The sale or disposition of real estate or personal property (relinquished property) and the acquisition of like-kind qualified use real estate or personal property (replacement property) in a transaction structured as a tax-deferred, like-kind exchange pursuant to Section 1031 of the Internal Revenue Code and Section 1.1031 of the Treasury Regulations. The purpose of a 1031 exchange is to defer Federal, and in most cases state, depreciation recapture and capital gain income tax liabilities.
These figures are tabulated for a 24 hour production test. These test figures should not be relied upon as a sustainable daily production rate for a well.
The U.S. Securities and Exchange Commission defines Accredited Investors as follows. Under the Securities Act of 1933, a company that offers or sells its securities must register the securities with the SEC or find an exemption from the registration requirements. The Act provides companies with a number of exemptions. For some of the exemptions, such as rules 505 and 506 of Regulation D, a company may sell its securities to what are known as “accredited investors.” The federal securities laws define the term accredited investor in Rule 501 of Regulation D as: 1. a bank, insurance company, registered investment company, business development company, or small business investment company; 2. an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million; 3. a charitable organization, corporation, or partnership with assets exceeding $5 million; 4. a director, executive officer, or general partner of the company selling the securities; 5. a business in which all the equity owners are accredited investors; 6. a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person; 7. a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or 8. a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.
A technique for increasing the flow of oil from a well by the use of acid pumped down the hole and into the rock formation. The acid dissolves some of the rock enlarging the cracks and fissures near the well bore allowing more oil to flow.
A unit of measurement applied to petroleum reservoirs; an acre of producing sand one foot thick.
Active income is income earned as a direct result of a specific effort. In other words, input is correlated to output.
An alternative investment refers to any investment which does not qualify as “traditional”. Traditional investments are widely considered to be stocks, bonds and cash.
A subsurface geological structure in the form of an elongated dome. Historically this type formation has been found favorable to the accumulation of oil or gas.
A document used to estimate the cost of drilling a well or installing major equipment facilities in an oil field. The AFE is submitted to management and/or industry partners in the activity for their authorization and approval of the expenditure. The AFE is a budgetary device; when the project is complete, the operator collects invoices of actual work done and compares it to the AFE, should the project come in under budget, he refunds the balance. If the project has cost overruns, the operator submits additional invoices to the participants.
42 U.S. gallons of oil at 60 degrees Fahrenheit.
Igneous or metamorphic rock lying below the sedimentary formations in the earth’s crust. Basement rock does not contain petroleum deposits.
A synclinal structure in the subsurface, once the bed of a prehistoric sea. Basins, composed of sedimentary rock, are regarded as good prospects for oil exploration.
One billion cubic feet of natural gas at atmospheric pressure.
Removing the bit from the hole and running it in again. This requires that all of the drill pipe in the hole be pulled up. This pipe is stacked vertically in the derrick, see STAND above. Usually the bit is replaced with a new one once it is out of the hole.
Out-of-control gas or oil pressure erupting from a well.
A stack or an assembly of heavy-duty valves attached to the top of the casing to control well pressure.
Water, being heavier than oil, will collect in the bottom of tanks if water is being produced with the oil. This water will contain some sediment material produced out of the well. Periodically Bottom Sediment Water is collected and disposed of in an appropriate facility.
An expandable plug used in a well’s casing to isolate producing zones or to plug back to produce from a shallower formation; also to isolate a section of the bore hole to be filled with cement when a well is plugged.
The cost of participation in a prospect to drill a well. These costs include lease costs, any prospect fees paid to the geologist, seismic cost and sometimes a promotional fee to cover sales and marketing expense.
A term used by independent oil operators who are selling interests in a well they propose to drill. The operator offers to drill the well to casing point if the industry partners will “Carry” or pay his share of the cost. See ONE-THIRD FOR A QUARTER.
Steel pipe used in oil wells to seal off fluids from the bore hole and to prevent the walls of the hole from sloughing off or caving in.
