10-definitions

Definitions

RESERVES DEFINED
Lundin Petroleum calculates reserves and resources according to 2007 Petroleum Resources Management System (PRMS) Guidelines of the Society of Petroleum Engineers (SPE), World Petroleum Congress (WPC), American Association of Petroleum Geologists (AAPG) and Society of Petroleum Evaluation Engineers (SPEE). Lundin Petroleum’s reserves are audited by ERC Equipoise Ltd. (ERCE), an independent reserves auditor. Reserves are defined as those quantities of petroleum which are anticipated to be commercially recovered by application of development projects to known accumulations from a given date forward under defi ned conditions. Estimation of reserves is inherently uncertain and to express an uncertainty range, reserves are subdivided into Proved, Probable and Possible categories. Unless stated otherwise, Lundin Petroleum reports its Proved plus Probable (2P) reserves and its Proved plus Probable plus Possible (3P) reserves.
Proved reserves
Proved reserves are those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under current economic conditions, operating methods and governmental regulations. Proved reserves can be categorised as developed or undeveloped. If deterministic methods are used, the term reasonable certainty is intended to express a high degree of confidence that the quantities will be recovered. If probabilistic methods are used, there should be at least a 90 percent probability that the quantities actually recovered will equal or exceed the estimates.
Probable reserves
Probable reserves are those unproved reserves which analysis of geological and engineering data indicate are less likely to be recovered than Proved reserves but more certain to be recovered than Possible reserves. It is equally likely that actual remaining quantities recovered will be greater than or less than the sum of the estimated 2P reserves. In this context, when probabilistic methods are used, there should be at least a 50 percent probability that the actual quantities recovered will equal or exceed the 2P estimate.
Possible reserves
Possible Reserves are those additional reserves which analysis of geoscience and engineering data suggest are less likely to be recoverable than Probable reserves. The total quantities ultimately recovered from the project have a low probability to exceed the sum of 3P reserves, which is equivalent to the high estimate scenario. In this context, when probabilistic methods are used, there should be at least a 10 percent probability that the actual quantities recovered will equal or exceed the 3P estimate.
RESOURCES DEFINED
Contingent resources
Contingent resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, by application of development projects, but which are not currently considered to be commercially recoverable due to one or more contingencies. 2C is the best estimate of the quantity that will actually be recovered from the accumulation by the project. It is the most realistic assessment of recoverable quantities if only a single result were reported. If probabilistic methods are used, there should be at least 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate. Unless stated otherwise, Lundin Petroleum reports its 2C contingent resources.
Prospective resources
Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and chance of development.
OIL RELATED TERMS AND MEASUREMENTS
bblBarrel Volume measurement. One Barrel=159 litres.
bcBarrel of Condensate
bcfBillion Cubic Feet
bcpdBarrels of Condensate Per Day
boBarrel of Oil Volume measurement. One Barrel=159 litres.
boeBarrels of Oil Equivalents Natural gas converted to barrels of oil equivalemts, 6 mcf=1boe. The conversion rate is approximative since the relation may vary.
bopdBarrels of Oil Per Day
cfCubic Feet Volume measurement. One Cubic Foot=0.028m3
cfpdCubic Feet Per Day
MboThousand Barrels
MboeThousand Barrels of Oil Equivalents
MboepdThousand Barrels of Oil Equivalents Per Day
MbopdThousand Barrels of Oil Per Day
McfThousand Cubic Feet
McfpdThousand Cubic Feet Per Day
MMboMillion Barrels
MMboeMillion Barrels of Oil Equivalent
MMcfMillion Cubic Feet
MMcfpdMillion Cubic Feet Per Day
MMscfpdMillion Standard Cubic Feet Per Day (refers to gas or residual gas production).
OOIPOriginal-Oil-In-Place, expressing the total volume of oil originally in the reservoir in stock tank barrels (STB)
ppgPounds per gallon (lb/GAL). A unit indicating specific weight (weight density)
psigPounds per square inch (gauge)
stbA barrel volume of a fluid at standard (stock tank) conditions
TcfTrillion Cubic Feet

OIL RELATED TERMS AND MEASUREMENTS
AcidizingInjection of various acids into perforations, fractures, and reservoir rock permeability to remove contaminants and the effect of wellbore damage caused by drilling and completion operations or to increase permeability beyond the original values which existed prior to disturbing the reservoir by drilling.
AnticlineThe peak or high elevation of folded, layered sedimentary rocks resulting from geologic activity (folds concave downward)
APIDensity measure in degrees of a liquid hydrocarbon (crude oil of condensate) which is inversely proportional to its specific gravity.i.e. the higher the API Gravity. The lower the Specific Gravity and vice versa.
