this test is required once a year to determine the maximum allowable for the well average over a year. The test result is required to be filed at the OCC.

Front 6

Area of Mutual Interest

Back 6

An agreement between parties that covers a legally described area in which the parties agree to share on an agreed to basis, additionally acquired oil and gas leases or other interests acquired after the execution of the agreement.

Front 7

Bbl

Back 7

One stock tank barrel, of 42 U.S. gallons liquid volume, used in reference to crude oil, condensate or natural gas liquids.

Front 8

Bcf

Back 8

One billion cubic feet of natural gas

Front 9

Bcfe

Back 9

One billion cubic feet of natural gas equivalent using the ratio of one barrel of crude oil, condensate or natural gas liquids to 6 Mcf of natural gas.

Front 10

Btu

Back 10

British thermal unit, which is the heat required to raise the temperature of a one-pound mass of water from 58.5 to 59.5 degrees Fahrenheit.

Front 11

Basin

Back 11

A large natural depression on the earth's surface in which sediments generally brought by water accumulate.

Front 12

Buck the Line Pressure

Back 12

A slang term used to reflect the gas being produced is less than the pressure in the pipeline, hence the gas will not be able to get into the pipeline without some type of compression (to increase the pressure).

Front 13

Cash Balancing

Back 13

A mechanism where cash is paid by a leasehold owner who is "over balanced" to an owner who is "under balanced" at the end of the economic life of the well.

Front 14

Carried Working Interest

Back 14

This is where a working interest owner (often the Operator), Party "A" has an agreement where Party "A" assigns working interest to Party "B" and has Party "B" pay part of Party "A's" working interest share of the costs of drilling, testing, and completing a well. Typically, this is done to a specific point (i.e. to casing point; to the tanks.) i.e. Party "B" receives a 1/4 working interest and pays for a 1/3 of the working interest - the "carried" working interest is 8.3333%. (33.3333% - 25%).

Front 15

Casinghead Gas

Back 15

Gas produced with oil in oil wells, being the gas being taken from the well through the casing head at the top of the well, as distinguished from gas produced from a gas well.

Front 16

Certified Gas Storage Area

Back 16

An area certified by the OCC which marks the boundaries of the gas storage area into which the gas will be injected, typically a depleted common source of supply.

Front 17

Commercial Salt Water Disposal Well

Back 17

An authorized disposal well where produced salt water produced out of oil and/or gas wells outside of the unit is properly disposed of into an existing wellbore.

Front 18

Commission En Banc

Back 18

The three Oklahoma Corporation Commissioners sitting together, hearing a case or appeal, and rendering a decision.

Front 19

Completed Well Costs

Back 19

The cost of drilling, testing, equipping, and producing a new well, which includes the dry hole costs.

Front 20

Compressor

Back 20

An installation in which the pressure of gas is raised for transmission through the pipeline while the gas is cooled, scrubbed, and dehydrated.

Front 21

Condemnation

Back 21

The statutory process by which land is taken through a judicial proceeding allied eminent domain to determine the "value" of the land "taken" and subsequently made available for pipelines and underground storage.

Front 22

Conservation Docket (CD)

Back 22

The docket at the OCC where the "general" oil and gas cases are filed and set for hearing before an Administrative Law Judge.

Front 23

Correlative Rights

Back 23

Each owner of land in a common source of supply of oil and gas has privileges as against other owners of land therein to take oil and gas from there by lawful operations conducted on his own land, limited, however, by duties to other owners not to injure the common source of supply and by duties not to take an undue proportion of oil and gas.

Front 24

Cross-Section

Back 24

The process of "hanging" well logs side by side on a common datum point to compare the "signature" (readings) of the porosity of the same common source of supply or the same lens within a common source of supply. Used to correlate common sources of supply across multiple units and can be used to show continuity across multiple units to show the likelihood of drainage or no possible drainage.

Front 25

Dehydration ("DHi" Unit)

Back 25

A unit typically on location used to remove water from fluid produced from oil wells.