To fix the casing firmly in the hole with cement, which is pumped through the drill pipe to the bottom of the casing and up into the annular space between the casing and the walls of the well bore. After the cement sets (hardens) it is drilled out of the casing. The casing is then perforated at the level of the zone of expected petroleum accumulation to allow oil and gas to enter the well bore.
A method whereby perforations, large cracks, and fissures in the wall of the bore hole are forced full of cement and sealed off.
An assembly of valves mounted on the casing through which the well is produced. The valves also allow testing of the well.
To pump drilling fluid into the bore hole through the drill pipe and back up the annulus between the pipe and the wall of the hole.
To finish a well so it is ready to produce oil or gas.
A well drilled to “prove” the formation or producing zone encountered by an exploratory or wildcat well.
A line (as on a map) connecting points on a land surface that have the same elevation above or below sea level.
A map showing land surface elevations by the use of contour lines. Structure contour maps are used by geoscientists to depict subsurface conditions or formations.
Production from oil and gas wells decline over time. Production can fluctuate for a number of reasons including reservoir pressures, depletion or down time for maintenance.
A provision in the tax law that exempts a certain percent of mineral production from income tax. This provision considers that oil and gas reserves are depleted over time when produced.
A well drilled to a known producing formation in an existing oil field.
A well bore which is off the vertical either by design or by accident.
The technique of drilling at an angle from the vertical by deflecting the drill bit.
An exploratory well which encounters production in a previously unknown deposit.
See SWD: A well used for the disposal of salt water. The salt water is pumped into a subsurface formation sealed off from other formations by impervious strata of rock.
A contract with a purchaser of oil and gas which directs the payments of oil and gas revenues to the interest owners of a well.
The drill pipe. In rotary drilling, the bit is attached to the drill stem or drill column which rotates to “dig” the hole.
A method of obtaining a sample of fluid from a formation using a “formation-tester tool” attached to the drill stem. The tool consists of a packer to isolate the section to be tested and a chamber to collect a sample of fluid. If the formation pressure is sufficient, fluid flows into the tester and up the drill pipe to the surface.
A special mixture of clay, water, and chemical additives pumped down hole through the drill pipe and drill bit. The mud cools the rapidly rotating drill bit; lubricates the drill pipe as it turns in the well bore; carries rock cuttings to the surface; and serves as plaster to prevent the wall of the bore hole from crumbling or collapsing. Drilling mud also provides the weight or hydrostatic head to prevent extraneous fluids to entering the well bore and to control down-hole pressures that might be encountered.
The cost of drilling the well; also known as DRILLING COST. Completion costs are in addition to drilling costs but only come due if the well locates producible oil or gas.
The reduction in value of a diminishing asset due to removal or production of the asset (minerals).
A heavy, hinged clamp in the derrick that is attached to the hook and traveling block by bail-like arms. The elevators are used for lifting drill pipe, casing, and tubing and lowering them into the hole. In hoisting a joint of drill pipe, the elevators are latched onto the pipe just below the tool joint (coupling), which prevents the pipe from slipping through the elevators.
Sophisticated recovery methods for crude oil which go beyond the conventional secondary recovery methods of pressure maintenance and water flooding.
An arrangement whereby one oil operator “buys in” or acquires an interest in a lease or concession owned by another operator on which oil or gas has been discovered or is being produced.
The name applied to a leasehold held under a farm-out agreement.
A form of agreement between oil operators whereby the owner of a lease who is not interested in drilling at the time agrees to assign the lease or a portion of it to another operator who wishes to drill the acreage. The seller may or may not retain an interest (Royalty or production payment) in the production.
A fracture in the earth’s crust accompanied by a shifting of one side of the fracture with respect to the other side
Oil-field slang meaning to finish the job. Derived from work with pipe having flanges (rims) on the ends; this pipe is bolted together at those flanges; the pipe can carry liquids once it is “Flanged Up.”
The static pressure in the casing when the well is flowing into delivery lines.
The static pressure in the tubing when the well is flowing into delivery lines.