Appraisal wellWells drilled after hydrocarbon presence has been identified with the drilling of the wildcat well, to define the reservoir or delineate the geology (also referred to as delineation wells)
Artificial liftA system of enhancing the flow rate of hydrocarbons up the production tubing by reducing the well-bore pressure
Associated gasThe hydrocarbon gas produced at the surface with the hydrocarbon liquid; also referred to as solution gas or dissolved gas.
BariteA mineral ore added to mud to increase its density.
BasinA depression of large size in which sediments have accumulated
BentoniteA clay mineral often used to make drilling mud.
BitDevice used in the drilling operation for fracturing, abrading, or shearing the rock.
BlockAgreement entered into with a host country granting the company the right to explore and produce oil and gas in a designated area, in return for paying to the government licence fees and royalties on production. (Also referred to as Concession(s) or Licence(s)).
BlowoutThe result of a loss of control of downhole reservoir fluid pressures, resulting in uncontrolled release of subsurface fluids to the surface or, in the case of a downhole blowout, uncontrolled flow between downhole reservoirs.
BOP system(Blow Out Prevention) High pressure valve, associated activation and control equipment fitted to the top of the casing to prevent blowouts.
BrentThe primary crude pricing marker for UK and Europe.
CasingSteel pipe run into the wellbore after drilling, to serve various functions such as isolation of the wellbore from downhole pressures, contaminating or undesirable fluids, zones of lost circulation, regions of wellbore washout, and to provide surface protection from downhole contaminants. In general, the casing provides control of the downhole environment.
ChokeThe flow orifice in the Christmas tree (wellhead) or BOP stack by which volume flow rate and flowing bottomhole pressure is controlled by surface manipulation of the choke size. The choke may be a variable or fixed (bean) choke.
Christmas treeA surface flow control system that, as a part of the wellhead, contains the master valve, the choke, and other flow control and access valves relative to the production system for that particular well. A Christmas tree has an ornamentation appearance of the valves and various plumbing connections and is also referred to as the production tree.
ConcessionAgreement entered into with a host country granting the company the right to explore and produce oil and gas in a designated area, in return for paying to the government licence fees and royalties on production. (Also referred to as Block(s) or Licence(s)).
CondensateLiquid hydrocarbon which is usaually in a gas phase at reservoir condition.
ConductorLarge diameter pipe/casing inserted into the initial drilling hole to stabilise the hole, and to which the BOP stack is attached.
CoreA cylindrical sample of subsurface rock taken during the drilling operation and returned to the surface for analysis in order to obtain properties of downhole rock and fluid systems.
Cost oilA share of oil produced used to cover ongoing operations costs and to recover past exploration, appraisal and development expenditures.
CretaceousA period in geological history from about 65 to 141 million years ago.
CuttingsFragments of rock removed from a well during drilling operations.
DarcyA unit used to measure permeability.
DecommissioningRemoval of facilities from depleted oil field.
DerrickThe drilling structure itself, which supports the drilling/hoisting system.
DerrickmanThe person who is second in command of the drilling crew.
Development wellsWells drilled according to a predetermined pattern to maximize production from the hydrocarbon reservoir, within economic limits, over a reasonable lifetime of production. Drilling is based on the reservoir development plan as prepared from information obtained during various exploration processes such as seismic surveys, geologic analysis, and from drilling the wildcat and appraisal wells. These development wells include not only producing oil and gas wells, but also wells such as gas and water injection wells which may be used to enhance recovery of the hydrocarbon. Within the development plan, selected producing wells may be converted to injection wells at specified times during the production history of the reservoir.
Dew pointThe temperature at which a liquid starts to seperate out of a gas when it is cooled.
Directional drilling (deviated)A well drilled at an angle from the vertical by deviating the drill bit. Directional wells can be used to drill multiple wells from a common drilling pad or to reach a subsurface location beneath land where drilling cannot be done.
DrillerThe person in charge of the crew and who operates the equipment that controls drilling.
Drill pipeHigh grade steel pipe providing the closed flow system, through which torque is transmitted from the surface to the drill collars and therefore to the drill bit for rotation, in conventional rotary drilling. Typical drill pipe joints are 30 ft in length.
Drilling rigThe complete drilling system, including the derrick, substructure, engines, pumps, blowout prevention system, drill pipe, drill collar and other necessary accessories for the drilling operation. The drilling rig moves as a complete system from one well to the next. The only accessories changed will be those for that particular well, such as drill bits and drilling fluid additives.
Drill stringThe drilling system suspended from the hoisting system into the wellbore, including drill bit, drill collars, drill pipe, kelly, swivel, and any other components or accessories within the drillstring, such as stabilizers, shock absorbers, jars, reamers, bit sub, etc.
