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GLOSSARY

 

Bbl.
One stock tank barrel, or 42 U.S. gallons liquid volume, of crude oil or liquid hydrocarbons.
Bcf.
Billion cubic feet of natural gas.
Bcfe.
Billion cubic feet equivalent, determined using the ratio of six Mcf of natural gas to one Bbl of crude oil, condensate, or natural gas liquids.
Bbtu.
One billion British Thermal Units.
Btu.
A British Thermal Unit, or the amount of heat necessary to raise the temperature of one pound of water one degree Fahrenheit.
Condensate.
Liquid hydrocarbons associated with the production of a primarily natural gas reserve.
Developed Acreage.
Acreage that is held by producing wells or wells capable of production.
Development Well.
A well drilled within the proved area of an oil or gas reservoir to the depth of a stratigraphic horizon known to be productive.
Dry Hole; Dry Well.
A well found to be incapable of producing either oil or gas in sufficient quantities to justify completion as an oil or gas well.
Equivalent Volumes.
Equivalent volumes are computed with oil and natural gas liquid quantities converted to Mcf on an
energy equivalent ratio of one barrel to six Mcf.

Exploitation.
Ordinarily considered to be a form of development within a known reservoir.
Exploratory Well.
A well drilled to find a new field or to find a new reservoir in a field previously found to be productive of oil or gas in another reservoir. Generally, an exploratory well is any well that is not a development well or a service well.
Farmout.
An assignment of an interest in a drilling location and related acreage conditional upon the drilling of a well on that location or the undertaking of other work obligations.
Field.
An area consisting of either a single reservoir or multiple reservoirs, all grouped on or related to the same individual geological structural feature and/or stratigraphic condition.
Full Cost Pool.
The full cost pool consists of all costs associated with property acquisition, exploration, and development activities for a company using the full cost method of accounting. Additionally, any internal costs that can be directly identified with acquisition, exploration, and development activities are included. Any costs related to production, general and administrative expense, or similar activities are not included.
Gross Acres or Gross Wells.
The total acres or wells, as the case may be, in which a working interest is owned.
Hydraulic Fracturing.
A process used to stimulate production of hydrocarbons. The process involves the injection of water, sand, and chemicals under pressure into the formation to fracture the surrounding rock and stimulate production.
Lease Operating Expenses.
The expenses of lifting oil or gas from a producing formation to the surface, constituting part
of the current operating expenses of a working interest, and also including labor, superintendence, supplies, repairs, short-lived assets, maintenance, allocated overhead costs, and other expenses incidental to production, but not including lease acquisition or drilling or completion expenses.

Liquids.
Describes oil, condensate, and natural gas liquids.
MBbls.
Thousand barrels of crude oil or other liquid hydrocarbons.
MBoe.
Thousand barrels of crude oil equivalent determined using the ratio of six Mcf of natural gas to one Bbl of crude oil, condensate, or natural gas liquids.
Mcf.
Thousand cubic feet of natural gas.
Mcfe.
Thousand cubic feet equivalent determined using the ratio of six Mcf of natural gas to one Bbl of crude oil, condensate, or natural gas liquids.
MMBtu.
One million British Thermal Units, a common energy measurement.
MMcf.
Million cubic feet of natural gas.
MMcfe.
Million cubic feet equivalent determined using the ratio of six Mcf of natural gas to one Bbl of crude oil, condensate, or natural gas liquids.
NGL.
Natural gas liquids.
Net Acres or Net Wells.
The sum of the fractional working interest owned in gross acres or gross wells expressed in whole numbers and fractions of whole numbers.
NYMEX.
New York Mercantile Exchange.
Productive Wells.
Producing wells and wells that are mechanically capable of production.
Proved Developed Reserves.
Estimated proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.
Proved Reserves.
Quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time. Existing economic conditions include prices that are the average price during the twelve-month period prior to the end of the reporting period, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.
Proved Undeveloped Reserves.
Estimated proved reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recovery to occur.
Reservoir.
A porous and permeable underground formation containing a natural accumulation of producible oil and/or gas that is confined by impermeable rock or water barriers and is individual and separate from other reservoirs.
Standardized Measure or Present Value of Estimated Future Net Revenues.
An estimate of the present value of the estimated future net revenues from proved oil and gas reserves at a date indicated after deducting estimated production and property taxes, future capital costs, operating expenses, and estimated future income taxes. The estimated future net revenues are discounted at an annual rate of 10%, in accordance with the SEC's requirements, to determine their "present value." The present value is shown to indicate the effect of time on the value of the revenue stream and should not be construed as being the fair market value of the properties. Estimates of future net revenues are made using oil and natural gas prices and operating costs at the estimation date in accordance with the SEC's regulations and are held constant for the life of the reserves.
Undeveloped Acreage.
Acreage on which wells have not been drilled or completed to a point that would permit the production of economic quantities of oil or natural gas, regardless of whether such acreage contains proved reserves.
Working Interest.
An operating interest which gives the owner the right to drill, produce, and conduct operating activities on the property, and to receive a share of production.

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Industry Reports AXPC Letter to the Senate Committee on Finance Re: Comments on Proposed Reforms to Cost Recovery Provisions
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Natural Gas: Helping to Ensure Our Energy Future
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V. Bruce Thompson,
President
American Exploration & Production Council
1001 Pennsylvania Avenue, NW
Suite 7205
Washington, DC 20004

(202) 347-7578

E-mail: Info@axpc.us


Melanie Reingardt,
Executive Assistant
American Exploration & Production Council
1001 Pennsylvania Avenue, NW
Suite 7205
Washington, DC 20004

(202) 347-7578

E-mail: MReingardt@axpc.us