A sedimentary bed or series of beds sufficiently alike or distinctive to form an identifiable geologic unit.
see Hydraulic Fracturing
Pressure from down hole in excess of that exerted by the weight of the drilling mud, causing loss of circulation. If the gas pressure is not controlled by increasing the mud weight, a kick can violently expel the column of drilling mud resulting in a Blow-Out.
Drilling mud aerated or charged with gas from formations down hole. The gas forms bubbles in the drilling fluid. Gas-cut mud may indicate commercial quantities of gas present in the formation.
Layers of sedimentary rocks which have been displaced from their normal horizontal position by the forces of nature into folds, fractures and faults. Geological structures are the logical places to find accumulations of oil and gas.
A person trained in the study of the earth’s crust. A petroleum geologist, in contrast to a hard-rock geologist, is primarily concerned with sedimentary rocks where most of the world’s oil and gas has been found.
A person trained in the study and application of certain physical principles – magnetic, electrical, gravity and the progression and velocity of sound waves – to the study of geology.
A tangible object of worth that is owned by a business or individual.
A method of stimulating production from a formation of low permeability by inducing fractures and fissures in the formation by applying high fluid-pressure to the face of the formation, forcing the strata apart.
The pressure at the face of the producing formation caused by the weight in pounds of the column of fluid in the hole. The hydrostatic pressure exerted by a column off fluid 5,000 feet high, for example, would be several thousand pounds. In a flowing well, the reservoir pressure must be sufficient to overcome the pressure of the hydrostatic head.
A person or corporation that produces oil for the market, having no pipeline system or refinery.
A person or corporation that participates in the development of petroleum resources. Industry Partners are knowledgeable in the industry and understand the risks involved in exploring for oil and gas. Industry Partners are sometimes referred to as investors.
Wells drilled to fill in between established producing wells on a lease to increase production from the lease. See Development Drilling.
Expenditures made by an operator for labor, fuel, repairs, hauling and supplies used in drilling and completing a well for production. Intangible drilling costs include also the construction of derricks, tanks, pipelines on the lease, buildings, and preparation of the drill site but does not include the cost of materials or equipment. A rule of thumb is: do the items for which expenditure were made have any salvage value? If not, they generally qualify under the tax laws as intangible drilling costs.
See Casing. There may be several strings of casing in a well, one inside another. The first casing put in a well is called Surface Pipe which is cemented into place and serves to shut out and protect shallow water formations and also as a foundation or anchor for all subsequent drilling activity. Extremely deep wells will often have an “intermediate string” cemented in place to protect and preserve the well bore as the remaining hole is drilled and completed.
In oil and gas investing, the Internal Rate of Return (IRR) is a metric used to evaluate the profitability of an investment over its lifetime and is represented as the average annual return percentage. The IRR of an investment can be calculated forward-looking to estimate potential future returns or backward looking to measure the performance of a completed investment.
While the Securities and Exchange Commission regulates public securities on a national level, each state also has its own regulatory entity serving a similar function. Since the passage of the JOBS Act, advocates of equity crowdfunding have moved to legalize intrastate – or in state – crowdfunding.
A person or corporation that invests money. See Industry Partner.
A mast-type derrick whose supporting legs are hinged at the base. When the rig is to be moved, it is lowered or laid down intact and transported by truck.
A length of pipe, casing, or tubing usually from 20 to 30 feet long. On a drilling rig, drill pipe and tubing are lowered into the hole the first time one joint at a time. When pulled from the hole and stacked in the rig, they are usually pulled two, three, or four at a time. These multiple-joint sections are called Stands.
The JOBS Act was a law passed in 2012 in the United States that eased regulations related to funding small businesses. Intended to increase American job creation and foster economic growth, the JOBS Act aims to provide easier access to public capital markets and small, growing companies.
The first and sturdiest joint of the drill column; a thick-walled, hollow steel forging with two flat sides and two rounded sides. When fitted into the square hole in the rotary table will rotate the kelly joint and thence the drill column and drill bit. Attached to the top of the kelly is the swivel and mud hose.