Front 26

Delay Rental

Back 26

A sum of money payable to the lessor for the privilege of delaying the commencement of drilling operations during the primary term of the oil and gas lease, paid on or before the first year anniversary of primary term of the oil and gas lease.

Front 27

Deleterious Substances

Back 27

Any substance that, if added to any water, would degrade or alter the quality of that water so that it becomes toxic or harmful. Also described as salt water, silt, sediment or sediment-laden water, raw concrete or concrete leachate, or any other substances that may cause damage to the surface or any underground water supply or formation.

Front 28

Directional Well

Back 28

The drilling of a well that departs materially from the vertical. In Oklahoma, a Bottom Hole Survey (BHS) is required to be submitted to the OCC before an allowable is assigned to the well.

Front 29

Disposal Well

Back 29

A well employed for the re-injection of salt water produced with oil into an underground formation or common source of supply within the Unit.

Front 30

Division Order

Back 30

A contract of sale to the purchaser of the oil or gas executed by all owners in the well. The order directs the purchaser to make payment for the value of the products taken in the proportions set out in the division order. This includes all owners in the well.

Front 31

Drilling and Spacing Unit

Back 31

The area of land identified by size (i.e. 640 acre drilling and spacing unit) determined by the OCC, whereby one well will economically and efficiently drain the recoverable hydrocarbons underlying the unit.

Front 32

Drill to Earn

Back 32

A term used in an oil and gas agreement. This is a situation where one party (Party "A") owns a leasehold and agrees to convey to another party (Party "B") Party A's leasehold interest in the well bore on the condition that Party "B" drills a well to a specified depth. If Party "B" drills to the specified depth, Party "B" thereby "earns" the leasehold acreage of Party "A" in the well bore and gets an assignment.

Front 33

Dry Gas

Back 33

Natural gas without liquid constituents.

Front 34

Dry Hole Costs

Back 34

The cost to drill a well to Total Depth or Casing POint, without completion costs added in.

Front 35

Easement

Back 35

Incorporeal rights of user of the surface. Upon the severance of minerals by lease or deed, so much of the surface as may be reasonably necessary for exploration for and the development of the minerals by the operator or lessee, absent express language in the creating instrument limiting the easements of the lessee or mineral owners. Also, permission of the surface owner in an instrument for pipelines, underground gas storage, power lines or the like.

Front 36

Economic Waste (Prevent)

Back 36

Requisite provision of 52 O.S. 87.1 which is part of what the OCC is charged with doing - preventing economic waste (not leaving gas or oil in the ground) (authorizing drilling to "capture" oil and gas).

Front 37

Enforcement Docket (EN)

Back 37

The docket at the OCC where either the Commission staff, or in rare instances an individual or company, file to enforce some rule or regulation of the OCC or violation of some rule or regulation of the OCC.

Front 38

Enhanced Recovery

Back 38

Another name for secondary recovery. This is where the initial phase of production is winding down and the Operator chooses to "water flood" or inject CO2 into a common source of supply in a larger area (a secondary recovery unit) to increase the ultimate withdrawal of the oil and or gas.

Front 39

Farmout ("F/O")

Back 39

A contractual agreement with an owner who holds a working interest in an oil and gas lease to assign all or part of that interest to another party in exchange for fulfilling contractually specified conditions, typically drilling a well to a specific depth or common source of supply.

Front 40

Field

Back 40

An area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.

Front 41

Frac

Back 41

A term used to refer to the method used to increase the deliverability of a production by pumping a liquid or other substance into a well under pressure to crack or fracture and prop open the hydrocarbon bearing formation.

Front 42

Gas

Back 42

Natural gas, which sometimes includes gas condensate (liquid). Can on occasion mean casing head gas produced from an oil well.

Front 43

Gas Balancing

Back 43

Various owners in a gas well set forth their agreement on how the production will be balanced in the event one or more of the parties take more or less of its allocable share of production.

Front 44

Gas Condensate

Back 44

Associated oil called distillate, typically produced with natural gas from a well classified as a gas well. This condensate is liquid in form.

Front 45

Gas Gathering Docket

Back 45

A limited docket at the OCC where a producer can file a grievance against a gas gatherer (purchaser) if a producer believes it is being discriminated against.

