Category: Oil and Gas business

A hydrocarbon fluid with a gravity of 10° API or lower

Water that is found in rocks and loose sediment beneath the surface. Water that exists below the water table in the zone of saturation. Ground water moves slowly in the same direction that the water table slopes

Companies may reach agreements with financial institutions to hedge a portion of their oil and gas production in order to provide them with downside protection should the price of oil and/or gas go below their credit facility comfort.

Some companies manage the risk of price fluctuations by hedging. When an oil producer hedges the price of his output, he essentially locks in a cash flow. If the price of his physical oil drops below the hedge, his net earnings increase, but if the physical price rises above the hedge, his net earnings decrease. Hedging ensures a certain rate of return and thus piece of mind for the producer. Oil hedging is an individual company’s decision. It depends on: short-term oil price projections; if the company is a supplier (hedging against bearish markets) or an end user (hedging against bullish markets); what percent of the company’s expenses or profit the oil represents; the company’s risk tolerance

A gusher is an oilwell that has come in with such great pressure that the oil jets out of the well like a geyser. A well that has blown out of control and from which oil, water, or gas is escaping with great force to the surface.

An uncapped oil well connected to a reservoir of petroleum oil that is under high pressure. The oil can shoot 200 feet (60 meters) or higher into the air. Sometimes the term refers to an especially rich well

Official written brief of the drilling and other activities carried out on a well

Located in Erath, LA, the Henry Hub is a pipeline interchange and the delivery point for the New York Mercantile Exchange (NYMEX) active natural gas futures contracts. Natural gas from the Gulf of Mexico moves through the Henry Hub onto interstate pipelines serving the Midwest and the Northeast. The Henry Hub is the largest centralized point for natural gas spot and futures trading in the United States

The Henry Hub is the largest centralized point for natural gas spot and futures trading in the United States. The New York Mercantile Exchange (NYMEX) uses the Henry Hub as the point of delivery for its natural gas futures contract. The NYMEX gas futures contract began trading on April 3, 1990. NYMEX deliveries at the Henry Hub are treated in the same way as cash-market transactions. Many natural gas marketers also use the Henry Hub as their physical contract delivery point or their price benchmark for spot trades of natural gas. Henry Hub spot and futures prices have become the surrogate for “real-time” wellhead natural gas prices.

A provision in an oil or gas lease that perpetuates a company’s right to operate a concession as long as the concession produces a minimum paying quantity of oil or gas.

Hoarding of capacity in LNG terminals by speculators is a known phenomena as well as the tendency by major energy companies to book for themselves capacity in a large number of regasification terminals in order to be able to direct their LNG shipments towards markets where spot prices are higher at any particular time. This prevents those entities that are interested to import LNG by use of the facility from doing so, since they do not own any of the available capacity. Anti-hoarding clauses are characterized by a considerable variety of specific provisions. They are mainly in the form of UIOLI with either an ex ante or an ex post effect. In an ex ante system, each slot that is not used by the capacity holder must be offered to the market. In an ex post system, the extent of unused slots is afterwards taken to indicate changes that need to be made for future capacity allocation: Should the terminal user that has reserved capacity on the terminal not use a certain amount of it for a certain period of time, the booked future capacity (or a part of it) will be lost

Sedimentary rock