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Abandoned well - A well that is permanently shut down because it was a dry hole or because it has ceased to produce crude oil or natural gas. http://www.centreforenergy.com/glossary.asp?EnergyType=1&;Template=1,1
Abandoned zone – Wells are frequently abandoned in particular zones within the well bore without abandoning the well itself.
Absolute ownership – The theory that minerals such as oil and gas are fully owned in place before they are extracted and reduced to possession. Title to oil and gas may be lost by legitimate drainage and by the rule of capture. http://www.oil-gas-leases.com/oil-gas-lease-terms.html
Addendum - An addition to a completed lease.
Allowable – The amount of oil or gas a well is permitted to produce, in accordance with an order of the regulatory authority.
Assignment - The transfer of interest, right or title.
Assignment clause - A clause in any legal instrument that allows either party to the contract to assign all or part of his/her interest to others. http://www.oil-gas-leases.com/oil-gas-lease-terms.html
Associated gas - Natural gas which, prior to human disturbance of the subsurface pool in which it is found, exists in association with petroleum in a cap of free gas above the petroleum (also known as ‘gas cap gas’).
Authority for expenditure - An estimate of costs prepared by a lease operator and sent to non-operators for their approval before work begins. This estimate is normally used in connection with well drilling operations. http://www.oil-gas-leases.com/oil-gas-lease-terms.html
Barrel (Bbl) - A common unit for measuring liquid hydrocarbons. One barrel contains about 159 litres. Or, there are approximately 6.29 barrels in one cubic metre.
Battery – Storage facilities which receive fluid production from a well or wells and typically includes equipment for separating the fluid into oil, gas and water and for measurement
Basin - Also called as structural basin is defined as a large-scale structural formation of rock strata formed by tectonic warping of previously flat lying strata. Structural basins are geological depressions, and are the inverse of domes. Basins appear on a geologic map as roughly circular or elliptical, with concentric layers. Basins are often large in a real extent, often hundreds of kilometers across. Structural basins are often important sources of coal, petroleum, and groundwater. http://www.oilandgasiq.com/glossary/basin/
Bed - A layer of sediment or sedimentary rock, or stratum. A bed is the smallest stratigraphic unit, generally a centimeter or more in thickness. To be labeled a bed, the stratum must be distinguishable from adjacent beds. http://www.glossary.oilfield.slb.com/Display.cfm?Term=bed
Bitumen - Naturally-occurring, inflammable organic matter formed from kerogen in the process of petroleum generation that is soluble in carbon bisulfide. Bitumen includes hydrocarbons such as asphalt and mineral wax. Typically solid or nearly so, brown or black, bitumen has a distinctive petroliferous odor. Laboratory dissolution with organic solvents allows determination of the amount of bitumen in samples, an assessment of source rock richness. http://www.glossary.oilfield.slb.com/Display.cfm?Term=bitumen
Bonus or Bonus Consideration - The consideration received by the lessor or sub-lessor upon execution of an oil or gas lease. It is a cash payment by the lessee for the lessor having agreed to enter into a lease agreement, usually given in dollars per acre.
Cap on Deductions - a negotiable limit placed on the amount that the lessee can deduct from the lessor’s royalty pursuant to a lease agreement.
Casing – Steel pipe that is used to encase smaller diameter production pipe for installation in a well. Casing prevents the wall from caving in and protects against groundwater contamination and uncontrolled hydrocarbon releases.
Casing pressure – The pressure in the annulus between the tubing and the casing measured at the casing head of a well.
Caveat - is Latin for "let him beware." In land law, it is a warning that someone is claiming an interest in a parcel of land. http://www.servicealberta.gov.ab.ca/594.cfm
CBM – Coal Bed Methane - Natural gas, primarily methane that occurs naturally in the fractures and matrix of coal beds. http://www.ic.gc.ca/eic/site/ogt-ipg.nsf/eng/dk00048.html
Certificate of Title - Titles identify the registered owner, the legal description of the land, and any instruments registered against the land. http://www.servicealberta.gov.ab.ca/592.cfm
Christmas tree - The valve assembly at the top of tubing strings and casing in a natural gas well (or a free-flowing crude oil well) that provides primary pressure reduction, production rate control and shut-in capabilities. http://www.centreforenergy.com/glossary.asp?EnergyType=1&;Template=1,1
Completed well - A well made ready to produce oil or natural gas. Completion involves cleaning out the well, running steel casing and tubing into the hole, adding permanent surface control equipment, and perforating the casing so oil or gas can flow into the well and be brought to the surface.