Front 46

Gas Gathering Stystem

Back 46

A series of gas pipelines that collect gas from various wells to be delivered and connect to a larger pipeline system.

Front 47

Gross Isopach Map

Back 47

A geological mapping of a common source of supply using the gross feet of sand measurement from the porosity logs run in wells.

Front 48

Habendum Clause

Back 48

The clause in a deed or lease setting forth the duration of the grantee's or lessee's interest in the premises, subject to other provisions contained in the lease which may provide for an earlier or later termination under prescribed circumstances or upon the sharpening of certain events.

Front 49

Heater-Treater

Back 49

A tall, cylindrically shaped upright unit placed on the surface of the land connected to a tank battery (a series of oil tanks and water tanks) serving producing wells, commonly used in oilfield production process in order to separate water and other foreign substances from the crude oil.

Front 50

Henry Hub Spot Price

Back 50

The price of natural gas, in dollars per MMbtu, being traded at the Henry Hub in Louisiana in transactions for next-day delivery, measured downstream from the wellhead after the natural gas liquids have been removed and a transportation cost has been incurred.

Front 51

Horizontal Well/Horizontal Spacing

Back 51

A wellbore drilled laterally at an angle of at least eighty (80) degrees to the vertical and with a horizontal projection exceeding one hundred (100) feet measured from the initial point of penetration into the productive formation through the terminus of the lateral in the same common source of supply.

Front 52

Hydra Frac

Back 52

A mechanical method of increasing the permeability of rock, and thus increasing the amount of oil or gas produced from it. The method employs hydraulic pressure to fracture the rock. It is extensively employed on limestone formations.

Front 53

Increased Density

Back 53

A regulatory order permitting an exception to the normally spacing rules to authorize the drilling of an additional well or wells in a single drilling and spacing unit.

Front 54

Infill Wells

Back 54

Wells drilled into the same pool as known producing wells so that oil or natural gas does not have to travel as far through the formation.

Front 55

Injection Well

Back 55

A well employed for the introduction into an underground stratum of water, gas, other fluid under pressure, or "void pore space." Typically involves the disposal of salt water produced with oil or other waste, pressure maintenance, cycling, secondary recovery and tertiary recovery.

Front 56

Initial Hearing Docket

Back 56

All cases filed at the OCC are placed on the Initial Hearing Docket. This docket is where a case first comes on for hearing before an Administrative Law Judge, if unprotected.

Front 57

Initial One-Point Test

Back 57

Flow test required by the OCC upon completion of a gas well. The Calculated Absolute Open Flow ("CAOF") is reported to the OCC.

Front 58

Initial Report of the Administrative Law Judge

Back 58

After an Administrative Law Judge has heard a protested case (a trial) at the OCC, the ALJ issues a report which summarizes the facts of the case and issues his/her recommendation to the Commissioners.

Front 59

Irregular Spacing Unit

Back 59

A spacing unit created at the OCC which is irregular in size or shape based on specific geological testimony to support such irregular size or shape, and which is requested when the application is filed.

Front 60

Inverse Condemnation

Back 60

An action against a party which has not exercised its power of eminent domain, but whose activities are alleged to constitute a taking of property for which no compensation has been paid. The taking may be either permanent or temporary.

Front 61

Joint Operating Agreement ("JOA")

Back 61

An agreement among working interest owners describing how a well is to be operated and the many conditions and monetary arrangements for developing a unit or area.

Front 62

Lateral

Back 62

This is the horizontal portion or "leg" of a horizontal well that emanates from the terminus out to the bottom hole location (end of the lateral).

Front 63

Laydown Spacing Unit

Back 63

term used to denote a spacing unit which length east and west is greater than the length north and south i.e. S/2 and N/2 of a section or S/2 NE/4 and N/2 NE/4 of a quarter section.

