Acquisition: The procurement of the legal right to explore for and produce discovered minerals, if any, within a specific area; that legal right may be obtained by mineral lease, concession, or purchase of land and mineral rights, or of mineral rights alone.

Acquisition Costs: Direct costs and indirect costs incurred to acquire legal rights to wasting natural resources. Direct costs include costs incurred to obtain options to lease or purchase general rights and costs incurred for the actual leasing (e.g., lease bonuses) or purchasing of the rights. Indirect costs include such costs as: brokers' commissions and expenses; abstract and recording fees; filing and patenting fees; and costs of legal examination of title and documents.

Acreage: An area, measured in acres, that is subject to ownership or control by those holding total or fractional shares of working interests. Acreage is considered developed when development has been completed. (See definition for Working Interest.) A distinction may be made between "gross" acreage and "net" acreage:

·         Gross. All acreage covered by any working interest, regardless of the percentage of ownership in the interest.

·         Net. Gross acreage adjusted to reflect the percentage of ownership in the working interest in the acreage.

Affiliate: An entity that is directly or indirectly owned, operated, or controlled by another entity. See Firm.

Amortization: The depreciation, depletion, or charge-off to expense of intangible and tangible assets over a period of time. In the extractive industries, the term is most frequently applied to mean either (1) the periodic charge-off to expense of the costs associated with nonproducing mineral properties incurred prior to the time when they are developed and entered into production or (2) the systematic charge-off to expense of those costs of productive mineral properties (including tangible and intangible costs of prospecting, acquisition, exploration, and development) that had been initially capitalized (or deferred) prior to the time the properties entered into production, and thereafter are charged off as minerals are produced.

Avg. Daily Maximum Demand: Each day, there is a maximum amount of demand for electric power by the end-users. An average of the daily maximums can be calculated for whatever period of time desired, a month, a quarter, a year, etc.

Base(cushion) gas: The volume of gas needed as a permanent inventory to maintain adequate reservoir pressures and deliverability rates throughout the withdrawal season. All native gas is included in the base gas volume.

Black Lung Benefits: In the content of the coal operation statement of income, this term refers to all payments, including taxes, made by the company attributable to Black Lung.

Bottom-Hole Contribution: A payment (either in cash or in acreage) that is required by agreement when a test well is drilled to a specified depth regardless of the outcome of the well and that is made in exchange for well and evaluation data. (See definitions for Dry Hole Contribution and Test Well Contribution).

Branded Product: A refined petroleum product sold by a refiner with the understanding that the purchaser has the right to resell the product under a trademark, trade name, service mark, or other identifying symbol or names owned by such refiner.

Capacity, Coal: (Same as "practical potential" used on Form EIA-7). The highest level of output under realistic conditions. Assume availability of labor and materials sufficient to utilize machinery and equipment in place and ready to use during the year. Take into account the additional downtime for maintenance or repair which would be required. Do not consider added costs (additional personnel, overtime pay, materials, repairs, etc.) to be limiting factors on potential.

Capacity, Distribution: This is the capacity of the natural gas and electric power distribution-related delivery assets.

Capacity, Refining: The measure of capacity used on Schedule 5242 is adopted from the Form EIA-800, Annual Refinery Report.

Barrels Per Calendar Day: Represents the maximum number of barrels of input to crude oil processing units that can be processed in an average 24 hour period after making allowances for downstream limitations, environmental constraints, types and grades of inputs, planned and unplanned downtime, and types and grades of products. The calculation should be based upon the daily capacities available throughout the year. For example, a 100 M barrel per day capacity refinery, which was shut down for 4 months, would be expressed as 67 M barrels.

Capacity Statistics: Data concerning the capacity of energy-related assets to produce and/or deliver products.

Carrying Costs: Costs incurred in order to retain exploration and property rights after acquisition but before production has occurred. Such costs include legal costs for title defense, ad valorem taxes on non-producing mineral properties, shut-in royalties, and delay rentals.

Chemical Operations: All chemical operations.

Christmas Tree: The valves and fittings installed at the top of a gas or oil well to control and direct the flow of well fluids.

Circuit: A conductor or a system of conductors through which electric current flows.

Circuit-Mile: The total length in miles of separate circuits regardless of the number of conductors used per circuit.

Coal Gasification: The process of converting coal into gas. The basic process involves crushing coal to a powder, which is then heated in the presence of steam and oxygen to produce a gas. The gas is then refined to reduce sulfur and other impurities. The gas can be used as a fuel or processed further and concentrated into chemical or liquid fuel.