This is a flexible, steel-reinforced, rubber hose connecting the mud pump with the swivel and kelly joint on the drilling rig. Mud is pumped through the mud hose to the swivel and down through the kelly joint and drill pipe to the drill bit at the bottom of the hole.
A share of the gross production of the oil and gas on a property by the landowner without bearing any of the cost of producing the oil or gas.
A share of the gross production of the oil and gas on a property by the landowner without bearing any of the cost of producing the oil or gas.
To sell off a portion of one’s interest in a well to another person to reduce the financial loss should the well be non-commercial or dry. For example, an industry partner who has a 30 percent interest in a well to be drilled may “lay off” five or ten percent of his interest for cash he needs and/or to minimize his risk or to reduce his “exposed position.”
To pull the tubing from the well, a joint at a time, and remove it from the derrick floor to a nearby horizontal pipe rack. As each joint is unscrewed from the string, the lower end of the joint is placed on a low cart and pulled out to the rack as the driller lowers the pipe, which is held up by the elevators.
(1)The legal instrument by which a leasehold is created in minerals. A contract that, for a stipulated sum, conveys to an operator the right to drill for oil or gas. (2) The location of production activity; oil installations and facilities; location of oil field office, tool house, garages.
A person whose business is securing leases for later sale at a profit.
In respect to any period, all cash costs incurred in connection with the running and maintenance of production wells. Also referred to as Lease Operating Expense.
Liquidity refers to the ease with which an asset can be purchased or sold. Marketable securities that are traded in high volume tend to be the most liquid, or easy to trade without creating wild fluctuations in price.
The liquidity premium represents the incrementally higher price an investor is willing to pay for a more liquid asset or security, all other factors held equal. A rational investor will naturally prefer more liquidity, and therefore a more liquid investment will command a higher purchase price, translating to a lower yield. Due to the liquidity premium applied to publicly traded stocks and bonds, returns may be lower than their private alternatives.
A condition that exists when drilling mud pumped into the well through the drill pipe does not return to the surface. This serious condition results from the mud being lost in porous formations, a crevice or cavern penetrated by the drill bit.
Material that is added to the drilling mud when circulation is lost to assist in plugging the breached area of the well bore.
A low-producing well, a well with marginal returns.
One thousand cubic feet of natural gas at atmospheric pressure.
To grind up; to pulverize with a milling tool.
Refers to any interest in an oil or gas lease or other right authorizing the owner to explore for and produce minerals (oil and gas).
A geological term for rock strata that dip in one direction.
A special mixture of clay, water, and chemical additives pumped down hole through the drill pipe and drill bit. The mud cools the rapidly rotating drill bit; lubricates the drill pipe as it turns in the well bore; carries rock cuttings to the surface; and serves as plaster to prevent the wall of the bore hole from crumbling or collapsing. Drilling mud also provides the weight or hydrostatic pressure to the head to prevent extraneous fluids to entering the well bore and to control down-hole pressures that might be encountered. See Drilling Mud and Blow Out.
A progressive analysis of the well-bore cuttings washed up from the bore hole by the drilling mud. Rock chips are retrieved and examined by the geologist. Modern drilling operations include an electronic evaluation of the mud itself that indicates the presence of hydrocarbons in the mud along with the analysis of the well-bore cuttings.
See Reserve Pit. Excavations near the rig into which drilling mud is circulated. Mud pumps withdraw the mud from one end of the pit as the circulated mud, bearing rock chips from the bore hole, flows in at the other end. As the mud moves toward the suction line, the cuttings drop out leaving “clean” mud ready for another drip down the well bore.
That percent of the production revenue allocated to the working interest after first deducting proceeds allocated to royalty and overriding interest.
The working-interest owner or owners other than the one designated as the operator of the property and Industry Partners.
A well drilled on the adjacent location to the original well.
The most widely used indicator of a crude oil's value or worth to the producer is its API gravity. Normally, the price which a producer receives for his oil depends on its gravity, the less dense oils (higher API gravity) being the most valuable. This price schedule is based on the premise that the lighter oil contains higher percentages of the more valuable products such as gasoline.