Front 64

Life Estate

Back 64

Language usually reserved in an instrument of conveyance whereby the Assignor reserves certain rights for their lifetime. The language creating the life estate is extremely important as to what is actually been reserved. As to a mineral interest, it is most commonly the right to receive the income from the mineral estate, as well as any bonus, delay rental, or shut-in gas royalty during an individual's life. Many times, it is seen as a reservation by a parent(s) in their later years in deeds to their children.

Front 65

Location Exception

Back 65

The location of a well which is "off pattern" or outside the boundary of a proper location determined by the spacing rules. A well location authorized as an exception to the rules.

Front 66

Logs

Back 66

A systematic recording of data, such as a driller's log, mud log, electric well log, dual induction log, or radioactivity log. Many different logs are run in wells to discern various characteristics of down-hole formations.

Front 67

Look back (Delayed Election)

Back 67

An agreement typically between an Operator and a working interest owner, Party "B", where for some reason Party "B" did not commit to participate in a well (failure to receive notice/later acquired interest/did not receive proper notice in a pooling etc.). The Operator, after drilling the well, allows Party "B", the working interest owner, to get the well information (logs, etc.) before deciding whether or not to participate in the well.

Front 68

MBbl

Back 68

One thousand barrels of crude oil, condensate or natural gas liquids.

Front 69

Mcf

Back 69

One thousand cubic feet of natural gas.

Front 70

Mechanical Integrity Test

Back 70

A test where the well bore of a disposal well is checked for leaks, perforations, holes, or casing splits.

Front 71

Mineral Interest

Back 71

The property interest in Oklahoma that allows for the right to explore for oil and gas and to reduce the oil and gas to possession. Many times, this interest is created in oil and gas after a severance by mineral deed or oil and gas lease. Its duration is like that of common law estate,s namely, in fee simple, in fee simple determinable, for life or for a fixed term of years. The prime characteristic is the right to enter the land to explore, drill, produce, and otherwise carry on mining activities.

Front 72

MMBtu

Back 72

One million British thermal units

Front 73

MMcf

Back 73

One million cubic feet of natural gas.

Front 74

MMcfe

Back 74

One million cubic feet of natural gas equivalents using the ratio of one barrel of crude oil, condensate, or natural gas liquids to 6 Mcf of natural gas.

Front 75

Monitor Well

Back 75

There are two types of monitor wells. One is a well that monitors for the influx of salts water near a city water supply. The second is a well used by an underground gas storage operator to measure the pressure of the gas within the storage facility.

Front 76

Net Acres

Back 76

The percentage of total acres an owner has out of a particular number of acres, or a specified tract. An owner who has 50% interest in 100 acres owns 50 net acres.

Front 77

Net Isopach Map

Back 77

A geological mapping of a common source of supply using the net feet of sand measurement from the density logs run in wells, using a porosity cut-off (which typically is chosen to identify the hydrocarbons that will contribute production to the well bore).

Front 78

Net Revenue Interest ("NRI")

Back 78

A term used to descry the remaining share of a working interest owner's interest in a lease or leases after deducts (i.e. royalty, excess royalty, and ORRI) expresses as a percentage, e.g. 100% less 18.75%. (Royalty) less 1.25% (ORRI) = 80% NRI.

Front 79

Net Working Interest

Back 79

A working interest owner's gross working interest in production, less the related royalty, overriding royalty, production payment, and net profits interests.

Front 80

"Nodding Donkey"

Back 80

The slang term employed to describe the pump jack on top of an oil well.

Front 81

Non-Consent

Back 81

An affirmative election by a working interest owner not to participate with his/her working interest in the drilling of a well. Under a JOA, the working interest owner will have 100% of his/her interest returned/re-instated/come back in after 400% payout on the well (4 times).

Front 82

Non-Participating Royalty Interests

Back 82

A royalty interest which shares in any oil or gas found but does not share in lease bonuses or rentals.

Front 83

NYMEX

Back 83

The New York Mercantile Exchange

Front 84

Oil

Back 84

Crude petroleum oil and other hydrocarbons regardless of gravity which are produced at the wellhead in liquid form and distillate or condensate recovered or extracted from gas, other than gas produced in association with oil and commonly known as casinghead gas.

