Category: Oil and Gas business

O&G companies are required to keep a report of their oil and gas reserves, mostly focusing on the proven reserves (see proven reserves). The reserve report is for both internal company purposes as well as for the financial world, owners of contiguous territory and the general public. A key problem in structuring information about reserves is that relatively objective estimates of reservoir characteristics must be combined with subjective forecasts of project feasibility and commerciality, since for instance a proven reserve is only as it is nominated if the reserves can be brought to market economically. In its degree of disclosure of information the report should balance the requirement of shareholders to learn more about the underlying value of their investment against the requirement of the company to maintain a level of confidentiality to maintain its competitive edge (see also reserves disclosure)

Such as the residual capacity in an LNG gasification facility, after certain capacity has been allocated and/or booked

There are two main types of onshore drilling for natural gas. Rotary drilling consists of a sharp, rotating metal bit used to drill through the Earth’s crust. The drill bit is connected to and rotated by a drill stem, which also provides a passageway through which the drilling fluid (mud usually) is circulated. This type of drilling is used primarily for deeper wells that may be under high downhole pressure. The other method, percussion /cable tool drilling, consists of raising and dropping a heavy metal bit into the ground, effectively punching a hole down through the Earth.

The ratio of additions to reserves divided by production. It is a measure of the extent to which production is being replaced and is an important element of oil and gas companies’ portfolio.

Reserve changes from all sources divided by total production for a given time period.

A fault with vertical movement and an inclined fault plane. The block above the fault has moved upwards relative to the block below the fault

It is the new benchmark gasoline contract on the New York Mercantile Exchange. NYMEX phased out trading in unleaded gasoline futures at the end of 2006 because that product contained the chemical MTBE, which is banned in many states for polluting groundwater. NYMEX replaced those unleaded gas contracts with ones for the RBOB, an unfinished gasoline product that does not contain MTBE

Relative permeability is the ratio of effective permeability of a particular fluid at a particular saturation to absolute permeability of that fluid at total saturation. If a single fluid is present in a rock, its relative permeability is 1.0. Calculation of relative permeability allows for comparison of the different abilities of fluids to flow in the presence of each other, since the presence of more than one fluid generally inhibits flow. See also permeability

Recoverable resources are the subset of the total resource base that is thought to be technically recoverable; the technology exists to make its extraction possible. This subset is further divided into discovered and undiscovered resources. Discovered recoverable resources are those in a known location. That is, those reservoirs that geologists have actually located through exploration. Discovered recoverable resources include current production, all past production, as well as the gas that is remaining to be produced (known as ‘reserves’). Economically recoverable resources are those natural gas resources for which there are economic incentives for production; that is, the cost of extracting those resources is low enough to allow natural gas companies to generate an adequate financial return given current market conditions. However, it is important to note that economically unrecoverable resources may, at some time in the future, become recoverable, as soon as the technology to produce them becomes less expensive, or the characteristics of the natural gas market are such that companies can ensure a fair return on their investment by extracting this gas. Those resources that have been discovered, and for which a specific reservoir location is known, can further be broken down into those resources that are economically recoverable, and those that are economically unrecoverable. This differs from technically unrecoverable resources, in that the technology exists (or is foreseeable in the near future) to get economically unrecoverable resources from the ground, but the economics do not exist to make the production of this natural gas profitable. Those discovered, technically and economically recoverable resources are further broken down into different types of ‘reserves’. In general, reserves can be broken down into two main categories – proved reserves, and other reserves