Coal Liquefaction: A chemical process that converts coal into clean-burning liquid hydrocarbons, such as synthetic crude oil and methanol.

Coal, Nuclear, and Non-conventional: An FRS Line of Business that includes the mining/extraction of Coal, Nuclear fuel, and other Non-conventional energy sources.

Cogeneration: The production of electrical energy and another form of useful energy (such as heat or steam) through the sequential use of energy.

Coincident Maximum Demand: The amount of electric power demanded by electric power customers at a specific time of day, on a specific day, within a period of time (normally 12 months) when the demand is the highest for the 12-month period.

Combined-Cycle Generation: System for generating electricity by use of a gas turbine and a steam turbine in tandem.

Commercial Sector: An energy-consuming sector that consists of service-providing facilities and equipment of: businesses; Federal, State, and local governments; and other private and public organizations, such as religious, social, or fraternal groups. The commercial sector includes institutional living quarters. It also includes sewage treatment facilities. Common uses of energy associated with this sector include space heating, water heating, air conditioning, lighting, refrigeration, cooking, and running a wide variety of other equipment.

Company Automotive (retail) Outlet: Any retail outlet selling motor fuel under the brand name of a company reporting in the EIA Financial Reporting System. See Company-lessee automotive outlet, Company-open automotive outlet, and Company-operated automotive outlet.

Company: See Firm.

Company-Lessee Automotive Outlet: One of three types of company automotive (retail) outlets. This type of outlet is operated by an independent marketer who leases the station and land and has use of tanks, pumps, signs, etc. A lessee dealer typically has a supply agreement with a refiner or a distributor and purchases products at dealer tank wagon prices. The term includes outlets operated by commissioned agents and is limited to those dealers who are supplied directly by a refiner or any affiliate or subsidiary company of a refiner.

Company-Open Automotive Outlet: One of three types of company automotive (retail) outlets. This type of outlet is operated by an independent marketer who owns or leases (from a third party that is not a refiner) the station or land of a retail outlet and has use of tanks, pumps, signs, etc. An open dealer typically has a supply agreement with a refiner or a distributor and purchases products based on either rack or dealer tank wagon prices.

Company-Operated Automotive Outlet: One of three types of company automotive (retail) outlets. This type of outlet is operated by salaried or commissioned personnel paid by the reporting company.

Condensate (Lease Condensate): A natural gas liquid recovered from associated and nonassociated gas wells from lease separators or field facilities, reported in barrels of 42 U.S. gallons at atmospheric pressure and 60EF. For FRS reporting, condensate that is commingled with the crude oil stream should be reported as crude (see definition for Crude Oil), otherwise it is reported as a plant product (see Plant Products).

Contribution to Net Income: The FRS segment equivalent to net income. However, some consolidated items of revenue and expense are not allocated to the segments, and therefore they are not equivalent in a strict sense. The largest item not allocated to the segments is interest expense since this is regarded as a corporate-level item for FRS purposes.

Crude Oil: A mixture of hydrocarbons that exists in liquid phase in natural underground reservoirs and remains liquid at atmospheric pressure after passing through surface separating facilities. Depending upon the characteristics of the crude stream, it may also include:

1.        Small amounts of hydrocarbons that exist in gaseous phase in natural underground reservoirs but are liquid at atmospheric pressure after being recovered from oil well (casinghead) gas in lease separators and are subsequently commingled with the crude stream without being separately measured. Lease condensate recovered as a liquid from natural gas wells in lease or field separation facilities and later mixed into the crude stream is also included;

2.        Small amounts of nonhydrocarbons produced with the oil, such as sulfur and various metals;

3.        Drip gases, and liquid hydrocarbons produced from tar sands, gilsonite, and oil shale.

Liquids produced at natural gas processing plants are excluded. Crude oil is refined to produce a wide array of petroleum products, including heating oils; gasoline, diesel and jet fuels; lubricants; asphalt; ethane, propane, and butane; and many other products used for their energy or chemical content.

DD&A: Abbreviation for depreciation, depletion, and amortization.

Deferred Taxes: Taxes accrued and reflected as an expense in a company's income statement, but not payable to the taxing authority in that time period. These taxes are accrued to compensate for an understatement of income tax expense which would occur if only the tax currently due to taxing authority were reflected as the total income tax expense.

Delay Rental: A payment that commonly is required annually by the lease contract to be paid by a lessee if commercial production has not yet been obtained in lieu of the lessee's performing specified work on the leased property according to the terms of the mineral lease. Failure to pay the delay rental normally terminates the lease with no penalty to the lessee.

