Glossary of Terms
The following are abbreviations and definitions of terms commonly used in the oil and gas industry and this website.
Asset intensity
The amount of capital a company requires to maintain production at constant levels; computed by multiplying current year production by the 3-year average F&D cost/Mcfe and dividing the product by current year cash flow from operations.
Bbl
Barrel(s) of oil. One barrel of oil is the energy equivalent of six Mcf of natural gas.
Bcf
Billion cubic feet of natural gas.
Bcfe
Billion cubic feet of natural gas equivalent.
CAPEX
Capital expenditures.
Capital efficiency
Computed by dividing current year EBITDA, adjusted to exclude unrealized gains and losses on derivatives, by current year production and diving the quotient by the 3-year average F&D cost/Mcfe.
CIG
Colorado Interstate Gas.
Completion
The installation of permanent equipment for the production of oil or gas.
Development well
A well drilled within the proved area of an oil or gas reservoir to the depth of a stratigraphic horizon known to be productive.
Dry hole
A well found to be incapable of producing hydrocarbons in sufficient quantities to justify completion as an oil or gas well.
EBITDA
Earners before interest, income taxes, depreciation, depletion and amortization.
Exit rate
Natural gas equivalent produced as of the date specified.
Exploratory well
A well drilled to find a new field or to find a new reservoir in a field previously found to be productive of oil or gas in another reservoir.
Extensions and discoveries
As to any period, the increases to proved reserves from all sources other than the acquisition of proved properties or revisions of previous estimates.
Farm-out
Transfer of all or part of the operating rights from a working interest owner to an assignee, who assumes all or some of the burden of development in return for an interest in the property. The assignor usually retains an overriding royalty but may retain any type of interest.
Gross acres or wells
Refers to the total acres or wells in which we have a working interest.
Horizontal drilling
A drilling technique that permits the operator to contact and intersect a larger portion of the producing horizon than conventional vertical drilling techniques and may, depending on the horizon, result in increased production rates and greater ultimate recoveries of hydrocarbons.
Joint Interest Billing or JIB
Process of distributing the costs related to well completions and operations among working interest partners.
MBbl
Thousands barrels of oil.
Mcf
Thousand cubic feet of natural gas.
Mcfe
Thousand cubic feet equivalent of natural gas.
MMBbl
Million barrels of oil.
MMBoe
Million barrels of oil equivalent.
MMcf
Million cubic feet of natural gas.
MMcfe
Million cubic feet equivalent of natural gas.
Natural Gas Liquids or NGLs
Hydrocarbons which can be extracted from wet natural gas and become liquid under various combinations of increasing pressure and lower temperature. NGLs consist primarily of ethane, propane, butane, and natural gasolines.
Net acres or wells
Refers to gross acres or wells multiplied, in each case, by the percentage working interest we own.
Net production
Natural gas and oil production that we own, less royalties and production due others.
NYMEX
New York Mercantile Exchange.
Operator
The individual or company responsible for the exploration, development and/or production of an oil or gas well or lease.
Peer group
Consists of Bill Barrett Corporation (NYSE: BBG), Carrizo Oil & Gas (NASDAQ: CRZO), Goodrich Petroleum Corporation (NYSE: GDP), Magnum Hunter Resources Corp. (NYSE: MHR), PetroQuest Energy Inc. (NYSE: PQ), PetroQuest Energy Inc. (NYSE: PQ), Penn Virginia Corporation (NYSE: PVA), Rex Energy Corporation (NASDAQ: REXX), and Rosetta Resources Inc. (NASDAQ: ROSE).
PEPL
Panhandle Eastern Pipeline.
Present value of proved reserves
The present value of estimated future revenues, discounted at 10% annually, to be generated from the production of proved reserves determined in accordance with Securities and Exchange Commission guidelines, net of estimated production and future development costs, using prices and costs as of the date of estimation without future escalation, without giving effect to (i) estimated future abandonment costs, net of the estimated salvage value of related equipment, (ii) non-property related expenses such as general and administrative expenses, debt service and future income tax expense, or (iii) DD&A expense.
Proved developed non-producing reserves
Reserves that consist of (i) proved reserves from wells which have been completed and tested but are not producing due to lack of market or minor completion problems which are expected to be corrected and (ii) proved reserves currently behind the pipe in existing wells and which are expected to be productive due to both the well log characteristics and analogous production in the immediate vicinity of the wells.
Proved developed producing reserves
Proved reserves that can be expected to be recovered from currently producing zones under the continuation of present operating methods.
Proved developed reserves
The combination of proved developed producing and proved developed non-producing reserves.
Proved reserves
Those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible - from a given date forward, from known reservoirs, and under existing conditions, operating methods, and government regulations – prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonable certain, regardless of whether deterministic or probabilistic methods are used for the estimation.
Proved undeveloped reserves or PUD
Proved reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.
Recompletion
A recompletion occurs when we reenter a well to complete (i.e., perforate) a new formation different from that in which a well has previously been completed.
Refrac or refracture
A refrac is when we stimulate the present producing zone of a well to increase production, using hydraulic, acid, gravel, etc. fracture techniques.
Reserve replacement
Calculated by dividing the sum of reserve additions from all sources (revisions, extensions, discoveries and other additions and acquisitions) by the actual production for the corresponding period. We use the reserve replacement ratio as an indicator of our ability to replenish annual production volumes and grow our reserves, thereby providing some information on the sources of future production. It should be noted that the reserve replacement ratio is a statistical indicator that has limitations. As an annual measure, the ratio is limited because it typically varies widely based on the extent and timing of new discoveries and property acquisitions. Its predictive and comparative value is also limited for the same reasons. In addition, since the ratio does not imbed the cost or timing of future production of new reserves, it cannot be used as a measure of value creation.
Reserves
Estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and gas or related substance to market, and all permits and financing required to implement the project.
Royalty
An interest in an natural gas and oil lease that gives the owner of the interest the right to receive a portion of the production from the leased acreage (or of the proceeds of the sale thereof), but generally does not require the owner to pay any portion of the costs of drilling or operating the wells on the leased acreage. Royalties may be either landowner’s royalties, which are reserved by the owner of the leased acreage at the time the lease is granted, or overriding royalties, which are usually reserved by an owner of the leasehold in connection with a transfer to a subsequent owner.
SEC PV-10
The present value of proved reserves based on 12-month average commodity prices, discounted at a rate of 10% per annum.
Standardized measure of discounted future net cash flows
Present value of proved reserves, as adjusted to give effect to (i) estimated future abandonment costs, net of the estimated salvage value of related equipment, and (ii) estimated future income taxes.
Trunk Line
A pipeline for the transportation of oil or natural gas from producing areas to refineries or terminals.
Undeveloped acreage
Leased acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of natural gas and oil, regardless of whether such acreage contains proved reserves.
Wellbore
A physical hole that makes up the well, and can be cased, open or a combination of both.
Working interest
An interest in an natural gas and oil lease that gives the owner of the interest the right to drill for and produce natural gas and oil on the leased acreage and requires the owner to pay a share of the costs of drilling and production operations. The share of production to which a working interest is entitled will be smaller than the share of costs that the working interest owner is required to bear to the extent of any royalty burden.
Workover
Operations on a producing well to restore or increase production.