Glossary
BackwardationAs a contract approaches expiration, the futures contract will trade at a higher price compared to when the contract was further away from expiration.
bblmmcfdBarrels per million cubic feet of gas
BCFbillion cubic feet (gas)
BIBABrokers, Investment Bankers, Analysts
Binary stock/tradeStock will move based on the success of one well
BitumenVery viscous (gooey) form of crude oil
BOEBarrels of oil equivalent.Takes roughly 6 mcfcompanies usually convert gas production into oil of gas to equal the amount of energy in one barrel of oil.
boedAcronym for barrels of oil equivalent per day
Bought deal financingWhen an investment bank or syndicate purchases securities from an issuer before a preliminary prospectus is filed. The investment bank acts as principal rather than agent and thus actually "goes long" in the security. The bank negotiates a price with the issuer (usually at a discount to the current market price, if applicable). The advantage of the bought deal from the issuer's perspective is that they do not have to worry about financing risk (the risk that the financing can only be done at a discount too steep to market price.)
Brent Crude OilA major trading classification of sweet light crude oil comprising Brent Blend, Forties Blend, Oseberg and Ekofisk crudes (also known as the BFOE Quotation). It's sourced from the North Sea & is the leading global price benchmark for Atlantic basin crude oils. It is used to price two thirds of the world's internationally traded crude oil supplies. Originally Brent Crude was produced from the Brent oilfield. The name "Brent" comes from the naming policy of Shell UK Exploration and Production, operating on behalf of ExxonMobil and Royal Dutch Shell, which originally named all of its fields after birds (in this case the Brent Goose).
Broad ShelfShale play that lies nice and flat
C5Also known as condensate (gets the same price as oil)
Cap rockFormation that prevents the upward migration of oil and gas. Also called a "trap"
CapexCapital expenditures; drilling mone
Channel sandA sand or a sandstone deposited in a stream bed, or some other channel eroded into the underlying rock; it frequently contains oil, gold, or other valuable minerals.
Charged formation oilA lot of pressure in the formation which may not require fracking
CondensateAlso known as C5Also known as condensate (gets the same price as oil) (gets the same price as oil)
ContangoFutures price (higher due to storage cost and uncertainty) is higher than the spot price
CorrectionMarket pullbacks X to Y %
Data to determine how to frackHow much pressure, do you use water or oil or propane, what direction do you drill, what chemistry do you use etc.
Directional servicesCompanies that specialize in angle or horizontal drilling
Drill shipsLook like tankers/ships, but they travel the oceans in search of oil in extremely deep water
Dry holeWell is not commerically viable
EBITDAAcronym for earnings before interest, taxes, depreciation, and ammortization. EBITDA is a non-GAAP metric that is measured exactly as stated
Estimated Ultimate RecoveryA guess at how much the well would produce over time
FD&AFinding, Development and Amortization
FDCFuture Development Costs
Foam fracking
Frack barriersRock types that are really hard and would likely halt any fracturing (Important because it means that water will not likely be able to come into the well)
FSRUFloating Storage and Regasification Unit
Full Cycle CostsIncludes Finding, Development and Amortization & Future Development Costs
Heavy crude oilOil that is thick like tar
IP RateInitial Production Rates i.e. IP30 is the average flow for the first month
IRRInternal Rate of Return (IRR). It and Net Present Value (NPV) are the two most commonly used investment analysis methods in the oil & gas industry.
Jack-upsRig has three legs and a triangle platform which is jacked-up above the highest anticipated wave
Light crude oilOil that flows like water
Light oilAn oil of low specific gravity or relatively low boiling point (as below about 200° C)
Long tail of its productionThe point at which the well only declines 10-20% a year
Low permeabilityPockets are not connected
mbbl1000 barrels
mcfcompanies usually convert gas production into oil
mcfeGas equivalency. Used to convert oil quantity into gas quantity.
MDAManagement Discussion & Analysis (referring to a public company's financial statements)
Minimal reliefPocket lies nice and flat
mmbblMillion barrels
mmbtumillion British Thermal Units (mcfcompanies usually convert gas production into oil = 1 mmbtu)
mmcfequivalent production using an energy equivalent basis
Multiple horizons or formationsTo have oil/gas pockets stacked one on top of each other
NetbackSee Recycle Ratio
NGLNatural Gas Liquids. Components of natural gas that are liquid at surface in field facilities or in gas-processing plants.