A term used by independent oil operators who are selling interests in a well they propose to drill. An industry partner who agrees to the one-third for a quarter deal will pay one-third of the cost of the well to some point and receive one-fourth of the well’s net production. When the operator sells three of these one-third for a quarter interests, his industry partners will have paid the cost of drilling the well to casing point.
An uncased well bore; the section of the well bore below the casing; a well in which there is no protective string of pipe.
An interest in an oil and gas lease that bears the costs of development and operation of the property; the mineral interest less the royalty.
A person or entity engaged in the business of exercising direct responsibility and supervision over drilling, completion, operation, maintenance and production from an oil/gas well.
An interest in oil and gas produced at the surface free of any cost of production or royalty in addition to the usual landowner’s royalty.
An expanding plug used in a well to seal off certain sections of the tubing or casing when cementing, acidizing, or when a production formation is to be isolated. Packers are hung on the tubing or the casing and when in position can be expanded hydraulically or mechanically against the pipe wall or the wall of the well bore.
Passive income (also known as residual or recurring income) is commonly used to refer to income that continues to be earned even after the work is done.
When the costs of drilling, producing and operating have been recouped (cost recovery) from the sale of products on a well.
A method of computing the allowance for depletion of an oil or gas well, or other mining of minerals, for Federal income tax purposes.
To make holes through the casing opposite the producing formations to allow oil and gas to flow into the well.
A measure of the resistance of rock to the movement of fluids. Rocks may have holes or void spaces in them (porosity), but if these holes do not connect, the permeability can be drastically reduced. A measure of the relative volume of void space in rock to the total rock volume. These spaces or pores are where oil and gas accumulate; therefore, a formation containing a high percentage of porosity can contain more hydrocarbons.
The disappearance or “wedging out” of a porous, permeable formation between two layers of impervious rock.
To fill a well’s bore hole with cement or other impervious material to prevent the flow of water, gas or oil from one strata to another when a well is abandoned.
To fill a well’s bore hole with cement or other impervious material to prevent the flow of water, gas or oil from one strata to another when a well is abandoned.
The state or quality of being porous; the volume of the pore space expressed as a percentage of the total volume of the rock mass. An important property of oil-bearing formations. Good porosity indicates an ability to hold large amounts of oil in the rock. Porosity must be coupled with good permeability to allow the oil to flow to the well bore.
Oil and gas which has not been produced but has been located and is recoverable.
A truck-mounted mast equipped with winch, wire lines and sheaves, used for pulling rods and well service work.
An employee of an operator who is responsible for gauging the oil and gas sold off the leases he has been assigned and who is also responsible for maintaining and reporting the daily production.
An unrelated third party that administers the tax-deferred, like-kind exchange transaction in order to facilitate the disposition of the Investor's relinquished property and the acquisition of the Investor's like-kind replacement property. The Intermediary has no economic interest except for any compensation (exchange fee) it may receive for acting as an Intermediary in facilitating the exchange as defined in Section 1031 of the Internal Revenue Code. The Intermediary is technically referred to as the Qualified Intermediary, but is also known as the Facilitator or Intermediary.
A slanted hole drilled near the well’s bore hole to hold the Kelly joint when not in use. The kelly is unscrewed from the drill string and lowered into the rat hole as a pistol into a scabbard.
The process of completing a zone or zones that were bypassed during the original completion. Many reasons exist for originally bypassing a zone; one example would be that the original zone opened up was a high-pressure, high volume zone that would overpower other zones in the well. Once the high-pressure zone is depleted, the operator can then Re-Complete the well in the lower pressure zones that are typically up the hole, shallower in the well.
Also known as a Wash-Down. The process of re-entering a plugged and abandoned well to attempt to complete zones that were bypassed by the original operator. Many reasons exist for the original operator bypassing a zone; one example would be that when the original well was drilled gas pipelines were not present in the vicinity of the well where now they are, so the original operator did not open up known gas producing zones.
Regulation D permits raises of unlimited amounts from accredited investors without registering a public sale through the SEC, as it’s assumed that accredited investors are financially able to bear the burden of investment decisions without a review by the SEC.
