Glossary
Anticline – A fold of rock layers, raised generally upward, in which the older layers are in the core of the fold. Anticlines can be as small as a hill or as large as a mountain range. Petroleum can concentrate at the crest of an anticline in what is called a structural trap.
Basin – A low-lying area in which thick sequences of sediments have accumulated. Five basins, divided by uplifts, are found in the subsurface of Kansas
Battery – A place where oil is collected from various pipelines.
Central Kansas Uplift – A broad and complex structural high that trends northwest to southeast across north-central Kansas and is now found only in the subsurface. Raised about 320 million years ago at the end of the Mississippian and beginning of the Pennsylvanian, the Central Kansas uplift is the largest structural feature in Kansas.
Chat – An informal name for the residual cherty, porous, weathered limestone zone in the Mississippian play.
Chert – Commonly called flint, chert is a fine-grained, microcrystalline sedimentary rock made up of silicon dioxide (SiO2)–the same chemical formula as the mineral quartz. Usually found as rounded nodules in limestone and dolomite or, less often, an extensive layered deposit, chert is harder and more resistant to erosion than limestone.
Coalbed Methane (CBM) – A sweet natural gas found in coal and used for home heating, natural gas-fired electrical generation and as an industrial fuel.
Common Share – An ownership stake in the Company. A common share of a publicly traded company can be bought or sold at the current market price on the stock exchange(s) where it is listed, e.g., New York.
Compressor Site – A field location comprised of one or more compressor stations.
Compressor Station – a location on the system where the pressure of the gas is increased so the transportation of the gas can continue. Basic hydraulic theory for the transportation of gas is that gas will naturally flow from higher pressure locations to lower pressure locations. The actual increase in pressure happens inside compressor units. A station may have one or more units arranged in parallel or in a series. Additional units in parallel increase the allowable amount of flow while maintaining a pressure increase. Additional units in a series increase the allowable pressure while supporting the same flow. Compressing gas increases the volume.
Contractor – Independent incorporated business entities engaged to perform services for a Company. Services and deliverables are outlined in a written agreement between the entity and Company. Individuals performing the services are engaged by the business entity, which provides the business infrastructure to manage its workforce. Contractors can be companies from whom the organization has selected one or more specific individuals to perform a service (e.g. professional or technical specialists, temporary staffing agencies), or companies selected to perform a service without specifying the individuals who will provide the service (i.e. service providers such as services for drilling, completions and workovers). The term contractor can refer to the business entity or an individual it employs.
Control Valve – A physical device that can regulate or control the flow within a pipeline, or upstream or downstream pressure.
Core Competencies – The areas of expertise on which a business is built, those tasks or deliverables for which a company is considered expert. An individual’s competencies are those attributes that make up their expertise or suitability to a particular job.
Crude Oil – Petroleum found in liquid form, flowing naturally or capable of being pumped without further processing or dilution.
Delineation Well – A well drilled just outside the proved area of an oil or gas reservoir in an attempt to extend the known boundaries of the reservoir.
Development Well – A well drilled within the area of an oil or gas reservoir known to be productive. Development wells are relatively low risk.
Discount Rate – The rate at which a series of future cash flows are discounted in order to determine their present value.
Downstream – Closer to the point of sale than to the point of production.
Downstream Sector – The refining and marketing sector of the petroleum industry.
Dry Hole – A well found to be incapable of producing oil or gas in sufficient quantities to justify completion.
Established Reserves – The portion of the discovered resource base that is estimated to be recoverable using known technology under present and anticipated economic conditions. Includes proved plus a portion of probable (usually 50%).
Exploitation – Various methods of optimizing oil and gas production or establishing additional reserves from producing properties through additional drilling or the application of new technology.
Exploration – The act of searching for new, undiscovered oil and gas resources.
Exploratory Well – A well drilled in an unproved area, either to find a new oil or gas reservoir or to extend a known reservoir. Sometimes referred to as a wildcat.
