Month: July 2009

License granted by the state to enable the license holder to produce hydrocarbons in his lease

An installation from which development wells are drilled and that carries all the associated processing plants and other equipment needed to maintain a field in production

Energy consumed in the production of each unit of oil and gas

Natural or induced production damage that can develop anywhere from the reservoir to the production pipelines. Natural damage occurs as produced reservoir fluids move through the reservoir. Induced damage is the result of fluids in the well and external operations, such as drilling, well completion, workover operations or stimulation treatment.

Costs incurred to operate and maintain wells and related equipment and facilities, including depreciation and applicable operating costs of support equipment and facilities and other costs of operating and maintaining those wells and related equipment and facilities. They become part of the cost of oil and gas produced, such as: costs of labor to operate the wells and related equipment and facilities; repair and maintenance costs; the costs of materials, supplies, and fuels consumed and services utilized in operating the wells and related equipment and facilities; the costs of property taxes and insurance applicable to proved properties and wells and related equipment and facilities; the costs of severance taxes; depreciation, depletion, and amortization (DD&A) of capitalized acquisition. Exploration, and development costs are not production costs, but also become part of the cost of oil and gas produced along with production (lifting) costs identified above. Production costs include the following subcategories of costs: well workers and maintenance; operating fluid injections and improved recovery programs; operating gas processing plants; ad valorem taxes; production or severance taxes; other, including overhead