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A
Abandon
To stop work on a well, either temporarily or permanently, typically when it’s no longer productive, too expensive to operate, or for safety reasons.
American Petroleum Institute (API)
A major U.S. organization that sets technical standards and safety practices for oil and gas operations.
Assignee
An individual or company receiving rights to an oil or gas lease from another party.
Assignment
A legal transfer of lease rights from one party to another.
Assignor
The party who grants or transfers lease rights.
Authorization for Expenditure (AFE)
A forecasted budget of costs for drilling and completing a well, requiring approval from interested parties before work begins.
B
Behind Pipe
Zones in a well that are sealed off behind casing because only the deepest productive zone is completed.
Blowout
An uncontrolled escape of oil or gas from a well, usually due to pressure exceeding control limits.
Blowout Preventers (BOPs)
Heavy-duty valves installed on wellheads to stop uncontrolled flow during emergencies.
Borehole
The drilled hole in the ground to reach oil or gas reservoirs.
Bottomhole
The deepest part of a drilled well.
Brine
Water with a high salt concentration, often encountered underground during drilling or production.
BTU (British Thermal Unit)
A measure of heat energy; the amount required to raise one pound of water by one degree Fahrenheit.
C
Casing
Steel pipes installed inside a wellbore to keep the hole stable and isolate different underground layers.
Cementing
Pumping cement around casing to secure it in place and prevent fluid movement between formations.
Check Stub
A report detailing production volumes, prices, and payments for a well, often sent to royalty owners.
CNG (Compressed Natural Gas)
Natural gas compressed to reduce volume for easier storage and transport.
Completion
Preparing a drilled well for production, which can include installing tubing and perforating casing.
Conveyance
The legal transfer of ownership or rights, such as mineral or lease rights.
Crude Oil
Unrefined liquid hydrocarbons as they come from the ground, varying in color and composition.
D
Daily Drilling Report
A daily summary of drilling activities sent to operators and partners.
Dampener
A device used to reduce pressure fluctuations in mud pump output lines.
Deed
A legal document transferring ownership of property from one party to another.
Depletion
The gradual reduction of a resource’s quantity as it is produced.
Depreciation Allowance
A tax deduction reflecting the loss in value of equipment or property used in oil and gas operations.
Division Order
A document specifying ownership percentages of a well and directing payment distribution.
DOE (Department of Energy)
A U.S. government agency responsible for energy policies and regulation.
E
Engine
A machine that converts fuel into mechanical power, used to operate drilling or production equipment.
Erosion
The wearing away of earth or rock by natural forces like wind or water.
EUR (Expected Ultimate Recovery)
An estimate of the total volume of oil or gas expected to be produced from a well or field over its lifetime.
F
Farmout Agreement
An arrangement where a lease owner transfers some drilling and development responsibilities to another party in exchange for work commitments.
Fastline
The end of the drilling cable connected to the drum, moving faster than other parts.
Flow
The movement of fluids or gases through a well or pipeline.
Fluorescence
The glow emitted by drill cuttings under ultraviolet light, used to detect hydrocarbons.
Fracturing
A technique to enhance production by injecting fluid at high pressure to create cracks in the rock.
Futures Prices
Oil and gas prices agreed upon in advance for future delivery, set via commodity exchanges.
G
Gasket
A sealing material placed between two surfaces to prevent leaks.
Grantor
The person or entity transferring rights or property.
H
Hang Rods
Temporarily suspending sucker rods vertically in a rig or mast during maintenance.
Horizontal Drilling
A drilling method where the wellbore is steered horizontally within the reservoir to improve production.
I
Impeller
A rotating blade set in a pump that moves fluids or gases.
Intangible Drilling Costs (IDC)
Expenses related to drilling that have no salvage value, such as labor and fuel, often tax-deductible.
J
Jar
A downhole tool that delivers impacts to free stuck drill pipe.
Joint Interest Billing (JIB)
An itemized bill sent to partners detailing their share of operating expenses.
Joint Operating Agreement
A contract between parties outlining responsibilities and cost-sharing for lease development.
K
Kelly
A heavy steel piece that transfers rotary motion from the rig to the drill string.
L
Land Owner
A person who owns surface land and possibly mineral rights beneath.
Landman
A professional who negotiates mineral leases and agreements with landowners.
Lease (Oil and Gas)
A contract granting rights to explore and produce hydrocarbons for a set time.
Lessee
The party receiving rights via a lease.
Lessor
The party granting rights in a lease.
M
Management Fee
A charge paid for managing an oil and gas investment.
Mandrel
A shaft or bar around which other components fit.
Mast
A portable derrick structure that can be raised or lowered as one unit.
Methane Gas
A simple hydrocarbon (CH₄), the main component of natural gas.
Mineral Owner
An individual or entity owning mineral rights beneath the surface.
N
Natural Gas
A mixture of hydrocarbons, mostly methane, found underground and sometimes dissolved in oil.
Natural Gas Reserves
Estimated quantities of gas that can be economically recovered.
Natural Gas Resources
Known deposits of gas that have not yet been produced.
Net Revenue Interest
The portion of production revenue an owner receives after costs and royalties.
O
Oil Gravity
A measurement of oil density, reported in API degrees.
Oil, Gas, Mineral Lease
A contract that defines terms, including royalties and lease duration, for hydrocarbon exploration and production.
Operating Expenses
Costs incurred to run a producing well.
Operating Interest
An ownership share where the party also operates the well.
Operator
The entity responsible for daily management of a well.
Overriding Royalty Interest (ORRI)
A royalty carved from the working interest, free from operating costs.
P
Packer
Downhole equipment that seals the space between tubing and casing.
Permeability
The ability of rock to allow fluids to flow through its pores.
Porosity
The percentage of a rock’s volume made up of open spaces capable of holding fluids.
Primary Term
The initial period of a lease during which development must start.
Private Placement Memorandum (PPM)
A document describing terms for private investment offerings.
R
Reserves
The estimated quantity of oil or gas available for production.
Royalty Interest
A share of production revenue owed to mineral owners, free of production costs.
S
Safety Clamp
A device used to hold drill collars securely in place.
Salt Water Disposal Well
A well used to inject salty water back into underground formations.
Severance Tax
A tax applied to extracted oil or gas.
Shut-In
A well capable of producing but temporarily closed.
Spacing Unit
A land area assigned to a single producing well in a reservoir.
Spot Market
The buying or selling of oil and gas for immediate delivery.
Surface Owner
A person who owns the surface land but not the minerals beneath.
Surface Rights
Rights to use the land surface, separate from mineral rights.
T
Tag Line
A rope used to steady and guide loads during crane operations.
Tally
Measuring and recording the length of pipe or tubular goods run into a well.
Tar Sands
Sedimentary rock containing thick hydrocarbons requiring special extraction techniques.
V
Viscosity
A measure of a fluid’s resistance to flow.
W
West Texas Intermediate (WTI)
A grade of light, sweet crude oil from West Texas used as a benchmark price.