See Mud Pit. An excavation connected to the working mud pits of a drilling well to hold excess or reserve drilling mud; a standby pit containing already-mixed drilling mud for use in an emergency when extra mud is needed.
a.k.a. Bottom Hole Pressure – The pressure at the face of the producing formation when the well is shut in. It is equal to the shut-in pressure (at the wellhead) plus the weight in pounds of the column of oil in the hole. The hydrostatic pressure exerted by a column of oil 5,000 feet high, for example, would be several thousand pounds. In a flowing well, the reservoir pressure would be sufficient to overcome the pressure of the hydrostatic head.
Any major operation performed on a well after its completion in an attempt to restore or improve its ability to produce.
A term meaning to disassemble or take apart after operations are complete. This term applies to any complex operation where multiple parts were assembled for an activity.
A term meaning to assemble or put together in preparation to go into operation. This term applies to any complex operation where multiple parts are assembled for an activity.
Pulling the drill pipe from the hole to change the bit and running the drill pipe and new bit back in the hole. On deep wells, round trips or “a trip” may take 24 hours, three 8-hour shifts.
A share of the minerals (oil and gas) produced from a property by the owner of the property. Originally, the right of the king to receive a percentage of the minerals taken from the mines of his realm (Silver, gold, salt, copper, etc). Entitles the owner to a share of gross proceeds which is free of expense of drilling, completion and production, but having no control over field activities.
In September 2013, the world of private investing became much more transparent. For 80 years before that, any company wanting to sell private securities was restricted to selling to their own network of family and friends. This limit existed mainly because of the ban on ‘general solicitation’ of a private security. One of the primary ways private companies raised funds was through Rule 506 of Regulation D.
2. Accredited Investors
A 506(c) offering can only be sold to Accredited Investors as defined by the SEC here.
As the world of private investing continues to develop, 506(c) is emerging as a much easier way to raise funds. Issuers can now advertise their deal, bring in the best investors and raise funds in a simpler and more cost effective way than ever before. Offerings filed under a 506(c) exemption have a lower cost of acquiring capital and can be funded faster by more experienced investors, leading to a streamlined and successful raise for issuers.
A record of the oil run from a lease tank into a connecting pipeline.
Many wells produce salt water while producing oil. The disposal of this water is a problem to an operator because of pollution. The best solution to the problem is to pump the waste back into a formation that is deep enough not to pollute shallow water sands. Many stripper wells which are no longer commercial are converted for this purpose.
Common terminology for oil-bearing sandstone formations.
A standard form of information about activities on a drilling location or well. The information includes dates, well’s depth, formations encountered, well logs and tests run. Completion information is briefly described as is the fate of the well, whether put in production or plugged.
A broad term encompassing any method of extracting oil from a reservoir after a well or field has exhausted its primary production.
An extensive area where substantial amounts of sediments occur. Most sedimentary basins are geologically depressed areas. The sediments are usually thickest in the middle, thinning toward the edges.
Rock formed by the laying down of matter by seas, streams, or lakes; sediment deposited in bodies of water through geologic ages. Limestone, sandstone and shale are sedimentary rocks.
The second phase of production in the producing life of a well. (also see "IP")
A tax levied by some states on each barrel of oil or each thousand cubic feet of gas produced.
Pressure as recorded at the wellhead when the valves are closed and the well is shut in.
Natural gas containing chemical impurities, notably hydrogen sulfide or other sulfur compounds that make it harmful to breathe even small amounts.
An individual or firm in charge of finding, acquiring, and managing an oil and gas development project.
To start the actual drilling of a well. The first section of the hole is drilled with a large-diameter spudding bit down several hundred feet to accommodate the surface pipe which may be 8 to 20 inches in diameter, depending upon the depth to which the well will ultimately be drilled. The surface pipe is cemented into this hole to protect the surface formations which might contain potable water.
A technique to seal off with cement a section of the well bore where a leak or incursion of water or gas occurs; forcing cement to the bottom of the casing and up the annular space between the casing and the wall of the bore hole to seal off a formation or plug a leak in the casing; a squeeze job.