Condensate - A solution or mixture consisting primarily of hydrocarbons, but which may contain other substances, which is liquid under standard surface temperature and pressure conditions and was gaseous in the subsurface pool from which it was recovered prior to human disturbance of that pool.
Crude Oil - A solution or mixture consisting primarily of hydrocarbons, but which may contain other substances, which is liquid under standard surface temperature and pressure conditions and was liquid in the subsurface pool from which it was recovered prior to human disturbance of that pool.
Cumulative production - Production of oil or gas to date. http://www.capp.ca/library/glossary/Pages/default.aspx
Depleted fields - The used up oil reservoirs that are used most often to store natural gas and comprise the majority of storage. These fields are known to have held gases and liquids for millions of years, their geology is known and there is substantial capacity available. Depleted fields provide the opportunity for storing CO2. http://www.oilandgasiq.com/glossary/depleted-fields/
Derrick - A load-bearing tower-like structure over a natural gas or crude oil well that holds the hoisting and lowering equipment for drilling, testing and reworking wells. http://www.centreforenergy.com/glossary.asp?EnergyType=1&;Template=1,1
Directional drilling - Drilling a wellbore at any angle other than vertical; used where the rig cannot be set up directly over the target, or to drill more than one hole from a single location. http://www.centreforenergy.com/glossary.asp?EnergyType=1&;Template=1,1
Dry Hole - An unsuccessful well; a well not capable of producing commercial quantities of oil or gas. http://www.ic.gc.ca/eic/site/ogt-ipg.nsf/eng/dk00048.html
e3m3 – A thousand cubic meters – the standard reporting unit for natural gas volumes in Canada where the gas volume is measured at a standard surface pressure of 101.325 kilopascals and standard surface temperature of 15 degrees Celsius. Gas volumes reported in metric e3m3 units may be converted to imperial (thousand cubic feet or Mcf) by multiplying the metric volume by 35.3.
Exploratory well - A well drilled in an area where oil or gas has not been previously found or one targeted for formations above or below known reservoirs.
Field - The geographical area encompassing a group of one or more underground oil or gas pools sharing the same or related infrastructure.
Flaring - Controlled burning of natural gas that cannot be processed for sale because of technical or economic reasons. The biggest portion is solution gas flaring, which involves the burning of natural gas produced along with crude oil and bitumen. Flaring contributes primarily to emissions of sulphur dioxide and greenhouse gases. Depending on the combustion efficiency of the flare, there may be other compounds produced in very small quantities, some of which are considered to be toxic. http://www.centreforenergy.com/glossary.asp?EnergyType=1&;Template=1,1
Formation - a series of rocks with certain characteristics in common. http://dictionary.reference.com/browse/formation
Fracture - A crack or surface of breakage within rock not related to foliation or cleavage in metamorphic rock along which there has been no movement. A fracture along which there has been displacement is a fault. When walls of a fracture have moved only normal to each other, the fracture is called a joint. Fractures can enhance permeability of rocks greatly by connecting pores together, and for that reason, fractures are induced mechanically in some reservoirs in order to boost hydrocarbon flow.
Fractures may also be referred to as natural fractures to distinguish them from fractures induced as part of a reservoir stimulation or drilling operation. In some shale reservoirs, natural fractures improve production by enhancing effective permeability. In other cases, natural fractures can complicate reservoir stimulation. http://www.glossary.oilfield.slb.com/Display.cfm?Term=fracture
Gas cap - A layer of free gas on top of the oil zone in an underground reservoir. http://www.centreforenergy.com/glossary.asp?EnergyType=1&;Template=1,1
Gas-oil ratio or GOR – The ratio of the volume of gas produced from a zone in a well in a given period by the volume of oil produced from that same zone in the same period of time.
Habendum clause - In an oil and gas lease, this clause fixes the duration of the lessee's interest in both a primary and secondary term. It is also refered to as a term clause. http://www.oil-gas-leases.com/oil-gas-lease-terms.html
Horizontal drilling - Drilling horizontally through a reservoir to increase the exposure of the formation to the well. http://www.centreforenergy.com/glossary.asp?EnergyType=1&;Template=1,1
Hydrocarbons - Naturally occurring organic compounds containing only carbon and hydrogen. Hydrocarbons can be as simple as methane [CH4], but many are highly complex molecules, and can occur as gases, liquids or solids. The molecules can have the shape of chains, branching chains, rings or other structures.