Front 85

Operator

Back 85

The company responsible for the drilling of wells for oil and gas. In Oklahoma, many times referred to as the Unit Operator. (A working interest owner).

Front 86

Operator's Lien

Back 86

A charge, security, or encumbrance placed by the operator on an individual or company's interest for the failure to pay for well expenses incurred by the Operator on a well in which the non-operator agreed or elected to participate.

Front 87

Oral Argument Before the Commission en Banc

Back 87

Not a matter or right, but may be requested within the appeal to the initial Report of the Administrative Law Judge or by separate motion, by OCC rule.

Front 88

Over-Produced

Back 88

A condition where an owner in a well has produced more than his/her "fair share" of the production. Can occur when some parties fail to nominate their gas for sale and another owner sells the gas as his/her own by "picking up the non-nominated party's gas."

Front 89

Overriding Royalty Interest ("ORRI")

Back 89

A royalty interest carved out of the working interest, in excess of the royalty provided in the Oil and Gas Lease. A non-cost bearing interest usually assigned during an intervening Assignment, or rarely by the original Lessee.

Front 90

Paid-Up Lease

Back 90

An Oil and Gas Lease where rental payments are paid along with bonus upon execution of the OIl and Gas Lease.

Front 91

Part of Total Unit Production

Back 91

Usually a nine (9) decimal calculation that provides a party's share of every dollar produced out of the well.

Front 92

Permiability

Back 92

A measure of the resistance offered by rock to the movement of fluids or gas through it. Measured in millidarcies.

Front 93

Pig Launcher

Back 93

A scraping device for cleaning and testing petroleum and natural gas pipelines or to separate different "through ports" in a pipeline.

Front 94

Pipeline

Back 94

A tube or system (usually steel) used for the transportation of oil or gas.

Front 95

Planimeter

Back 95

An exercise taken by an engineer where he/she measures along contour lines of geological mapping (net Isopach maps) with a planimeter to determine the gas in place through volumetrics.

Front 96

Plugging Bond

Back 96

Required by all operators of wells in Oklahoma through the OCC. It is a "surety" to cover the cost of plugging in the event the Operator fails to or is unable to have a well plugged.

Front 97

Pollution Docket (PD)

Back 97

The docket at the OCC where the pollution cases are filed in which pollution is alleged to have occurred.

Front 98

Pooling (Compulsory or Forced)

Back 98

An action filed at the OCC whereby non-committed parties (mineral interest and working interest owners) are brought into the action before an Administrative Law Judge where the Fair Market Value of leasing is determined and the parties being force-pooled are given options as to their participation or bonuses and royalty. This action promotes the development of the drilling and spacing unit(s). This action also names a unit operator and establishes the rights and obligations of the parties.

Front 99

Porosity

Back 99

The relative volume of the pore spaces between mineral grains as compared to the total rock volume.

Front 100

Post-Production Cost

Back 100

An expense associated with making the gas marketable after the gas is severed or removed from the formation.

Front 101

Pounds per Square Inch ("PSI")

Back 101

The pressure in a pipeline reflected or measured in pounds per square inch.

Front 102

Prehearing Conference Agreement (PHCA)

Back 102

An agreement at the OCC that is executed by all parties to a protested case an which sets out the "issues" to be tried, the date of the trial, and the date of the exhibit/witness list exchange by counsel.

Front 103

Primary Recovery

Back 103

The period of production in which oil moves from its reservoir through the wellbore under naturally occurring reservoir pressure.

Front 104

Primary Term

Back 104

The initial period of time typically expressed in years in an oil and gas lease in which the lessee may explore for and develop the minerals.

Front 105

Produce to Earn

Back 105

A term used in oil and gas agreement. This is a situation where one party (Party "A") owns leasehold and agrees to convey to another party (Party "B") Party A's leasehold interest in the well bore if Party "B" drills a well and the well is productive (not a dry hole). Party "B" thereby "earns" the leasehold acreage of Party "A" who will then and only then assign Party A's interest in the wellbore to Party "B".

