Category: Oil and Gas business

Downhole drilling tool

All of a company’s proved reserves, whether these have already been developed or not

An intra, or inter-facility transfer. For example, when one pipeline pumps crude oil or refined products from its tanks or mainline into the mainline or storage tank of the receiving pipeline

Direct and indirect costs incurred to identify areas of interest that may warrant detailed exploration. Such costs include those incurred for geological and geophysical studies; rights of access to properties in order to conduct such studies, salaries, equipment, instruments, and supplies for geologists, including geophysical crews, and others conducting such studies; and overhead that can be identified with those activities.

An area subdivision of the UKCS of 1 degree of longitude by 1 degree of latitude – typically around 6600 sq km. On the UKCS each Quadrant is further subdivided into 30 blocks.

Oil and gas reserves that can be produced at a level of probability as determined by SEC and by the Society of Petroleum Engineers and World Petroleum Council. See also proved reserves

Set of obligations or set of accepted standards that the lessee (operator) has towards the lessor (i.e. the state) or vis-?-vis his partners under an operating agreement. The main concept is that it requires that the operator act in a manner that would be perceived by the industry in a reasonable and prudent manner

 

Prospective resources are those deposits that are estimated, on a given date, to be potentially recoverable form undiscovered accumulations. Frequently, this may be in areas where geoscience and engineering data are unable to clearly define the area.

Undiscovered resources are those deposits that have not been pinpointed, but are generally expected to exist based on geologic conditions. The methodology for estimating undiscovered resources examines potential resources in mapped leads. In areas where detailed mapping has been carried out, mapped leads are analyzed by standard statistical techniques to obtain estimates of resources in each basin. Geological risk is assigned by play and also to each individual lead. For each geological basin, the risk factors are calibrated to drilling results. Estimates of undiscovered recoverable resources can be categorized as undiscovered technically recoverable resources (UTRR) and undiscovered economically recoverable resources (UERR).

Those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. Prospective resources are further subdivided in accordance with the level certainty associated with recoverable estimates assuming their discovery and development and may be subclassified based on project maturity.

There is no certainty that any portion of the resources will be discovered. If discovered there is no certainty that it will be commercially viable to produce any portion of the resources, but the remaining portion may never be recovered due to the physical/chemical constraints represented by subsurface interaction of fluids and reservoir rock.

SEE PROSPECT, LEAD, PLAY with prospect being the highest order of certainty and play the lowest

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” an O&G company can review proved oil and gas properties and other long-lived assets for impairment when events and circumstances indicate a decline in the recoverability of the carrying value of such properties, such as a downward revision of the reserve estimates or sustained decrease in commodity prices. The future cash flows expected in connection with the properties are estimated and compared with such future cash flows to the carrying amount of the properties to determine if the carrying amount is recoverable. When the carrying amounts of the properties exceed their estimated undiscounted future cash flows, the carrying amount of the properties is reduced to their estimated fair value. The factors used to determine fair value include, but are not limited to, estimates of proved reserves, available market data associated with the property or similar properties, future commodity prices and operating expenses, timing of future production, future capital expenditures and a risk-adjusted discount rate