In-situ - In its original place; in position; in-situ recovery refers to various methods used to recover deeply buried bitumen deposits, including steam injection, solvent injection and firefloods. http://www.ic.gc.ca/eic/site/ogt-ipg.nsf/eng/dk00048.html
Joint Operating Agreement - A contract between co-tenants or separate owners of oil and gas properties being jointly operated. It is an agreement between two owners or among several concurrent owners for the operation of a leasehold for oil, gas, or other minerals. The agreement calls for the development of the lease or the premises by one of the parties to the agreement, who is designated as operator or unit operator for the joint account. All parties share in the expenses of the operations and in the proceeds resulting from the development. http://www.oilandgasiq.com/glossary/joint-operating-agreement/
Joint venture - A business undertaking in which the parties in the agreement share control, profit, losses, and liability. http://www.oil-gas-leases.com/oil-gas-lease-terms.html
Land - In the petroleum industry, "land" often refers to the oil and gas rights on a particular area of land. For example, in a "land sale," the oil and/or gas rights are "sold" (although in reality the rights are leased). http://www.centreforenergy.com/glossary.asp?EnergyType=1&;Template=1,1
Landman - A member of the exploration team whose primary duties are formulating and carrying out exploration strategies and managing an oil company's relations with its landowners and partners, including securing and administering oil and gas leases and other agreements. http://www.ic.gc.ca/eic/site/ogt-ipg.nsf/eng/dk00048.html
Lease agreement - A legal document executed between a mineral owner who is the lessor and a company or individual who is the lessee whereby the mineral owner grants the right to search for oil or gas for a certain period of time (the primary term) to the lessee and the right to develop and produce any minerals found for so long as they are capable of being produced.
Lessee – An organization or individual who obtains certain rights to a mineral owner’s minerals pursuant to a lease agreement.
Lessor - The fee simple owner or mineral rights owner who allows an individual or organization to explore for and produce oil and gas from the mineral rights that he owns pursuant to a lease agreement.
m3 –A cubic meter – the standard reporting unit for crude oil and natural gas liquids volumes in Canada. Hydrocarbon liquid volumes reported in metric m3 may be converted to imperial (barrels or Bbl) by multiplying the metric volume by 6.29.
Meridian - one of the imaginary lines joining the north and south poles. http://dictionary.reference.com/browse/meridian?s=t
Mineral owner - The owner of the rights and interests in a mineral estate, such as oil and gas.
Mineral rights - The rights to explore for and produce the resources below the surface. In the petroleum industry, mineral rights can also be referred to as “land.” http://www.centreforenergy.com/glossary.asp?EnergyType=1&;Template=1,1
Natural Gas - A naturally occurring mixture of hydrocarbon gases that is highly compressible and expansible. Methane [CH4] is the chief constituent of most natural gas (constituting as much as 85% of some natural gases), with lesser amounts of ethane [C2H6], propane [C3H8], butanes [C4H10] and pentane [C5H12]. Impurities can also be present in large proportions, including carbon dioxide, helium, nitrogen and hydrogen sulfide. http://www.glossary.oilfield.slb.com/Display.cfm?Term=natural%20gas
Non-Associated Gas - Natural gas which, prior to human disturbance of the subsurface pool in which it is found, exists in isolation without any association with petroleum.
Operator - The company or individual responsible for managing an exploration, development or production operation. http://www.capp.ca/library/glossary/Pages/default.aspx
Paid-up lease - An oil and gas lease that is paid up through the primary term. The delay rentals which would otherwise be payable during the primary term are included with the bonus consideration at the time the bonus is paid.
Permeability - The capacity of a substance (such as rock) to transmit a fluid, such as crude oil, natural gas, or water. The degree of permeability depends on the number, size, and shape of the pores and/or fractures in the rock and their interconnections. It is measured by the time it takes a fluid of standard viscosity to move a given distance. The unit of permeability is the Darcy. http://www.centreforenergy.com/glossary.asp?EnergyType=1&;Template=1,1
Petroleum - A complex solution or mixture consisting primarily of hydrocarbons, but which may also include other compounds, which was liquid in the pool from which it was recovered prior to human disturbance of that pool.