When tubing is pulled from a well it will often be pulled in multiple joint lengths, often in three-joint lengths of up to ninety-feet. These multiple joints of tubing are called “Stands” and are stacked in the rig during the “trip”.
a.k.a. Offset Well – A well drilled adjacent to a proven well but located in an unproven area; a well located a “step out” from proven territory in an effort to determine the boundaries of a producing formation. See Development Drilling.
The technique of getting more production from a down hole formation. Stimulation may involve acidizing, hydraulic fracturing, shooting or simply cleaning out to get rid of and control sand.
A type of reservoir capable of holding oil or gas, formed by a change in the characteristics of the formation – loss of porosity and permeability, or a break in its continuity, the seal – which forms the, trap or reservoir.
The final state in the life of a producing well.
A fold or break (or both) in the earth\'s crust which creates an impervious trap for oil and gas. Oil will migrate underground through rock until it is "trapped".
Steel rods that are screwed together to form a “string” that connects the pump inside a well’s tubing down hole to the pumping jack on the surface.
Pipe which is set with cement through the shallow water sands to avoid polluting the water and keep the sand from caving in while drilling a well.
A tool which is lowered down the pipe on a wire line. The "swab" is then pulled out of the hole. As it travels up the pipe, rubber elements expand so that the fluid in the pipe is trapped above the swab and pushed to the surface. This operation is necessary when the formation pressure is not high enough to blow the fluids in the pipe to the surface.
A group of tanks at a well site used to store oil prior to sale to a pipeline company.
When each new well is competed, a series of tests are run on the well. The various tests are used to estimate the daily deliverability, payout, and reserves.
The Jumpstart Our Business Startups (JOBS) Act is a law intended to facilitate funding of small businesses by easing regulations.
A drilling well about which all information – depth, formations encountered, drilling rate, logs — is kept secret by the operator.
The act of pulling the drillstring out of the hole or replacing it in the hole. A pipe trip is usually done because the bit has dulled or has otherwise ceased to drill efficiently and must be replaced.
Small diameter pipe which is installed in the casing. Oil is produced through tubing because it increases the viscosity of fluid and a well\'s flow capabilities.
A contract in which an operator or drilling contractor agrees to furnish all labor and materials necessary to drill a well to a certain depth or stage of completion for a specified sum of money. The operator or contractor assumes all of the responsibility and risks involved in completing the operation.
Underwriting is the process by which oil and gas investments are evaluated to determine their viability.
The resistance of fluid to flow. A high viscosity fluid will not flow as easily as a low viscosity fluid (Mud will not move as easily as water).
Also known as a RE-ENTRY. The process of re-entering a plugged and abandoned well to attempt to complete zones that were bypassed by the original operator. Many reasons exist for the original operator bypassing a zone; one example would be that when the original well was drilled gas pipelines were not present in the vicinity of the well where now they are, so the original operator did not open up known gas producing zones.
An oil reservoir or field in which the primary natural energy for the production of oil is from edge, or bottom-water in the reservoir.
One method of secondary recovery in which water is injected into an oil reservoir to force additional oil out of the reservoir rock and into the well bores of producing wells.
The process of drilling for oil or natural gas in an unproven area, that has no concrete historic production records and has been unexplored as a site for potential oil and gas output. The most successful energy companies are the ones with a very high rate of drilling success, irrespective of whether the wells are drilled in known areas of production.
The operating interest entitling the holder, at his or its expense, to conduct drilling and production operations on the property and to receive the net revenues from such operations.
Operations on a producing well to restore or increase production. Tubing is pulled and the casing at the bottom of the well is pumped or washed free of sand that may have accumulated. In addition to washing out sand and silt that has clogged the face of the formation, a workover may also include an acid treatment, hydrofracing, or plugging off a depleted zone and opening a new zone for production.
A truck-mounted mast with winches, cables and sheaves capable of pulling tubing, as well as performing the other functions of a WORKOVER.