Glossary

Abbreviations

bbls - barrels

bbls/d - barrels per day

bcf - billion cubic feet

bcf/d – billion cubic feet per day

boe - barrels of oil equivalent (6 mcf:1 bbl)

boe/d - barrels of oil equivalent per day

btu – British thermal unit

GJ - gigajoules

mbbls - thousand barrels

mboe – thousand barrels of oil equivalent

mcf - thousand cubic feet

mcf/d - thousand cubic feet per day

mmboe - million barrels of oil equivalent

mmcf - million cubic feet         

mmcf/d - million cubic feet per day

NGL - natural gas liquids

 

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

 

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.

Associated Gas
Gas that is produced from the same reservoir in association with crude oil, either as free gas or in solution.

B

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

C

Casing
A type of pipe that is used for encasing a smaller diameter carrier pipe for installation in a well. Casing is used to send off fluids from the hole or keep a hole from caving in.

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

Condensate
Liquids recovered during the production of natural gas, consisting primarily of pentane and heavier hydrocarbons.

Core
A continuous cylinder of rock, usually from five to 10 centimetres in diameter, cut from the bottom of a well-bore. Cores are cut during the drilling of a well and are used in the study of underground formations.

Crown Land
Mineral rights owned by the federal or provincial governments in Canada.

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.

E

F

Farmout
An arrangement whereby the owner of a lease assigns all or some portion of the lease or licences to another company for undertaking exploration or development activity.

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

Formation
A designated mapable sub-surface layer that is composed of substantially the same kind of rock or rock types.

Fracturing (or fracing)
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

Horizontal Drilling
Drilling a well that deviates from the vertical and travels horizontally through a prospective reservoir.

Hydraulic Fracturing
A controlled operation that pumps a fluid and a propping agent through the wellbore to the target formation at a high pressure in multiple intervals, or stages. A safe and proven way to develop natural gas, hydraulic fracturing has been used throughout the oil and natural gas industry for about 60 years. The fracturing fluids are designed to ensure effective fracturing of the target reservoir and recovery of fluids. The process breaks up the target formation, much like a stone fracturing a windshield, to create pathways that allow the gas to flow from the very low permeability reservoir toward the wellbore.

Hydrogen Sulphide (H2S)
A naturally occurring, highly toxic gas with the odour of rotten eggs, commonly found in association with natural gas.

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
A formal 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.

Light Crude Oil
Liquid petroleum characterized by low density that flows freely at room temperature.

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

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.

Multi-Zone Well Completion
Completion of a well such that production is obtained from several different formations.

N

Natural Gas
Underground deposits of gases consisting of 50 to 90 percent methane (CH4) and small amounts of heavier gaseous hydrocarbon compounds such as propane (C3H8) and butane (C4H10).

Natural Gas Liquids (NGLs)
Liquids obtained during production of natural gas, comprising ethane, propane, butane hexane and heptane.

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

  • Cash Flow Netback

The amount received from the sale of oil and natural gas after cash expenses are deducted. Deducted expenses include operating and transportation interest 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 and transportation interest costs have been deducted.

O

P

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 ability of a rock to transmit fluid through the pore spaces. – a key influence on the rate of flow, movement and drainage of the fluids.

Porosity
Volume of space within a rock that might contain hydrocarbons (like the amount of water a sponge can hold). Represents the open or void space within rock – usually expressed as a percentage of the total rock volume. Porosity measures the capacity of the rock to hold natural gas, crude oil or water.

Proppant
Small particles, typically sand, mixed with the hydraulic fracturing fluid to hold fractures open after a hydraulic fracturing treatment.

Q

R

Raw Natural Gas
A mixture containing methane plus all or some of the following: ethane, propane, butane, pentanes, condensates, nitrogen, carbon dioxide, hydrogen sulfide, helium, hydrogen, water vapour and minor impurities. Raw natural gas is the gas found naturally in the ground prior to processing. During processing, the volume decreases as impurities and liquids are removed.

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 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 oil and 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.

Shale
A sedimentary rock formed from the deposition of clay.

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.

Slick Water Fracturing
A stimulation process where a specially designed water and sand proppant solution is injected into a horizontal well under high pressure to enable the flow of trapped oil and raw natural gas through the fracture channels created.

Sour Gas
Raw natural gas with a relatively high concentration of sulfur compounds, such as hydrogen sulfide. All natural gas containing more than one percent hydrogen sulfide is considered sour.

Surface Casing
The first string of casing put into a well. Surface casing is cemented into bedrock and serves to shut out shallow water formations and as a foundation for well control during drilling operations.

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 natural gas or oil.

Wellhead
Equipment used to maintain surface control of a well.

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