Depletion: A term for either (1) a periodic assignment to expense of recorded amounts or (2) an allowable income tax deduction that is related to the exhaustion of mineral reserves. Depletion is included as one of the elements of amortization. When used in that manner, depletion refers only to book depletion. (See definition for Amortization.)

·         Book. The portion of the carrying value (other than the portion associated with tangible assets) prorated in each accounting period, for financial reporting purposes, to the extracted portion of an economic interest in a wasting natural resource.

·         Tax-cost. A deduction (allowance) under U.S. Federal income taxation normally calculated under a formula whereby the adjusting basis of the mineral property is multiplied by a fraction, the numerator of which is the number of units of minerals sold during the tax year and the denominator of which is the estimated number of units of unextracted minerals remaining at the end of the tax year plus the number of units of minerals sold during the tax year.

·         Tax-percentage (or Statutory). A deduction (allowance) allowed to certain mineral producers under U.S. Federal income taxation calculated on the basis of a specified percentage of gross revenue from the sale of minerals from each mineral property not to exceed 100 percent of the taxable income from the property computed without allowance for depletion. (There are also other limits on percentage depletion of oil and gas production.) The taxpayer is entitled to a deduction representing the amount of tax-cost depletion or percentage (statutory) depletion, whichever is higher.

·         Excess statutory depletion. The excess of estimated statutory depletion allowable as an income tax deduction over the amount of cost depletion otherwise allowable as a tax deduction, determined on a total enterprise basis.

Depreciation: See definition for Amortization.

Development: The preparation of a specific mineral deposit for commercial production; this preparation includes construction of access to the deposit and of facilities to extract the minerals. The development process is sometimes further distinguished between a preproduction stage and a current stage, with the distinction being made on the basis of whether the development work is performed before or after production from the mineral deposit has commenced on a commercial scale.

Development Costs: Costs incurred to obtain access to proved reserves and to provide facilities for extracting, treating, gathering, and storing the oil and gas. More specifically, development costs, and also depreciation and applicable operating costs of support equipment and facilities and other costs of development activities, are costs incurred to:

·         Gain access to and prepare well locations for drilling, including surveying well locations for the purpose of determining specific development drilling sites, clearing ground, draining, road building, and relocating public roads, gas lines, and power lines, to the extent necessary in developing the proved reserves;

·         Drill and equip development wells, development-type stratigraphic test wells, and service wells including the costs of platforms and of well equipment such as casing, tubing, pumping equipment, and the wellhead assembly;

·         Acquire, construct, and install production facilities such as lease flow lines, separators, treaters, heaters, manifolds, measuring devices, and production storage tanks, natural gas cycling and processing plants, and utility waste disposal systems; and

·         Provide improved recovery systems.

Distillate: A general classification for one of the petroleum fractions produced in conventional distillation operations. Included are kerosene and products known as heating oils and diesel fuels, specifically: No. 1, No. 2, and No. 4 Fuel Oils and No. 1, No. 2, and No. 4 Diesel Fuels.

Domestic Operations: Domestic operations are those operations located in the United States. The United States is defined as the 50 States, including their offshore territorial waters, the District of Columbia, U.S. commonwealth territories, and protectorates.

Downstream Natural Gas: An FRS Line of Business that begins with the procurement of natural gas, processes and gathers natural gas, produces natural gas liquids, imports liquefied natural gas, markets and trades natural gas and natural gas liquids, and delivers wholesale and retail volumes of natural gas and natural gas liquids.

Drilling: The act of boring a hole (1) to determine whether minerals are present in commercially recoverable quantities and (2) to accomplish production of the minerals (including drilling to inject fluids).

·         Exploratory. Drilling to locate probable mineral deposits or to establish the nature of geological structures; such wells may not be capable of production if minerals are discovered.

·         Developmental. Drilling to delineate the boundaries of a known mineral deposit to enhance the productive capacity of the producing mineral property.

·         Directional. Drilling that is deliberately made to depart significantly from the vertical.

Drilling and Equipping of Wells: The drilling and equipping of wells through completion of the "Christmas tree."

Drilling Arrangement: A contractual agreement under which a working interest owner (the assignor) assigns a part of a working interest in a property to another party (the assignee) in exchange for which the assignee agrees to develop the property. The term may also be applied to an agreement under which an operator assigns fractional shares in production from a property to participants for cash considerations as a means of acquiring cash for developing the property. Under a "disproportionate cost" drilling arrangement, the participants normally pay a greater total share of costs than the total value of the fractional shares of the property received in the arrangement.

