Category: Oil and Gas business

Joining together of two or more acreages into one unit for drilling purposes

Unproved reserves which analysis of geological and engineering data suggests are less likely to be recoverable than probable reserves. When probabilistic methods are used, there should be at least a 10% probability (P10) that the quantities actually recovered will equal or exceed the amount of estimated reserves. Also often referred to as P3. Possible reserves may include: (1) reserves that based on geological interpretations could possibly exist beyond areas classified as probable; (2) reserves in formations that appear to be petroleum bearing but may not be productive at commercial rates; (3) incremental reserves attributed to infill drilling that are subject to technical uncertainty; (4) a project is planned but is not yet in operation or there is a reasonable doubt that it can be developed commercially, (5) reserves would appear to be structurally lower than the proved area

As per the MNI: Preliminary Permit, the owner of which may request a priority right which gives exclusive exploration rights on the area. A permit may be granted for a period not exceeding 18 months. A person desiring a preliminary permit for carrying out preliminary investigations, not including test drilling, in order to ascertain the prospects for discovering petroleum, shall apply therefore to the Commissioner; the Commissioner may, in respect of such area and on such conditions as he may think fit, grant him a permit or may refuse the application

Joining together of several small acreages for the joint development of wells

The price determined by the Seven Sisters (Exxon, Texaco, Mobil, Socal/Chevron, Gulf, Shell, BP) for each type of crude oil, during the first days of the oil industry in the US when each company posted the price of its oil on the pillar at the entrance of their company

A permit, as defined by the Israel Ministry of National Infrastructure, allows a company to conduct reconnaissance exploration effort prior to committing to a well during the License period. The priority rights conveys the exclusive right to the permit holder to convert to a drilling license (at the holder’s discretion), upon fulfillment of the required work program

The pressure of the fluid contained in the pore volume

Two British companies that conducted an LNG feasibility study for the Israeli Ministry of National Infrastructure in 2007

There are three elements essential for fluid extraction within a resource bearing reservoir. Porosity, Permeability, and Pressure are the necessary factors for removal of these resources, and must be present together in order for a well to be commercially viable. Porosity: The percentage of pore volume or void space; Permeability: The measurement of the ability to transmit fluids; Pressure: The pressure of fluids within the pores of a reservoir. Porosity is a rock’s ability to store fluids within it. Effective porosity is the volume containable through the interconnected pores, and is usually less than total porosity. Thus, porosity alone is not enough to ensure that fluids can move through a rock structure. These pores must be interconnected in order to have any chance of a predicable reservoir. Permeability, is a rock’s ability to move fluids. Permeability is directly related to a formation. Pressure is the amount of force a fluid exerts within the pores of a reservoir. Pressure within a reservoir changes over time, therefore it is necessary to define a reference, which in this case would be the Initial Pressure. To understand how these three necessities work together, we need only to look to the common sponge. A sponge, to be useful, must have good Porosity and Permeability. This is what gives a sponge the natural ability to store fluids. But how do we get the fluid out of the pores. In the instance of a sponge, this is easy, as any kind of pressure applied will cause the sponge to give up the fluids. Nature, aside from the sponge, is rarely so obliging when it comes to the recovery of natural resources. The oil and gas industry has come up with many ways to increase porosity and elevate reservoir pressure. The most common way to increase porosity is to fracture (frac) the targeted zone. This entails setting off a focused charge within the pipe, at a predetermined depth, in order to reach the zone targeted for production. This charge puts holes in the pipe, as well as breaks up the rock in the immediate area of the blast. These holes are used as an access point for a fracturing fluid to be injected into the zone. Different zones require different types of fluids and mixtures to be effective, most common are the acid salt mixtures. Injected with these mixtures is generally a large amount of water, at high pressures. This mixture and pressure combined is a highly effective means of increasing porosity. Increased porosity is only half the story. Without the necessary reservoir pressures, porosity becomes moot. One remedy for lower pressures are injection wells, that replace fluids as they are taken, or even moves fluids towards the producing well. The best solution for managing pressure within a well is to maintain the initial pressures as long as possible. For example, a can of spray paint can last for an extended period of time by stirring the paint and maintaining a proper spraying angle. The manufacturer sets the choke at the top of the can to moderate the rate of flow. Cut the top of the can off however, and what you have left is no pressure and a lot of paint that cannot be easily obtained for its intended use. A well has similar properties. An operator can open the bore completely, and produce at extremely high numbers for a short period of time. But to get the highest rate of return possible, managing Porosity, Permeability, and Pressure is key

The percentage of pore volume or pore space or that volume within a rock that can contain water or hydrocarbons