Field – A geographical area under which one or more oil or gas reservoirs lie.
Flaring/Venting – Controlled burning (flare) or release (vent) of natural gas that can’t be processed for sale or use because of technical or economic reasons.
Flow-Through Evaluation – An approach to project economic evaluation that assumes taxes payable are calculated on a corporate basis that allows a project to take maximum tax deductions. Flow-through evaluations are required for large projects that require corporate impact analysis.
Flow Rate – The amount of volume per unit of time that is moving on the pipeline system.
Fracture, Refracture – The process of applying hydraulic pressure to an oil or gas bearing geological formation to crack the formation and stimulate the release of oil and gas.
Gross Acres – The total acres covered by a lease.
Horizontal Drilling – Drilling that starts out vertical then gradually turns in a horizontal direction to extend a greater distance into a known oil-producing zone.
Hugoton Embayment – The northwestern shelf area of the Anadarko basin (fig. 4). The Hugoton gas field of western Kansas is the largest conventional gas field in North America.
Hydraulic Fracturing – Injection of fluids and sand into a well to fracture oil-bearing rock layers. Colloquially called “fracking,” especially when used in conjunction with horizontal drilling, hydraulic fracturing increases permeability in rocks to free trapped oil.
Increased Density/Infill Well – A well drilled in addition to the number of wells permitted under initial spacing regulations, used to enhance or accelerate recovery, or prevent the loss of proved reserves.
Internal Rate of Return (IRR) – After tax rate of return for the project life, at which net present value (NPV) equals zero.
Lithologic – Relating to lithology, which is the description of a rock based on such physical characteristics as color, mineral composition, texture, and grain size.
Market Capitalization – Value of a corporation as determined by the market price of its issued and outstanding common stock. It is calculated by multiplying the number of outstanding shares by the current market price of a share.
Market Price – Last reported traded price (if on an exchange) of a share, or its current bid and ask prices (if over-the-counter); i.e., the price as determined by buyers and sellers in an open market. Also called market value.
Meter Station – A pipeline location with metering or measuring of gas flow as its primary function.
Midstream – The processing, storage and transportation sector of the petroleum industry.
Miscible Flooding – An oil-recovery process in which a fluid, capable of mixing completely with the oil it contacts, is injected into an oil reservoir to increase recovery.
Natural Gas Liquids (NGLs) – Liquid hydrocarbons that are extracted and separated during natural gas production. NGL products include ethane, propane, butane and natural gasoline.
Nemaha Uplift – A complexly folded and faulted northeast-trending structural high in east-central Kansas (fig. 4) that formed about 320 million years ago at the end of the Mississippian and beginning of the Pennsylvanian and extends into Nebraska and Oklahoma.
Net Acres – Company’s working interest times the total acres covered by a lease.
Netback – Linkage of the price of crude oil to the market price of products refined from it.
Net Present Value (NPV) – Sum of all discounted after-tax cash flows, including capital costs. Often reported for 0%, 9%, and 15% discount rate.
Oilsands – A complex mix of sand, water and clay trapping very heavy oil known as bitumen.
Onshore – Exploration and production taking place on land.
Permeability – The capacity of rock, soil, or sediment to transmit fluid through connected pores.
Play – A set of oil and/or gas accumulations and reservoirs that share a geologic setting within a defined geographic area.
Policy – A clear and concise statement by the organization’s executive leadership indicating the Corporation’s intentions, principles and performance expectations relative to the Corporate Constitution and to its legal, regulatory, legislative, social and/or governance responsibilities.
Porosity – The ratio of the combined volume of pores in a rock to the rock’s total volume, usually expressed as a percentage. Porous rocks are permeable only when the pores are interconnected.
Practice – A universally applied standard defining the Corporation’s execution expectations relative to one or more corporate policies.
Profit Investment Ratio (PIR) – Net Present Value divided by discounted capital investment. Reported for 0% and 9% discount rates.