Dry-Hole Charge: The charge-off to expense of a previously capitalized cost upon the conclusion of an unsuccessful drilling effort.

Dry-Hole Contribution: A payment (either in cash or in acreage) that is required by agreement only if a test well is unsuccessful and that is made in exchange for well test and evaluation data. (See definitions for Bottom Hole Contribution and Test Well Contribution.)

Dual-Fired Unit: A generating unit that can produce electricity using two or more input fuels. In some of these units, only the primary fuel can be used continuously; the alternate fuel(s) can be used only as a start-up fuel or in emergencies.

Eastern Interconnect: Composed of the following Regional Reliability Councils (as defined by the North American Electric Reliability Council): East Central Area Reliability Coordination Agreement (ECAR), Florida Reliability Coordinating Council (FRCC), Mid-Atlantic Area Council (MAAC), Mid-America Interconnected Network (MAIN), Mid-Continent Area Power Pool (MAPP), Northeast Power Coordinating Council (NPCC), Southeastern Electric Reliability Council (SERC), and Southwest Power Pool (SPP).

Electric Power: An FRS Line of Business involved in the production, transmission, delivery, and customer service for the electric power product.

Eliminations: Revenues and expenses resulting from transactions between segments. Consolidated company accounts do not include inter-segment revenues and expenses. Therefore, such inter-segment transactions must be eliminated in consolidation.

End User:A firm or individual that purchases products for its own consumption and not for resale (i.e., an ultimate consumer).

Energy Reserves: Estimated quantities of energy sources that are demonstrated to exist with reasonable certainty on the basis of geologic and engineering data (proved reserves) or that can reasonably be expected to exist on the basis of geologic evidence that supports projections from proved reserves (probable/indicated reserves). Knowledge of the location, quantity, and grade of probable/indicated reserves is generally incomplete or much less certain than it is for proved energy reserves. Note: This term is equivalent to "Demonstrated Reserves" as defined in the resource/reserve classification contained in the U.S. Geological Survey Circular 811, 1978. Demonstrated reserves include measured and indicated reserves but exclude inferred reserves.

Equity in Earnings of Unconsolidated Affiliates: A company's proportional share (based on ownership) of the net earnings or losses of an unconsolidated affiliate. For FRS reporting, cost-basis dividends are included.

Exploration: Exploration involves (1) identifying areas that may warrant examination and (2) examining specific areas that are considered to have prospects of containing oil and gas reserves, including drilling exploratory wells and exploratory-type stratigraphic test wells. Exploration costs may be incurred both before acquiring the related property (sometimes referred to in part as prospecting costs) and after acquiring the property.

Exploration Costs: Costs, including depreciation and applicable operating costs of support equipment and facilities and other costs directly identifiable with exploration activities, such as:

·         Costs of topographical, geological, and geophysical studies, rights of access to properties to conduct those studies, and salaries and other expenses of geologists, geophysical crews, and others conducting those studies. Collectively, these costs are sometimes referred to as geological and geophysical or "G&G" costs.

·         Costs of carrying and retaining undeveloped properties, such as delay rentals, ad valorem taxes on the properties, legal costs for title defense, and the maintenance of land and lease records.

·         Dry hole contributions and bottom hole contributions.

·         Costs of drilling and equipping exploratory wells.

·         Costs of drilling exploratory-type stratigraphic test wells.

Extractive Industries: Industries involved in the activities of (1) prospecting and exploring for wasting (non-regenerative) natural resources, (2) acquiring them, (3) further exploring them, (4) developing them, and (5) producing (extracting) them from the earth. The term does not encompass the industries of forestry, fishing, agriculture, animal husbandry, or any others that might be involved with resources of a regenerative nature.

Extraordinary Item: Income and expense items associated with events and transactions that possess a high degree of abnormality and are of a type that would not reasonably be expected to recur in the foreseeable future. An example would be losses resulting from an earthquake, expropriation, or a prohibition under a newly enacted law.

Farm-out (-in) Arrangement: An arrangement, used primarily in the oil and gas industry, in which the owner or lessee of mineral rights (the first party) assigns a working interest to an operator (the second party), the consideration for which is specified exploration and/or development activities. The first party retains an overriding royalty or other type of economic interest in the mineral production. The arrangement from the viewpoint of the second party is termed a "farm-in arrangement."