Dry holeAn exploratory or development well that does not find commercial quantities of hydrocarbons.
DSTDrill stem test, open hole or cased hole short term production test of well.
E&PExploration and Production (“upstream” sector of the oil and gas industry).
EPSAExploration Production Sharing Agreement
ESCExploration Service Contract
FaultA fracture within rock structures where relative motion has occurred across the fracture surface.
Farm inWhere a company joins a joint venture in return for paying for future (and sometimes past) joint venture operations.
Farm outA commercial transaction where a company sells a share in a concession in return for some consideration.
FPSOFloating production storage and offloading vessel
Frac jobA method of stimulating a well by pumping liquid under high pressure into the reservoir to fracture the reservoir rock with the aim of improving the well flow rate.
FSOFloating storage and offloading vessel
Gas in placeThe total volume of gas originally in the reservoir
Gas liftA technique which increases the rate of flow from a well by injecting natural gas into the liquids in the production tubing.
Gas saturationThe percentage of the reservoir rock porosity containing hydrcarbon gas at reservoir conditions
GeophoneThe recorder used to indicate arrival of seismic disturbances at a particular location. Geophones are normally used as the recorders for onshore seismic operations.
GOR
(Gas Oil Ratio)
The number of cubic feet of natural gas produced with each barrel of oil.
Heavy oilA dense viscous oil with a proportion of bitumen, which is difficult to extract with conventional techniques and is more expensive to refine.
Horizontal drillingDrilling a well that deviates from the vertical and travels horizontally through a prospective reservoir.
HydrocarbonsNaturally occurring organic substances composed of hydrogen and carbon. They include crude oil, natural gas and natural gas condensate.
Hydrocarbon trapA reservoir rock with hydrocarbon present in the porosity. Hydrocarbon is confined to the reservoir by rock with zero permeability, preventing migration from the reservoir rock.
HydrophoneThe recorder used to monitor time of travel of offshore seismic disturbances.
Injection wellsWells to be used for injection of fluids into reservoir for enhancement of hydrocarbon recovery.
JacketThe steel structure of an offshore platform
Jack-up rigMoble offshore drilling rig with retractable legs which rest on the seabed when the rig is operational.
Joint ventureGroup of companies which jointly holds 100% interest in a given concession.
JurassicA period in geological history from about 141 to 195 million years ago.
Kelly bushingThe kelly runs through the kelly bushing which is fitted in the rotary table and provides the means of rotating the drillstring and hence the drill-bit.
LicenceAgreement entered into with a host country granting the company the right to explore and produce oil and gas in a designated area, in return for paying to the government licence fees and royalties on production. (Also referred to as Block(s) or Concession(s)).
LNGLiquified natural gas (pure Methane)
LogsThe result of surveys which gather information from the wellbore and surrounding formations which typically consist of traces and curves. These can be interpreted to give information about oil, gas and water.
LPGLiquified petroleumn gas (mixture of Propane & Butane)
MagnetotelluricMagnetotelluric (MT) is a geophysical method using electromagnetic waves to measure the resistivities of subsurface rock formations at depths between surface and several kilometres. In complex thrusted areas it complements seismic to produce an interpretation of the subsurface. Both methods are combined to map drillable prospects.
MUDLiquid drilling fluid circulated down the drill pipe and up the annulus during drilling operations to remove cutting cool and lubricate the bit and maintain a desired pressure in the well.
MWD
(Measurement Whilst drilling)
A real time log taken from sensors located in the bottom of the drillstring.
Natural gasHydrocarbon gas
NCSNorwegian Continental Shelf
NGL
(Natural Gas Liquids)
Hydrocarbon liquids consisting predominantly of liquified ethane, propane, butane, pentane, and pentane plus.
NYMEXNew York Mercantile Exchange
Oil saturationThe percentage of the void space within reservoir rock containing hydrocarbon liquid at reservoir conditions (reservoir fluid pressure and reservoir fluid temperature conditions)
Oil in placeThe total volume of oil originally in the reservoir
OPECOrganization of Petroleum Exporting Countries
OperatorMember of a joint venture designated to carry out all activities and operations on behalf of of the joint venture.
PackerA cylinder of rubber like material used to hold a tubing string central in the well, seperating and sealing the sections of the well above and below the packer.
Pay zoneThe section of the reservoir that contributes to production.
P & APlugged & Abandonned. A depleted or dry well that has been filled with cement with all surface equipment removed.
Paying interestThe cost-bearing interest arising out of the obligation to bear initialexploration, appraisal and development costs on behalf of a partner. The difference between the paying interest and the working interest will be recovered out of the partner’s share of oil produced.
