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A - C | D - G | H - L
| M - P | Q - S | T - Z D - G
D
Deductions - Tax items which may be subtracted from
gross income to arrive at taxable income in Federal income tax
computations.
Deed - A written document by which the title to a
property is transferred from one party (the grantor) to another (the
grantee).
Deepwater port - An offshore marine terminal designed
to accommodate large vessels such as VLCCs and tankers, connected to the shore
by submerged pipelines.
Delay rental - Cash payments to the mineral rights
owner (lessor) by the working interest owner (lessee), for the privilege of
postponing the commencement of drilling operations on the leased
property.
Deliverability - A well's tested ability to
produce.
Depletion, restoration of - In federal income
taxation, the adding back to income of depletion allowance taken on minerals not
produced.
Development - well A well drilled in an already
discovered oil or gas field.
Diesel oil - A petroleum fraction composed primarily
of aliphatic (linear of unbranched) hydrocarbons. Diesel oil is slightly heavier
than kerosene.
Differential-pressure sticking - A condition
in which a section of drillpipe becomes stuck in deposits on the wall of the
borehole.
Directional drilling - Drilling at an angle, instead
of on the perpendicular, by using a whipstock to bend the pipe until it is going
in the desired direction. Directional drilling is used to develop offshore
leases, where it is very costly and sometimes impossible to prepare separate
sites for every well; to reach oil beneath a building or some other location
which cannot be drilled directly; or to control damage or as a last resort when
a well has cratered. It is much more expensive than conventional drilling
procedures.
Distillate - Liquid hydrocarbons, usually colorless
and of high API gravity, recovered from wet gas by a separator that condenses
the liquid out of the gas. The present term is natural gas.
Distillate fuel oil - A term subject to a variety of
definitions. Sometimes the definition is based on the method of production, but
other definitions are based on boiling range, viscosity, or use.
Distributor - A wholesaler of gasoline and other
petroleum products; also know as a jobber. Distributors of natural gas are
almost always regulated utility companies.
Division Order - A contract for the sale of oil or
gas, by the holder of a revenue interest in a well or property, to the purchaser
(often a pipeline transmission company).
Domestic production - Oil and gas produced in the
United States as opposed to imported product.
Downhole - Refers to equipment or operations that
take place down inside a borehole.
Downstream - All operations taking place after crude
oil is produced, such as transportation, refining, and marketing.
Drill bit - The part of the drilling tool that cuts
through rock strata.
Drill string - Also called drill pipe or drill stem.
Thirty-foot lengths of steel tubing screwed together to form a pipe connecting
the drill bit to the drilling rig. The sting is rotated to drill the hole and
also serves as a conduit for drilling mud.
Drilling - The act of boring a hole through which oil
or gas may be produced if encountered in commercial quantities.
Drilling break - A sudden increase in the rate of
drilling.
Drilling fund - The generic term employed to describe
a variety of organizations established to attract venture capital to oil and gas
exploration and development. Typically the fund is established as a joint
venture or limited partnership.
Drilling mud - A mixture of clay, water, chemical
additives, and weighting materials that flushes rock cuttings from a well,
lubricates and cools the drill bit, maintains the required pressure at the
bottom of the well, prevents the wall of the borehole from crumbing or
collapsing, and prevents other fluids from entering the well bore.
Drilling platform - An offshore structure with legs
anchored to the sea bottom that supports the drilling of up to 35 wells from one
location.
Drilling rig - The surface equipment used to drill
for oil or gas, consisting chiefly of a derrick, a winch for lifting and
lowering drill pipe, a rotary table to turn the drill pipe, and engines to drive
the winch and rotary table.
Drillstem test - A test through the drill pipe prior
to completion to determine if oil or gas is present in a formation.
Dry hole - A well that either produces no oil or gas
or yields too little to make it economic to produce.
Dry natural gas - Natural gas containing few or no
natural gas liquids (liquid petroleum mixed with gas).
Dual completion - Completing a well that draws from
two or more separate producing formations at different depths. This is done by
inserting multiple strings of tubing into the well casing and inserting packers
to seal off all formations except the one to be produced by a particular
string.
Due Diligence - In an offering of securities, certain
parties who are responsible for the accuracy of the offering document, have an
obligation to perform a "due diligence" examination of the issuer; issuer's
counsel, underwriter of the security, brokerage firm handling the sale of the
security. Due diligence refers to the degree of prudence that might properly be
expected from a reasonable man, on the basis of the significant facts which
relate to a specific case.
E
Economic interest - An interest in oil and gas in the
ground. It entitles the owner to a deduction from gross income derived from
production of that oil and gas as specified in Federal income tax
regulations.
Electrical well logging - A method of oil exploration
that originated with Conrad Schlumberger, who first tested it in 1927 on a
1,500-meter well in France. As used today, the process is very simple. Current
passes into the ground, through the resistive medium and into the sonde. The
resulting charts show the varying resistance, the conductance, and the
self-potential of the strata surrounding the well at every level, and
geophysicists use them to assay whether petroleum is present in a
formation.
Enhanced oil recovery - Injection of water, steam,
gases or chemicals into underground reservoirs to cause oil to flow toward
producing wells, permitting more recovery than would have been possible from
natural pressure or pumping alone.
Ethanol - The two-carbon-atom alcohol present in the
greatest proportion upon fermentation of grain and other renewable resources
such as potatoes, sugar, or timber. Also called grain alcohol.
Expenses (Tax Usage) - Expenditures for business
items that have no future life (such as rent, utilities, or wages) and are
incurred in conducting normal business activities.
Exploration - The search for oil and gas. Exploration
operations include: aerial surveys, geophysical surveys, geological studies,
core testing and the drilling of test wells.