Fee Interest: The absolute, legal possession and ownership of land, property, or rights, including mineral rights. A fee interest can be sold (in its entirety or in part) or passed on to heirs or successors.

FERC: The Federal Energy Regulatory Commission.

Field: An area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same individual geological structural feature and/or stratigraphic condition. There may be two or more reservoirs in a field which are separated vertically by intervening impervious strata, or laterally by local geologic barriers, or by both.

Financial Accounting Standards Board (FASB): An independent board responsible, since 1971, for establishing generally accepted accounting principles. Its official pronouncements are called "Statements of Financial Accounting Standards" and "Interpretations of Financial Accounting Standards."

Firm: An association, company, corporation, estate, individual, joint venture, partnership, or sole proprietorship, or any other entity, however organized, including: (a) charitable or educational institutions; (b) the Federal Government, including corporations, departments, Federal agencies, and other instrumentalities; and State and local governments. A firm may consist of (1) a parent entity, including the consolidated and unconsolidated entities (if any) that it directly or indirectly controls; (2) a parent and its consolidated entities only; (3) an unconsolidated entity; or (4) any part or combination of the above.

Footage Drilled: Total footage for wells in various categories, as reported for any specified period, includes (1) the deepest total depth (length of well bores) of all wells drilled from the surface, (2) the total of all bypassed footage drilled in connection with wells, and (3) all new footage drilled for directional "sidetrack" wells. Footage reported for directional "sidetrack" well does not include footage in the common bore which is reported as footage for the original well. In the case of old wells drilled deeper, the reported footage is that which was drilled below the total depth of the old well.

·         Bypassed Footage. Bypassed footage is the footage in that section of hole that is abandoned as the result of remedial sidetrack drilling operations.

·         Deepest Total Depth. The deepest total depth of a given well is the distance from a surface reference point (usually the Kelly bushing) to the point of deepest penetration measured along the well bore. If a well is drilled from a platform or barge over water, the depth of the water is included in the total length of the well bore.

·         Depth of Deepest Production. The depth of the deepest production is the length of the well bore measured (in feet) from the surface reference point to the bottom of the open hole or the deepest perforation in the casing of a producing well.

·         Plugged-Back Footage. Under certain conditions, drilling operations may be continued to a greater depth than that at which a potentially productive formation is found. If production is not established at the greater depth, the well may be completed in the shallower formation. Except in special situations, the length of the well bore from the deepest depth at which the well is completed to the maximum depth drilled is defined as "plugged-back footage." Plugged-back footage is included in total footage drilled but is not reported separately.

·         Redrill Footage. Occasionally, a hole is lost or junked and a second hole may be drilled from the surface in close proximity to the first. Footage drilled for the second hole is defined as "redrill footage." Under these circum-stances, the first hole is reported as a dry hole (explora­tory or developmental) and the total footage is reported as dry hole footage. The second hole is reported as an oil well, gas well, or dry hole according to the result. The redrill footage is included in the appropriate classi­fication of total footage but is not reported as a separate classification.

·         Sidetrack Drilling. This is a remedial operation that results in the creation of a new section of well bore for the purpose of (1) detouring around junk, (2) redrilling lost hole, or (3) straightening key seats and crooked holes. Directional "sidetrack" wells do not include footage in the common bore which is reported as footage for the original well.

·         Surface Drilling Footage (Uranium). Includes both exploration and development drilling:

o         Exploration drilling includes (1) drilling in search of new ore deposits or extensions to known deposits, and (2) drilling at the location of a discovery up to the time the company decides sufficient ore reserves are present to justify commercial exploitation.

o         Development drilling includes all drilling of an ore deposit to determine more precisely size, grade, and configuration subsequent to the time that commercial exploitation is deemed feasible.

Foreign Access: Refers to proved reserves of crude, condensate, and natural gas liquids applicable to long-term supply agreements with foreign governments or authorities in which the company or one of its affiliates acts as producer.

Foreign Currency Transaction Gains and Losses: Gains or losses resulting from the effect of exchange rate changes on transactions denominated in currencies other than the functional currency (for example, a U.S. enterprise may borrow Swiss francs or a French subsidiary may have a receivable denominated in pounds from a U.K. customer). Gains and losses on those foreign currency transactions are generally included in determining net income for the period in which exchange rates change unless the transaction hedges a foreign currency commitment or a net investment in a foreign entity. Intercompany transactions of a long-term investment nature are considered part of a parent's net investment and hence do not give rise to gains or losses.

