Glossary of Terms
Key terms and definitions for understanding oil and gas investments.
Workover
Maintenance or remedial work on an existing well to repair equipment or improve its ability to produce.
Rework
Restoration work performed on an existing well and its production equipment.
Recompletion
Completing an existing well in another producing interval or changing its completion.
Pumpjack
Surface equipment that drives the rod-pumping system of an oil well.
Tank Battery
A group of tanks and associated equipment used to collect, separate, and store produced fluids.
Run Ticket
A record of an oil pickup, including measured volume and quality information.
Gauger
A person who measures tank contents and checks oil quality before transfer.
Payout
The point at which the invested capital has been returned under the applicable program terms.
BOE
Barrel of oil equivalent, a unit combining oil and gas on an energy-equivalent basis.
Orphan Well
A well without a responsible operator available to maintain or plug it.
Plugging Bond
Financial assurance intended to support well-plugging and related obligations.
Force Pooling
A regulatory process addressing separately owned interests within a drilling or spacing unit.
Title Opinion
An attorney’s opinion on ownership and interests in the property reviewed.
Accredited Investor
An individual or entity meeting the applicable securities-law eligibility requirements for certain private investments. Third-party verification is required for this program.
Blanket Reservoir
A widespread, laterally continuous reservoir formation that extends over a large geographic area with consistent properties.
Completion
The process of finishing a well so that it is ready to produce oil or gas, including casing, cementing, perforating, and installing production equipment.
Conventional Reservoir
A reservoir where oil and gas can flow naturally through porous rock to the wellbore, as opposed to unconventional reservoirs like shale that require stimulation.
Decline Curve
A graphical representation of how oil or gas production from a well decreases over time, used to estimate future production and reserves.
Depletion Allowance
A tax deduction that allows investors to recover the cost of a wasting asset (oil and gas reserves) as they are produced and sold.
Horizontal Drilling
A drilling technique where the wellbore is directed horizontally through the producing formation to maximize contact with the reservoir.
Intangible Drilling Costs (IDC)
Certain non-equipment costs related to drilling and completion. Tax treatment depends on the project structure and individual eligibility; consult a tax advisor.
Lateral
The horizontal portion of a wellbore that extends through the producing formation.
Multi-Lateral Well
A well with multiple horizontal branches (laterals) drilled from a single vertical or deviated wellbore to maximize reservoir contact.
Net Revenue Interest (NRI)
The share of production revenues an investor receives after royalties and other burdens are deducted from the working interest.
Oswego Formation
A Pennsylvanian-age limestone formation in Oklahoma known for conventional oil and gas production with predictable decline curves and long well lives.
Private Placement Memorandum (PPM)
A legal document providing detailed information about an investment offering to prospective investors, including risks, terms, and use of proceeds.
Regulation D
SEC rules that provide exemptions from registration requirements for private securities offerings, commonly used for oil and gas investments.
Spud
The commencement of drilling operations, when the drill bit first breaks ground.
Type Curve
A representative production profile based on historical data from similar wells, used to estimate expected production from a new well.
Working Interest
The percentage of ownership in an oil and gas property that obligates the owner to pay their proportionate share of drilling and operating costs.