Category: Oil and Gas business

Un-booked reserves / resources are defined by many O&G companies as the best estimate of recoverable hydrocarbons where commercial and/or technical maturity are such that project sanction is not expected within the next three years.

Un-booked resources, which changed its name by SEC in 2009 to discovered resources, are defined as the best estimate of recoverable hydrocarbons where commercial and/or technical maturity are such that project sanction is not expected within the next three years

Storage is required in order to meet high seasonable demand for natural gas (i.e. during cold winter months in Europe and the US). Since the system works more efficiently with a constant flow throughout the year, gas is put into storage during lower summer demand periods to be used during peak times. Storage is also used for balancing purposes and/or in times of supply disruption. Gas can also be taken out of storage during peak consumption times, since heating demand for natural gas during winter puts upward pressure on natural gas prices. Natural gas is most commonly held in inventory underground under pressure in three types of facilities: (1) depleted reservoirs in oil and/or gas fields; (2) aquifers and; (3) salt cavern formations. Depleted oil and gas reservoirs are the most commonly used underground storage sites. Pipeline companies rely heavily on underground storage to facilitate load balancing and system supply management. Most storage facilities, such as the Rough Field in the UK are used more for seasonal trading purposes (store gas when it is cheap and sell it when it is more expensive during winter) as well as for technical reasons to maintain the continuous flow in the pipeline. In addition, the European national transmission system can fail during very cold winter days so the Rough Field is maintained to overcome daily shortfalls if such occur

Issues regarding sellers failure to deliver nominated quantities of gas. If underliveries were due to FM, then the buyer’s ToP obligation will be reduced by the amount of gas that the seller failed to deliver. If seller cannot claim FM, then the buyer can also impose sanctions for damages caused or demand that the under-delivery be classified as shortfall gas. Shorfall of gas is a seller’s default. If a natural gas seller, on a day, fails to provide the quantity of sales gas nominated by the Buyers and providing that the reason is not the fault of the Buyer or of the Sellers’ Force Majeure or Political Force Majeure effecting any Party, then the Buyer shall be entitled to a quantity of Sales Gas during the next [x] Years equal to the difference between the quantity of Sales Gas properly nominated by the Buyer (excluding for the avoidance of doubt Excess Gas) and the amount actually delivered by the Sellers (the Shortfall Quantity). The Shortfall Quantity will be supplied at a price equal to the prevailing price in the year in which it is supplied times [x%] (the Shortfall Price). Usually a buyer will want to give a seller no more than a 2% operating tolerance as the norm. A buyer should also try to get near to 80% of the Contract Price for the Shortfall Price.

Unit lifting costs per boe’ is calculated by excluding royalty, tariff and insurance costs from unit operating costs/expenditure

Removing fluid from the tubing in a well, often by means of a swab, to lower the bottomhole pressure in the wellbore at the perforations and induce the well to flow

Located up the slope of a dipping plane or surface. In a dipping (not flat-lying) hydrocarbon reservoir that contains gas, oil and water, the gas is updip, the gas-oil contact is downdip from the gas, and the oil-water contact is still farther downdip

Unit operating expenditure per boe is calculated by dividing production and other operating costs (royalties) by the net production for the period. This measure does not include the impact of depreciation and amortization costs and exploration costs as they are not considered to be costs associated with the operation of producing assets