Pool - A natural underground reservoir containing, or appearing to contain, an accumulation of oil or gas or both and separated, or appearing to be separated from any other such accumulation. http://www.ercb.ca/actregs/ogc_act.pdf
Pooling agreement - When the boundaries of two or more oil or gas leases do not coincide with the drill spacing unit, then a pooling agreement is needed among the lease holders before the regulatory authority will grant a drill permit. http://www.centreforenergy.com/glossary.asp?EnergyType=1&;Template=1,1
Pores - Pores are defined as the minute or microscopic voids in porous rock. Rocks containing pores are able to hold oil, gas and water. If the pores are interconnected, the rock is permeable and is called as a good reservoir rock. Pore space determines the amount of space available for storage of fluids. http://www.oilandgasiq.com/glossary/pores/
Production - The phase of oil and gas operations involved with well fluids extraction, separation, treatment, measurement, etc. It is the operation of bringing the well fluids to the surface and separating them, and storing, gauging, and otherwise preparing product for the pipeline. Also refers to the amount of oil or gas produced over a given period. http://www.oilandgasiq.com/glossary/production/
Pumpjack - A device used to bring oil to the surface by raising and lowering a string of rods connected to a downhole pump. http://www.centreforenergy.com/glossary.asp?EnergyType=1&;Template=1,1
Qualified Ownership - The theory that minerals such as oil and gas cannot be owned in place before they are extracted and reduced to possession. In qualified ownership jurisdictions what the mineral owner owns is the exclusive right to reduce the oil or gas to possession.
Reservoir rock - A place that oil migrates to and is held underground. Sandstone has plenty of room inside itself to trap oil, just like a sponge has room inside of itself to soak up spills in your kitchen. It is for this reason that sandstones are the most common reservoir rocks. Limestones and dolostones, some of which are the skeletal remains of ancient coral reefs, are other examples of reservoir rocks. http://www.oilandgasiq.com/glossary/reservoir-rock/
Royalty - The part of the oil, gas, and minerals or their cash value paid by the lessee to the lessor based on a percentage of the gross production from the property free and clear of all costs except taxes. http://www.oil-gas-leases.com/oil-gas-lease-terms.html
The foregoing is an American definition. In Canada, even when the royalty is referred to as a gross royalty in the lease agreement, royalty is generally not free and clear of all costs except taxes.
Royalty clause - The clause that established the percentage of production paid to the lessor. http://www.oil-gas-leases.com/oil-gas-lease-terms.html
Separator – An apparatus for separating liquid and gas at the surface as they are produced from a well.
Solution gas - Natural gas that is found with crude oil in underground reservoirs. When the oil comes to the surface, the gas expands and comes out of the solution. http://www.capp.ca/library/glossary/Pages/default.aspx
Spacing unit – the area which is allocated from time to time by an oil and gas regulator to a well or wells for the purpose of drilling or producing crude oil or natural gas, or, in the case of a horizontal well for which no area has been allocated, the area or areas which would be allocated to one or more vertical wells drilled on the lands containing the productive horizontal sections of the horizontal wells.
Spudding in - Beginning to drill a well. http://www.centreforenergy.com/glossary.asp?EnergyType=1&;Template=1,1
Surface rights - The rights to areas of land used for well pads, batteries, gas plants and service roads http://www.centreforenergy.com/glossary.asp?EnergyType=1&;Template=1,1
Target area – That part of a drilling spacing unit within which a well drilled for the purpose of producing oil or gas may be completed without reduction of its allowable because of its location.
Trap - A mass of porous, permeable rock – sealed on top and both sides by non-porous, impermeable rock – that halts the migration of oil and gas, causing them to accumulate. http://www.capp.ca/library/glossary/Pages/default.aspx
Unit agreement – An agreement which provides a basis for the allocation of costs and benefits associated with the development, operation or production of oil or gas without regard for separate ownership within an area exceeding the area of a single spacing unit.
Water-oil ratio or WOR – The ratio of the volume of water produced from a zone in a well in a given period by the volume of oil or gas produced from that same zone in the same period of time.

Freehold Petroleum & Natural Gas Owners Association

"Freehold Owners Association"

901, 1000 5th Ave SW, Calgary, AB, T4P 4V1 Telephone: 403-245-4438