Proved Reserves – Estimates of oil, gas and NGL quantities thought to be recoverable from known reservoirs under existing economic and operating conditions.
P Mean – The expected average value or risk-weighted average of all possible outcomes.
P10 – The outcome for which the probability of occurrence of that value or greater is 10 percent. The actual value is expected to be larger only one time out of 10.
P90 – The outcome for which the probability of occurrence of that value or greater is 90%. Nine times out of 10 the actual value is expected to be larger.
Recavitate – The process of applying pressure surges on the coal formation at the bottom of a well in order to increase fracturing, enlarge the bottomhole cavity and thereby increase gas production.
Recompletion – The modification of an existing well for the purpose of producing oil or gas from a different producing formation.
Resource Play – A term used to describe an accumulation of hydrocarbons known to exist over a large area expanse and/or thick vertical section, which when compared to a conventional play, typically has a lower geological and/or commercial development risk and lower average decline rate.
Royalty – The owner’s share of the value of minerals (oil and gas) produced on the property.
Seismic – A tool for identifying underground accumulations of oil or gas by sending energy waves or sound waves into the earth and recording the wave reflections. Results indicate the type, size, shape and depth of subsurface rock formations. 2-D seismic provides two-dimensional information while 3-D creates three-dimensional pictures. 4-C, or four-component, seismic is a developing technology that utilizes measurement and interpretation of shear wave data. 4-C seismic improves the resolution of seismic images below shallow gas deposits.
Service Providers – A subset of contractors, service providers are independent incorporated business entities engaged to provide services to a Company. Services and deliverables are outlined in a written agreement between the entity and Company. Individuals performing the services are engaged by the business entity, which provides the business infrastructure to manage its workforce. Service providers are generally companies selected to perform a service without specifying the individuals who will provide the service (e.g. services for drilling, completions and workovers). Service providers may conduct their work onsite at Company facilities or offsite from their own facilities.
Severance Tax – A tax imposed upon nonrenewable natural resources that are removed from the earth.
Sour Gas – Natural gas at the wellhead may contain hydrogen sulphide (H2S), a toxic compound. Natural gas that contains more than 1% of H2S is called sour gas.
Stakeholders - People with an interest in the activities of the oil and gas industry are considered stakeholders. They may include landowners, municipalities, recreational land users, other industries, environmental groups, governments and regulators.
Station – Remote pipeline facility including meter stations, compression stations, block valve sites, and control valve sites.
Steam Injection – A recovery technique in which steam is injected into a reservoir to reduce the viscosity of the crude oil.
Stratigraphic Trap – A trap for oil or gas created by changes in rock lithology rather than from a structural deformation, such as when an impermeable cap of shale traps oil that has moved up through an underlying layer of permeable sandstone.
Supplier – An organization that offers goods or services to a purchaser and may recommend opportunities for savings and improvements. Examples of suppliers include companies that sell pipe, valves and fittings, coiled tubing services or steel products.
Sweet Oil and Gas – Petroleum containing little or no hydrogen sulfide.
Syncline – A generally downward fold of rock layers, in which the younger rocks are in the core of the fold.
Take-In-Kind – Used to denote that a royalty may be paid/received in product (e.g. oil or gas) rather than fiscally.
Tight Gas – Gas found in sedimentary rock that is cemented together so tight that flow rates are very low. Extracting tight gas usually requires enhanced technology like”hydraulic fracturing” where fluid is pumped into the ground to make it more permeable.
Undeveloped Acreage – Lease acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil or gas.
Upstream – Companies who explore for, develop and produce petroleum resources are known as the upstream sector of the petroleum industry.
Valve – A physical device that can regulate or control the flow of oil or gas on a pipeline.
Vendor – A supplier that can arrange to offer specified goods on a pre-determined schedule. Examples of vendors include companies that sell office paper or safety supplies.
Wildcat – A well drilled in an area where no oil or gas production exists.
Workover – The process of conducting remedial work, such as cleaning out a well bore, to increase or restore production.