Non-operating minority interestA mineral lease interest that does not involve the rights and responsibilities of exploration, development, or production. A royalty interest is a non-operating interest.
NPVNet Present Value
Oil or reservoir has energyIt’s over-pressured
Oil WindowA depth where the right temperature and pressure allow the ancient organic matter to turn into oil—gas is below oil
Oil/Gas windowThe oil windowA depth where the right temperature and pressure allow the ancient organic matter to turn into oil—gas is below oil is a temperature dependant interval in the subsurface where oil is generated and expelled from the source rocks. The oil windowA depth where the right temperature and pressure allow the ancient organic matter to turn into oil—gas is below oil is often found in the 60-120 degree Celsius interval (aprox. 2-4 km depth), while the corresponding gas window is found in the 100-200+ degree Celsius interval (3-6 km depth).
OOIPOil Originally In Place
Organic rich shale> "X" % of Total Organic Content (TOC)
P50The best estimate of hydrocarbons in place
PayzoneProductive oil formation
Potential valuationPotential determination of the economic value of an asset
Price per flowing barrelA metric used to determine the value of an oil and gas company. Equation: [Market Cap + Debt - Cash] / Production Barrels Per Day
PullbackMarket only pullbacks X-Y %
Recoverable barrels of oilA term used to describe the amount of resources identified in a reserve that is technologically or economically feasible to extract. A new reserve can be discovered, but if the resource cannot be extracted by any known technological methods, then it would not be considered part of recoverable reserves. Recoverable reserves is also often called proved reserves.
Recoverable oil resourceIs this the same as Estimated Ultimate RecoveryA guess at how much the well would produce over time?
Recovery FactorPercentage of oil recoverable vs. what is the Oil Originally In Place
Recycle RatioA measure of a company's production efficiency based on its finding and development costs. Equation: Profit from each barrel produced / cost of finding the barrel of oil
Secondary recoveryWhen producers try to stimulate the oil formation with water or carbon dioxide or other chemicals
Shallow formationAny formation typically < X feet down
Sheet sandFlat, gentle wavey plots of sand surfaced by grains that may be too large for saltation
Sour crude oilOil with a high sulpur content i.e. > 0.5%
Source rockA rock rich in orgranic matter, which, if heated correctly, will generate oil or gas.
Spud-a well
Stabilized rateHigh and fast drop off in production has stopped
Stacked payPayzones (or productive oil formations) that are stacked on top of each other
Submersible rigsUsed for ocean, lake and swamp drilling. Bottom of the rigs are submerged to the sea's floor and the platform is on top of the water.
Sweet crude oilOil with a low sulphur content i.e. < 0.5%
tcftrillion cubic feet (gas)
Tight oil playTight oil is a Petroleum play that consists of light crude oil contained in petroleum-bearing formations of relatively low porosity and permeability (shales). It uses the same horizontal well and hydraulic fracturing technology used in recent boom in production of shale gas. It should not be confused with oil shale and shale oil as it differs by the API gravity and viscosity of the fluids, as well as the method of extraction. Tight oil formations include the Bakken Shale.
Unstimulated productionNo fracking applied…
WarrantsA security that entitles the holder to buy the underlying stock of the issuing company at a fixed exercise price until the expiry date.
WaterfloodFlood the well in order to recover or extract more oil
WaterfloodsA method in which water is injected into the reservoir formation to displace residual oil.
WCSBA major trading classification of sweet light crude oil comprising Brent Blend, Forties Blend, Oseberg and Ekofisk crudes (also known as the BFOE Quotation). It's sourced from the North Sea & is the leading global price benchmark for Atlantic basin crude oils. It is used to price two thirds of the world's internationally traded crude oil supplies. Originally Brent Crude was produced from the Brent oilfield. The name "Brent" comes from the naming policy of Shell UK Exploration and Production, operating on behalf of ExxonMobil and Royal Dutch Shell, which originally named all of its fields after birds (in this case the Brent Goose).
West Texas Intermediate-WTIAlso known as Texas light sweet, is a grade of crude oil used as a benchmark in oil pricing. This grade is described as light because of its relatively low density, and sweet because of its low sulfur content.
Wet gas and oilAny gas with a small amount of liquid present
