Investor Resources

The space between (1) The casing and the wall of the borehole. (2) Two strings of casing. (3) Tubing and casing.

A unit of volume measurement used for petroleum and its products (7.3 barrels = 1 ton: 6.29 barrels = 1 cubic meter).

One barrel of oil; 1 barrel = 35 Imperial gallons (approx.), or 159 liters (approx.); 7.5 barrels = 1 ton (approx.); 6.29 barrels = 1 cubic meter.

Billion cubic feet; 1 bcf = 0.83 million tons of oil equivalent

Billion cubic meters (1 cubic meter = 35.31 cubic feet).

Condensate and gas are produced simultaneously from the outset of production.

When well pressure exceeds the ability of the wellhead valves to control it. Oil and gas “blow wild” at the surface.

The hole is drilled by the drill bit.

Pipe cemented in the well to seal off formation fluids or keep the hole from caving in.

The steel tubing that lines a well after it has been drilled. It is formed from sections of steel tubes screwed together.

The assembly of fittings and valves on the top of the casing, which controls the production rate of oil

An oil and gas field can produce enough net income to make it worth developing.

The installation of permanent wellhead equipment for oil and gas production.

Hydrocarbons in the gaseous state under reservoir conditions become liquid when temperature or pressure is reduced—a mixture of pentanes and higher hydrocarbons.

Taking rock samples from a well using a unique tool — a “core barrel.”

The drill bit cuts rock chips from the formation and brings them to the surface with the mud. Geologists used them to obtain formation data.

The development phase is when a proven oil or gas field is brought into production by drilling production (development) wells.

(1)To bore a hole, Also see Drilling (2)An implement with cutting edges used to bore holes.

The using of a rig and crew for the Drilling, suspension, completion, production testing, capping, plugging and abandoning, deepening, plugging back, sidetracking, redrilling or reconditioning of a well (except routine cleanout and pump or rod pulling operations) or the converting of a well to a source, injection, observation, or producing well, and including stratigraphic tests. It also includes any related environmental studies. Associated costs include completion costs but do not include equipping costs.

A drilling unit not permanently fixed to the seabed, e.g., a drillship, a semi-submersible, or a jack-up unit. It also means the derrick and its associated machinery.

A well that has proved to be non-productive.

Abbreviation for exploration and appraisal.

Abbreviation for exploration and production.

Drilling is carried out to determine whether hydrocarbons are present in a particular area or structure.

The phase of operations that covers the search for oil or gas by carrying out detailed geological and geophysical surveys followed up where appropriate by exploratory Drilling.

A geographical area under which an oil or gas reservoir lies.

The volume of gas at atmospheric pressure produced per unit of oil built.

A compound containing only the elements hydrogen and carbon. It may exist as a solid, a liquid, or a gas. The term is mainly used in a catch-all sense for oil, gas, and condensate.

Oilfield or naturally occurring gas, chiefly methane, liquefied for transportation.

Light hydrocarbon material, gaseous at atmospheric temperature and pressure, held in the liquid state by pressure to facilitate storage, transport, and handling. Commercial liquefied gas consists of propane, butane, or mixtures.

A mixture of base substance and additives used to lubricate the drill bit and counteract the formation’s natural pressure.

Enacted on November 9, 1978, and became effective December 1, 1978. The Act has been amended and replaced or amended the Natural Gas Act. Refer to 15USC 3301-3432.

Natural gas liquids. Liquid hydrocarbons are found in association with natural gas.

A mixture of liquid hydrocarbons of different molecular weights.

A geographic area under which an oil reservoir lies.

The company that has the legal authority to drill wells and undertake the production of hydrocarbons that are found. The Operator is often part of a consortium and acts on behalf of this consortium.

A generic name for hydrocarbons, including crude oil, natural gas liquids, natural gas and their products.

An offshore structure that is permanently fixed to the seabed.

An unrelated third party (i.e., Exeter 1031 Exchange Services, LLC) that administers the tax-deferred, like-kind exchange transaction to facilitate the disposition of the Investor’s relinquished property and the acquisition of the Investor’s like-kind replacement property. The Intermediary has no economic interest except for any compensation (exchange fee) it may receive for acting as an Intermediary in facilitating the exchange as defined in Section 1031 of the Internal Revenue Code. The Intermediary is technically called the Qualified Intermediary but is also known as the Accommodator, Facilitator, or Intermediary.

A trust or association that invests in various real estate investment assets.

REITs are managed by one or more trustees, like a mutual fund, and trade like a stock. The trust pays no federal income tax if at least 75% of the income is real-estate related and 95% is distributed to investors.

Individual investors can be taxed.

Return on Investment

A working interest in an oil or gas property held by the taxpayer directly or through an entity that does not limit the taxpayer’s liability is not treated as a passive activity, whether or not the taxpayer materially participates in the activity. Thus, an owner of a working interest in oil or gas property can deduct otherwise allowable losses attributable to the active interest against other income without limitation under the passive loss rule.

That portion of an oil investment is deductible for tax purposes. All intangibles are deductible.