Friday, July 10, 2009


AAPL —(abbrev.) American Association of Professional Landmen (formerly the American Association of Petroleum Landmen).

ABANDON — To cease attempts to produce oil or gas from a well or lease, and to plug the reservoir in accordance with regulatory requirements and recover equipment.

ABSORBER* — Field equipment, usually a tower, that removes oil or water from a gas stream using absorption (as opposed to adsorption). In absorption, the removed liquid changes by mixing with another liquid. For example, a triethylene glycol (TEG) absorber removes water from a gas stream in a process where wet gas enters at the bottom of the unit, passes through a TEG stream, and exits dry at the top. The resulting wet glycol is dried in a reboiler to remove the water.

ACIDIZE — To increase the flow of oil from a well by introducing acid into a carbonate formation (such as limestone) to open passages through which oil can flow into the well bore. Acidizing may be called an acid job.

ACQUISITION COSTS — Direct and indirect costs incurred to acquire legal rights to wasting natural resources.

ACQUISITION WELL* — A well drilled in exchange for a mineral interest in a property. It also can be called an obligation well.

ACRE-FOOT — Reservoir analysis measure of volume equaling 43,560 cubic feet, or 7,758 barrels. One acre-foot represents the volume that would cover one acre to a depth of one foot.

ACT or LACT SYSTEM — (abbrev.) See LACT UNIT.
AD VALOREM TAXES — Local taxes, such as county and school district taxes, paid and based on the individual property value.

ADSORPTION PLANT* — Field equipment for removing liquid from a gas stream by adsorption (as opposed to absorption as explained above). In adsorption, the removed liquid is unchanged, but clings to the surface of a solid adsorbent such as activated charcoal.

ADVANCE ROYALTY* or ADVANCED ROYALTY — Generally, a royalty that must be paid regardless of production and revenue levels, such as a minimum royalty or a shut-in royalty, for which future production royalties may or may not be reduced.

AFE (AUTHORIZATION OR AUTHORITY FOR EXPENDITURE) — Budgeting and approval form used during the planning process for a well about to be drilled (and for other projects). It includes an estimate of costs to be incurred in the IDC category and in the tangible equipment category. Costs are shown in total with accompanying breakdowns. The AFE form represents: (1) a budget for the project against which actual expenditures are compared, and (2) a joint venture form for evidencing agreement by joint interest owners to participate in the budgeted project.

AIR DRILLING* — Use of compressed air as a substitute for drilling mud in rotary drilling.

AIR/GAS LIFT* — Method of raising oil from the formation by injecting air or gas directly into the fluid in the casing.

ALLOWABLE* — Amount of oil or gas that a well or lease can produce during a given time period according to government regulations.

AMI — (abbrev.) Area of mutual interest.

ANGLE OF DEFLECTION* — In directional drilling, the angle expressed in degrees at which a well is deflected from the vertical by means of a whipstock or other deflecting tool.

ANNULAR SPACE (ANNULUS) — Space surrounding a cylindrical object within a cylinder. The space around a pipe suspended in a wellbore is often termed the annulus, and its outer wall may be either the wall of the borehole or the casing.

ANTICLINES — Underground mountain-shaped strata covered with a cap rock or an impervious rock layer.

API — (abbrev.) American Petroleum Institute.

API GRAVITY or °API — Standard industry measure of gravity (i.e., density) of a liquid petroleum product. The formula for API gravity in terms of specific gravity (g) is (141.5 ÷ g at 60°F) – 131.5. Very light crude oils and gasoline have API gravity in the range of 50° to 60°. The API gravity for light crude oils ranges from about 35° to 45°. Heavy (dense) crude oils have an API Gravity range from about 6° to 25°. In comparison, water has an API gravity of 10° and a specific gravity of 1.

API WELL NUMBER* —Distinct twelve digit number assigned to a U.S. well. Digits 1 and 2 are state codes, digits 3 through 5 are county/parish or offshore codes, digits 6 through 10 identify the well, and digits 11 and 12 identify special well conditions such as a sidetracking.

APO —(abbrev.) After payout. Used with working interests and net revenue interests to indicate ownership after payout (see PAYOUT) versus before payout (see BPO).

AREA OF INTEREST —Federal income tax term used in allocating GEOPHYSICAL AND GEOLOGICAL COSTS to certain properties. A large-scale geophysical survey may indicate several areas of interest. Costs of the survey must be allocated to each area of interest, and when leases are obtained, the geophysical costs become part of the basis of the property .

AREA OF MUTUAL INTEREST (AMI) —A term found in joint venture agreements designating a geographic area around the joint venture’s leases. The agreement provides that any joint venture participant obtaining new property rights within the AMI must offer such rights to the joint venture.

ASSIGNEE —In law, generally a transferee; a recipient of an interest in property or a contract. In oil and gas law, the term commonly means, but is not limited to, the transferee of an oil and gas lease.

ASSIGNMENT —In law, generally a transfer. In oil and gas law, usually a transfer of a property interest or of a contract. The most common usage refers to the assignment of an oil and gas lease.

ASSIGNOR —In law, generally a transferor; the party who conveys a right, title or interest in property or a contract. In oil and gas law, the term commonly means, but is not limited to, the conveyor of an oil and gas lease.

ASSOCIATED GAS —Natural gas, occurring in the form of a gas cap, overlying an oil zone (as opposed to NONASSOCIATED GAS from a gas reservoir with no oil, and CASINGHEAD GAS contained in the reservoir’s crude oil gas).



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