Foreign Currency Translation Effects: Gains or losses resulting from the process of expressing amounts denominated or measured in one currency in terms of another currency by use of the exchange rate between the two currencies. This process is generally required to consolidate the financial statements of foreign affiliates into the total company financial statements and to recognize the conversion of foreign currency or the settlement of a receivable or payable denominated in foreign currency at a rate different from that at which the item is recorded. Translation adjustments are not included in determining net income, but are disclosed as separate components of consolidated equity.

Foreign Operations: These are operations that are located outside the United States. (See definition for Domestic Operations.) Determination of whether an enterprise's mobile assets, such as offshore drilling rigs or ocean-going vessels, constitute foreign operations should depend on whether such assets are normally identified with operations located outside the United States.

Foreign operations are segregated into the following areas for FRS reporting purposes:

·         Canada.

·         OECD Europe: Includes Austria, Belgium, Denmark, Finland, France, the Federal Republic of Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.

·         Former Soviet Union (FSU) and East Europe: The Baltic States of Estonia, Latvia, and Lithuania, as well as Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgystan, Moldova, Russia, Tajikstan, Turkmenistan, Ukraine, Uzbekistan, Albania, Bulgaria, Czech Republic, Hungary, Poland, Romania, Slovakia, and Yugoslavia.

·         Middle East: Includes Saudi Arabia, the United Arab Emirates, Iraq, Iran, Kuwait, the Kuwait-Saudi Arabia Partitioned Zone, Qatar, Dubai, Bahrain, Oman, Yemen, Syria, Jordan, and Israel.

·         Africa (the African continent).

·         Other Eastern Hemisphere: Areas eastward of the Greenwich prime meridian to 178E longitude and not included in other specified domestic or foreign classifications.

·         Other Western Hemisphere: Areas westward of the Greenwich prime meridian to 178E longitude not included in other domestic or foreign classifications.

Gas Turbine Plant: A plant in which the prime mover is a gas turbine. A gas turbine consists typically of an axial-flow air compressor and one or more combustion chambers where liquid or gaseous fuel is burned and the hot gases are passed to the turbine and where the hot gases expand drive the generator and are then used to run the compressor.

Gathering System: A network of small pipelines that connect producing wells with a transmission system.

Generally accepted accounting principles (GAAP): Defined by the FASB as the conventions, rules, and procedures necessary to define accepted accounting practice at a particular time, includes both broad guidelines and relatively detailed practices and procedures.

Generating unit: Any combination of physically connected generators, reactors, boilers, combustion turbines, and other prime movers operated together as a single unit to produce electric power.

Generation, net: The amount of gross generation less the electrical energy consumed at the generating station(s) for station service or auxiliaries. Note: Electricity required for pumping at pumped-storage plants is regarded as electricity for station service and is deducted from gross generation.

Generation, Regulated: The production of electric power for which rates are regulated by a government commission through rulemaking and adjudication.

Generation, Non-regulated: The production of electric power that is sold at market-based prices.

Generator capacity: See Generator nameplate capacity, Net summer capacity

Generator nameplate capacity (installed): The maximum rated output of a generator, prime mover, or other electric power production equipment under specific conditions designated by the manufacturer. Installed generator nameplate capacity is commonly expressed in megawatts (MW) and is usually indicated on a nameplate physically attached to the generator.

Geological and Geophysical (G&G) Costs: Costs incurred in making geological and geophysical studies, including, but not limited to, costs incurred for salaries, equipment, obtaining rights of access, and supplies for scouts, geologists, and geophysical crews.

Hydrocarbon: An organic chemical compound of hydrogen and carbon in either the gaseous, liquid, or solid phase. The molecular structure of hydrocarbon compounds varies from the simplest (e.g., methane, a constituent of natural gas) to the very heavy and very complex.

Hydroelectric power: The use of flowing water to produce electrical energy.

Improved recovery: Extraction of crude oil or natural gas by any method other than those that rely primarily on natural reservoir pressure, gas lift, or a system of pumps.

Industrial Sector: An energy-consuming sector that consists of all facilities and equipment used for producing, processing, or assembling goods The industrial sector encompasses the following types of activity: manufacturing (NAICS codes 31-33); agriculture, forestry, fishing and hunting (NAICS code 11); mining, including oil and gas extraction (NAICS code 21); natural gas distribution (NAICS code 2212); and construction (NAICS code 23). Overall energy use in this sector is largely for process heat and cooling and powering machinery, with lesser amounts used for facility heating, air conditioning, and lighting. Fossil fuels are also used as raw material inputs to manufactured products. Note: This sector includes generators that produce electricity and/or useful thermal output primarily to support the above-mentioned industrial activities.