PermeabilityThe property of a rock which indicates the presence of flow channels within the rock. The greater the permeability, the greater the presence of those flow channels, and the more easily fluid will flow from the rock.
PetroleumRock oil or “oil produced from rock” (from Latin)
PorosityThe percentage of the total volume (bulk volume) of the rock which is void space
Pressure testA pressure test run in a well, where flow is initiated followed by a shut-in period where the time rate of pressure increase is recorded after shut-in. The data are analyzed for determination of various downhole and reservoir properties and characteristics.
Profit oilThe remaining share of oil produced after cost recovery through the cost oil. The profit oil is shared according to the production sharing agreement and working interests.
Probable reservesProbable reserves are those unproved reserves which analysis of geological and engineering data suggests are more likely than not to be recoverable. In this context, when probablistic methods are used, there should be at least a 50% probability that the quantities actually recovered will equal or exceed the sum of estimated proved plus probable reserves.
ProspectA geographical area which exploration has shown contains sedimentary rocks & structures that may be favourable for the presence of oil or gas.
Proved reservesProved reserves are those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known resevoirs and under current economic conditions, operating methods and governmental regulations. Proved reserves can be categorised as developed or undeveloped. If deterministic methods are used, the term reasonable certainty is intended to express a high degree of confidence that the quantities will be recovered. If probablistic methods are used, there should be at least a 90% probability that the quantities actually recovered will equal or exceed the estimates.
PSCProduction Sharing Contract
PVT analysisPressure-volume-temperature analysis of a sample of fluid collected from a subsurface fluid reservoir at the datum depth.
Reservoir rockThe sedimentary rock within which hydrocarbon can be stored as a result of the presence of porosity and from which hydrocarbon can be produced as the result of the presence of permeability
ROPRate of penetration during the drilling operation. Usually expressed in fph (feet per hour or ft/hr).
Rotary tableThat component in the plane of the drilling rig floor to which the drilling rig power system supplies the necessary power to impart rotation to the rotary table and therefore to the kelly bushing, kelly and drillstring.
RoughneckA member of the drilling crew who operates equipment.
RoustaboutA member of the drilling crew who helps bring supplies and equipment to the rig.
SealAn impermeable rock (usually claystone or shale) which prevents the passage of hydrocarbons.
SeismicA method of geophysical prospecting involving the interaction of sound waves and buried rocks.
Semi-submersible rigFloating mobile drilling rig with submerged pontoons to stabilise while operating. Kept in position by anchors or dynamic positioning.
SidetrackTo deviate from the original direction of a well.
SourGas or oil with high sulphur content.
Source rockThe geological formation in which oil, gas and/or other minerals originate.
SpudTo initiate drilling
StratigraphyThe study of the origin, chronology, composition, and distribution of layered or stratified rocks in the subsurface.
TDTotal Depth (refers to the final depth of a well)
TopsidesThe top part of a platform positioned on top of the jacket
Tight holeA well whose results are being kept confidential.
UKCSUnited Kingdom Continetal Shelf
UnconformityA geologic discontinuity over a surface resulting from removal of previously existing rocks by the process of erosion. The unconformity indicates a discontinuity in the geological time record.
Upstream industryThose operations within the industry to the point where the produced resource is metered into the transportation system. This includes Exploration and Production.
Water cutWater that is produced together with oil.
WAater saturationThe percentage of the porosity of the reservoir rock containing water at reservoir conditions (reservoir fluid pressure and reservoir fluid temperature conditions). The water present in the reservoir rock porosity is normally salt water. However, since the salt is dissolved within the water, forming a solution. The salt is not considered separately. The expression for the water saturation is therefore normally actually an expression of salt-water saturation.
WellheadThe surface equipment attached at the surface to a cemented casing string, to control (within limits) downhole and reservoir production properties. The wellhead includes the casingheads, tubing head, and Christmas tree.
Wellhead completionFinal preparations in preparing the well to fulfill its intended function (eg. producer / water injection / gas injection). Final completion operations include running casing, attaching wellhead, perforating and any stimulation operations such as acidising.
Wildcat wellThe first well to be drilled in a geographic region. The extent of that region will be based on available information.
Working interestInterest retained by the company in a given concession after joint venture or other agreements have been executed and includes interests held by both wholly owned and partially ownded subsidiaries
WorkoverThe re-entry of a well in order to affect a repair or modification.
WTIWest Texas Intermediate – the primary crude pricing marker for North America

CURRENCY ABBREVIATIONS
MSEKMillion Swedish Kronor
TSEKThousand Swedish Kronor
USDUS Dollar
CHFSwiss Franc
EUREuro
GBPBritish Pound
NOKNorwegian Krone
RURRussian Rouble
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