Front 106

Production Payment

Back 106

Another name for an oil or gas payment to paid out of a well or wells revenue stream. Production payment is a broader term. A payment reserved typically in an assignment of working interest that will be paid out of production from the granting party's working interest.

Front 107

Production Plat

Back 107

A plat prepared that shows all of the wells drilled in a specified area (typically a non section plat) whether drilled to a completion as a producing well or as a dry hole. Most wells shown as productive on a production plat are color coded to indicate which common source of supply the well is producing from.

Front 108

"Protest"

Back 108

A term used to denote a respondent/party's objection to the relief requested at the OCC on the initial hearing docket. May also denote a contested hearing at the OCC.

Front 109

Proved Developed Reserves

Back 109

Reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.

Front 110

Proved Reserves

Back 110

The estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, i.e., prices and costs as of the date the estimate is made. Prices include consideration of changes in existing prices provided only by contractual arrangements, but not on escalations based upon future conditions.

Front 111

Proved Undeveloped Reserves

Back 111

Reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recompilation.

Front 112

Pugh Clause

Back 112

A clause added to an Oil Lease to limit holding non-producing lands or depths beyond the primary term of lease in specified acreage. Oklahoma has a statutory Pugh clause.

Front 113

Quit Claim Deed ("QCD")

Back 113

A deed where the grantor conveys all the interest he or she owns, but makes no warranty as to what is being conveyed. A buyer beware situation (caveat emptor).

Front 114

Remediation

Back 114

A process or application whereby perceived of or complained of violations of OCC Rules or environmental issues are dealt with, to clean up or eliminate the "problem."

Front 115

Report of the Appellate Referee

Back 115

The Report issued after oral argument before the Appellate Referee by counsel and after an appeal is filed to the Initial Report of the Administrative Law Judge based on the hearing on the merits.

Front 116

Reservation of Minerals

Back 116

Typically seen in a conveyance (Warranty Deed/QCD) where the minerals are retained/remain with the party making the conveyance. Many times occurs when the surface rights are sold and the minerals are reserved and excepted from the conveyance. Sometimes seen in a mineral conveyance when only part of the ownership of the minerals is transferred.

Front 117

Right of Way ("ROW")

Back 117

A form of an easement granted by the property owner that gives the right to travel over his/her land; to place a pipeline over/across/under his/her land, or to have ingress and egress across the property. These principles had their origin in traditional common law which governed, for example, the free flow of water or allowed neighboring landowners to travel over another's property (an informal "road system").

Front 118

Sand

Back 118

Geological term for a formation beneath the surface of the earth from which hydrocarbons are produced. Its make-up is sufficiently homogenous to differentiate it from other formations.

Front 119

Salt Water Disposal Well

Back 119

A well where produced salt water, produced out of an oil and/or gas well is properly disposed of into an existing wellbore on the lease.

Front 120

Schematic (Well)

Back 120

This is a diagram that shows the configuration of the well bore as to the wellhead, surface casing, casing, tubing, etc.

Front 121

Secondary Recovery

Back 121

Broadly defined, this term includes all methods of oil extraction in which energy sources extrinsic to the reservoir are utilized in the extraction.

Front 122

Seismic Line

Back 122

A geophysical company lays out geophones across the surface of land to measure the reflections from the fibrosis (used to be dynamite).

Front 123

Set Back

Back 123

A distance typically prescribed by statute whereby a well cannot be drilled closer than 300 feet from a structure (home) or where no building can be built closer than 50 feet from a pipeline. The set back is the distance between the two objects. Can also refer to the distance from the drilling and spacing unit boundaries that a well may not be drilled closer to without a location exception.

Front 124

Shut In Gas Royalty

Back 124

Payment to royalty owners under the terms of a mineral lease which allows the lessee to defer production from a well capable of producing in paying quantities, but is shut-in for lack of a market or marketing facilities.

Front 125

Stand-up Spacing Unit

Back 125

A term used to denote a spacing unit which length north and south is greater than the length east and west, i.e. E/2 and W/2 of a section and E/2 NE/4 and W/2 NE/4 of a quarter section.