Intangible Drilling and Development Costs (IDC): Costs incurred in preparing well locations, drilling and deepening wells, and preparing wells for initial production up through the point of installing control valves. None of these functions, because of their nature, have salvage value. Such costs would include labor, transportation, consumable supplies, drilling tool rentals, site clearance, and similar costs.

Investments and Advances to Unconsolidated Affiliates: The balance sheet account representing the cost of investments and advances to unconsolidated affiliates. Generally, affiliates which are less than 50 percent owned by a company may not be consolidated into the company's financial statements.

Kilovolt-Ampere (kVa): A unit of apparent power, equal to 1,000 volt-amperes; the mathematical product of the volts and amperes in an electrical circuit.

Kilowatt (kW): One thousand watts.

Kilowatthour (kWh): A measure of electricity defined as a unit of work or energy, measured as 1 kilowatt (1,000 watts) of power expended for 1 hour. One kWh is equivalent to 3,412 Btu.

KWH Delivered: The volume of electric power in kilowatthours delivered to wholesale/resellers.

Lease Bonus: An amount paid by a lessee to a lessor as consideration for granting a lease, usually as a lump sum; this payment is in addition to any rental or royalty payments.

Lease Equipment: All equipment located on the lease except the well to the point of the "Christmas tree."

Lifting Costs: The costs associated with the extraction of a mineral reserve from a producing property. (See definition for Production Cost.)

Line Miles, Natural Gas Transmission: The miles of natural gas transmission pipeline installed and used to deliver wholesale volumes of product.

Liquefied natural gas (LNG): Natural gas (primarily methane) that has been liquefied by reducing its temperature to -260 degrees Fahrenheit at atmospheric pressure.

Mains: A system of pipes for transporting gas within a distributing gas utility's retail service area to points of connection with consumer service pipes.

Marketing/Trading: An FRS segment that engages in the buying of natural gas and natural gas liquids and selling of wholesale and retail volumes of natural gas and natural gas liquids in the downstream natural gas line of business and electric power in the electric power line of business.

Maximum demand: The greatest of all demands of the load that has occurred within a specified period of time.

Mcf: One thousand cubic feet.

Megawatt (MW): One million watts of electricity.

Megawatthour (MWh): One thousand kilowatt-hours or 1 million watt-hours.

Miles of Distribution Mains: The miles of natural gas distribution pipeline installed and used to deliver products to customers.

Milling: The grinding or crushing of ore, concentration, and other benefication, including the removal of valueless or harmful constituents and preparation for market.

Milling Capacity: The maximum rate at which a mill is capable of treating ore or producing concentrate.

Mineral: Any of the various naturally occurring inorganic substances, such as metals, salt, sand, stone, sulfur, and water, usually obtained from the earth. Note: For reporting on the Financial Reporting System the term also includes non-renewable substances that are extracted from the earth. In addition, organic energy resources (such as coal, crude oil, and natural gas) are included.

Mineral Interests In Properties: (Hereinafter referred to as Properties). These include fee ownership or a lease, concession, or other contractual interest representing the right to extract minerals subject to such terms as may be imposed by the conveyance of these interests. Properties also include royalty interests, production payments payable in oil or gas, and other non-operating interests in properties operated by others. Properties include those agreements with foreign governments or authorities under which an enterprise participates in the operation of the related properties or otherwise serves as "producer" of the underlying reserves, but properties do not include other supply agreements or contracts that represent the right to purchase (as opposed to extract) oil and gas.

Mineral Lease: An agreement wherein a mineral interest owner (lessor) conveys to another party (lessee) the rights to explore for, develop, and produce specified minerals. The lessee acquires a working interest and the lessor retains a non-operating interest in the property, referred to as the royalty interest, each of proportions agreed upon.

Mineral Resource Assets: The costs shown on the balance sheet representing assets that are directly associated with and which derive value from mineral reserves. For the oil and gas industry these costs may include:

·         Intangible drilling and development costs.

·         Capitalized nonproductive costs, delay rentals, and overhead and similar costs.

·         Producing and non-producing leasehold costs.

·         Down-hole equipment.

·         Well-head equipment.

·         Lease production facilities: tanks, flow-lines, separators, above-ground pumps, compressors, etc.

·         Gas cycling plants.

·         Processing facilities located in a field in which the company owns interests in producing leases.