Exploratory well - A well drilled to an unexplored
depth or in unproven territory, either in search of a new reservoir or to extend
the known limits of a field that is already partly developed.
External casing packer - A device used on the outside
of the well casing to seal off formations or protect certain zones. The packer
is run on the casing and expanded against the wall of the borehole at the proper
depth by hydraulic pressure or fluid pressure from the well.
Extraction plant - A plant for the extraction of the
liquid constituents in casinghead gas or wet gas.
F
Farm in - When one company drills wells or performs
other activity on another company's lease in order to earn an interest in or
acquire that lease.
Farm out agreement - An arrangement in which the
responsibility of exploration and development is shifted (by assignment) from
the working interest owner to another party.
Farmer's oil - An expression that refers to the
landowner's share of oil from a well drilled on his property. This royalty is
traditionally one-eighth of the produced oil free of any expense to the
landowner.
Fault - A break in the continuity of stratified rocks
or even basement rocks. Faults are significant to oilmen because they can form
traps for oil when the rock fractures, they can break oil reservoirs into
noncommunicating sections, they help produce oil accumulations, and they form
traps on their own.
Fault trap - A geological formation in which oil or
gas in a porous section of rock is sealed off by a displaced, nonporous
layer.
Fee lands - Privately owned, nonpublic
lands.
Feet of pay - The thickness of the pay zone
penetrated in a well.
Field - A geographical area under which one or more
oil or gas reservoirs lie, all of them related to the same geological
structure.
Filter cake - A plastic-like coating that builds up
inside the borehole. Such buildup can cause serious drilling problems, including
sticking of the drillpipe.
Fishing - Recovering the tools or pipe that have been
accidentally lost down the borehole by using specially designed tools that screw
into or grab the missing equipment.
Fishing tools - Special instruments equipped with the
means for recovering objects lost while drilling the well.
Five-spot waterflood program - A secondary-recovery
operation in which four injection wells are drilled in a square pattern with the
production well in the center. Water from the injection wells moves through the
formation, forcing oil toward the production well.
Flange up - To complete the drilling of a
well.
Flaring - The burning of gas vented through a pipe or
stack at a refinery, or a method of disposing of gas while a well is being
drilled. Flaring is regulated by state agencies. Venting (letting gas escape
unburned) is generally prohibited.
Flooding - One of the methods of enhanced oil
recovery. Water flooding or gas flooding might be considered secondary recovery
methods.
Flow Through concept - In ventures structured as
partnerships (or S corporations), certain items of tax significance (profit,
loss, etc.) are passed on to the partners (or S corporation shareholders) in the
venture. In a venture structured as a "C" corporation, the responsible
tax-paying party would be the corporation itself (not its
shareholders).
Flowing well - A well that produces through natural
reservoir pressure and does not require pumping.
Formation - A geological term that describes a
succession of strata similar enough to form a distinctive geological unit useful
for mapping or description.
Fossil fuels - Fuels that originate from the remains
of living things, such as coal, oil, natural gas, and peat.
Fracturing - A well stimulation technique in which
fluids are pumped into a formation under extremely high pressure to create or
enlarge fractures for oil and gas to flow through. Proppants such as sand are
injected with the liquid to hold the fractures open.
Front-end costs - Costs that are paid out of initial
investment in a venture, first, before the venture activities actually
begin.
Fuel oil - See Heating oil.
Future prices - Refers to the New York Mercantile
Exchange (NYMEX) which introduced futures contracts for crude oil in 1985 and
natural gas in 1990.
G
Gamma-ray logging - A technique of exploration for
oil in which a well's borehole is irradiated with gamma rays. The varying
emission of these rays indicates to geologists the relative density of the rock
formation at different levels.
Gas cap - The gas that exists in a free state above
the oil in a reservoir.
Gas condensate - Liquid hydrocarbons present in
casinghead gas that condense when brought to the surface.
Gas lift - A recovery method that brings oil from the
bottom of a well to the surface by using compressed gas. Gas pumped to the
bottom of the reservoir mixes with fluid, expands it, and lifts it to the
surface.
Gas-cut mud - Drilling mud permeated with bubbles of
gas from downhole. The circulation of such mud can be severely impaired,
seriously affecting drilling operations.
Gas-oil ratio - The number of cubic feet of natural
gas produced along with a barrel of oil.
Gasoline - A volatile, inflammable, liquid
hydrocarbon mixture.
General partner - In a limited partnership, the
general partner is responsible for managing the partnership's activities (and is
commonly the party that put the deal together). His liability to the
partnership's creditors is limited.
Geophones - The sound-detecting instruments used to
measure sound waves created by explosions set off during seismic exploration
work.
Geophysicist - A geophysicist applies the principles
of physics to the understanding of geology.
Geothermal energy - Energy produced from subterranean
heat.
Gravimeter - A geophysical device that has been
particularly useful in finding salt domes. Actually, it is a weight on a spring.
The spring gets longer in high-gravity areas and shorter in areas of
gravity-minus. Magnetism helps the oil geologist understand its
measurements
Gross income - Total income from an activity, before
deduction of (1) items that may be treated as expenses (such as intangible
drilling costs), and (2) allowed tax items (such as depletion allowance,
depreciation allowance, etc.).
Groundwater - The water in underground rock strata
that supplies wells and springs.
Guaranteed payments - Payments by a partnership to
one or more of its partners for services rendered.
Gun perforation - A method of creating holes in a
well casing downhole by exploding charges to propel steel projectiles through
the casing wall. Such holes allow oil from the formation to enter the
well.
Gusher - A well drilled into a formation in which the
crude is under such high pressure that at first it spurts out of the wellhead
like a geyser. Gushers are rare today owning to improved drilling technology,
the use of drilling mud to control downhole pressure, and oilmen's recognition
of their wastefulness.
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