Front 126

Spacing

Back 126

A uniform size and shape of an area created at the OCC where it is determined one well will economically and efficiently drain the unit sought to be spaced, whether oil or gas.

Front 127

Structure Map

Back 127

A plat showing the structure contour lines in an area of interest (typically a non section plat) as to a common source of supply.

Front 128

Subordination Agreement

Back 128

An agreement from a lender (bank/savings and loan) subordinating their prior lien to an oil and gas lease.

Front 129

Surface Damages

Back 129

Damages that may result from oil and gas operations and specifically addressed by the Oklahoma legislature in the Oklahoma Surface Damage Act.

Front 130

Survey

Back 130

A land survey which determines the location of well or can set out the different legal descriptions. A survey can be particularly useful with metes and bounds descriptions.

Front 131

Tank Battery

Back 131

A collection of tanks for oil and sometimes water on the surface associated with one or more wellbores in a unit.

Front 132

Tertiary Recovery

Back 132

Enhanced recovery methods for the production of crude oil or natural gas, typically using chemicals or energy injection including carbon dioxide.

Front 133

Top Lease

Back 133

A lease granted by a landowner during the primary term of a recorded oil and gas lease which is to become effective, if and when eh existing lease express or is terminated. The top lease must refer to the oil and gas lease currently in its primary term or the top lease may create a "slander of title" situation where the law provides for treble damages.

Front 134

Transportation Cost

Back 134

A cost to "carry" or transport gas through a pipeline or gathering system usually as a dollar amount mer mcf.

Front 135

Underground Gas Storage

Back 135

Storage of gas in a subsurface stratum or formation of the earth in the void pore spaces of a depleted reservoir or in a salt cavern.

Front 136

Under-Produced

Back 136

A condition where an owner in a well has produced less than his/her fair share of the production. Can occur when a party fails to nominate his/her gas for a month and another owner in the well sells the non-nominating party's gas.

Front 137

Unit Boundary

Back 137

The legal description of a drilling and spacing unit. i.e. the Section lines in a 640 acre unit; the quarter section lines in a 160 acre unit (e.g. the boundaries of the NE/4).

Front 138

Unit Operator

Back 138

The Operator named in a Pooling at the OCC or designated as the party authorized to drill a location exception or increased density well at the OCC as to the Unit (the size of the drilling and spacing unit for the common sources of supply). Under a JOA, the party named to be responsible for drilling all wells drilled in an agreed to area as reflected in the JOA.

Front 139

Vertical Severence

Back 139

An assignment of working interest from one depth to another, which is less than all of a working interest owner's interest as to all depths.

Front 140

Vertical Spacing

Back 140

The spacing unit for the drilling of a vertical well as opposed to a horizontal well.

Front 141

Vertical Well

Back 141

A well drilled vertically as opposed to horizontally. This is how most wells are drilled in Oklahoma, outside of the "Woodford Shale" wells currently being drilled in southern Oklahoma and some NW of OKC.

Front 142

Warranty Deed ("WD")

Back 142

A deed of conveyance where the grantor (seller) guarantees that he/she holds clear title to a piece of real estate and has a right to sell it to the grantee (buyer). The guarantee is not limited to the time the grantor owned the property - it extends back to the property's origins that contains a warranty clause from the Grantor. This means the Grantor warrants his/her title to the land being conveyed and agrees to defend that title should the grantee's title ever be questioned.

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Wet Gas - Liquids

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Natural gas containing liquid hydrocarbons in solution which may be removed by a reduction of temperature and pressure or by a relatively simply extraction process.

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Working Interest ("WI")

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The right granted to the lessee of a mineral interest to explore for and to produce and reduce to possession oil, gas, or other minerals. The working interest owners bear the cost of exploration, development, and operating.

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WTI Cushing Spot Price

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The price of West Texas Intermediate grade crude oil, in dollars per barrel, in transactions for immediate delivery at Cushing, OK.

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Zone

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A layer of rock which has distinct characteristics that differ from nearby rock.

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Royalty Interest ("RI")

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The mineral owner's share of revenue received from the production of oil or gas, many times free of costs, except taxes.