·         Support facilities: power plants, field living quarters, etc.

·         Gathering systems to the point of market in the field.

·         Offshore platforms.

All costs that involve processing, transportation, refining, distribution, and marketing are not classified as mineral resource assets. Examples may include:

·         Refineries.

·         Transportation equipment and facilities beyond the point of market in the field--including pipelines, barges, and truck equipment.

For the mining industry, these costs may include:

·         Capitalized costs related to acquisitions of mineral rights, leases, or properties; exploration; and develop­ment of ore bodies.

·         All assets employed in the extraction and conversion process that are necessary to produce mineral product or products that are commercially marketable.

·         Processing assets located at or dedicated solely to a mine or mines in which the company has an economic interest, which are designed with specific regard to the particular physical or chemical characteristics of the ores being mined or the scale of operation, and which, by their nature, would have only nominal economic value in the absence of the ores they were designed to treat.

·         Supportive facilities such as power generating and distribution facilities, mine transportation facilities, townsites, other infrastructure, etc., which derive value solely because of the existence of the ore body.

All costs that involve processing, manufacturing, and fabricating facilities that are not directly associated with, nor derive value from, a particular mineral deposit in which the company has an economic interest, e.g., smelters and refineries, which obtain their feed from outside shippers, are not mineral resource assets.

Mineral Rights: The ownership of the minerals beneath the earth's surface with the right to remove them. Mineral rights may be conveyed separately from surface rights.

Mining: An energy-consuming subsector of the industrial sector that consists of all facilities and equipment used to extract energy and mineral resources.

Minority Interest in Income: The proportional share of the minority ownership's interest (less than 50 percent) in the earnings or losses of the consolidated subsidiary. Subsidiaries are generally fully consolidated when a share of ownership between 51 percent and 100 percent is held by the parent. In consolidation, 100 percent of revenues, expenses, assets, etc. are included in the financial statements even though, for example, the subsidiary is only 78 percent owned by the parent company. In such cases, the consolidated balance sheet must have a caption on the right-hand side titled something like "minority interests in consolidated affiliates," and the income statement must have a similar line to reduce net income to the pro rata (78 percent in this example) share of the consolidated subsidiary's net income.

Motor Gasoline (finished): A complex mixture of relatively volatile hydrocarbons with or without small quantities of additives, blended to form a fuel suitable for use in spark-ignition engines. Motor gasoline, as defined in ASTM Specification D 4792 or Federal Specification VV-G-1668C, is characterized as having a boiling range of 122 to 158 degrees Fahrenheit at the 10 percent recovery point to 365 to 372 degrees Fahrenheit at the 88 percent recovery point. Motor Gasoline includes conventional gasoline; all types of oxygenated gasoline, including gasohol; and reformulated gasoline, but excludes aviation gasoline. Note: Volumetric data on blending components, such as oxygenates, are not counted in data on finished motor gasoline until the blending components are blended into the gasoline.

Motor Gasoline, Finished Gasohol. A blend of finished motor gasoline (leaded or unleaded) and alcohol (generally ethanol but sometimes methanol), limited to 10 percent by volume of alcohol.

Motor Gasoline, Finished Leaded. Contains more than 0.05 gram of lead per gallon or more than 0.005 gram of phosphorus per gallon. Premium and regular grades are included, depending on the octane rating. Includes leaded gasohol. Blendstock is excluded until blending has been completed. Alcohol that is to be used in the blending of gasohol is excluded.

Motor Gasoline, Finished Unleaded. Contains not more than 0.05 gram of lead per gallon and not more than 0.005 gram of phosphorus per gallon. Premium and regular grades are included, depend­ing on the octane rating. Includes unleaded gasohol. Blend stock is excluded until blending has been completed. Alcohol that is to be used in the blending of gasohol is also excluded.

MTBE (Methyl tertiary butyl ether) (CH₃ )₃COCH₃. An ether intended for motor gasoline blending. See Oxygenates.Natural gas: A gaseous mixture of hydrocarbon compounds, the primary one being methane (see definition above). Note: The Energy Information Administration measures wet natural gas and its two sources of production, associated/dissolved natural gas and nonassociated natural gas, and dry natural gas, which is produced from wet natural gas.

Natural Gas, Dry: Natural gas which remains after: 1) the liquefiable hydrocarbon portion has been removed from the gas stream (i.e., gas after lease, field, and/or plant separation); and 2) any volumes of non-hydrocarbon gases have been removed where they occur in sufficient quantity to render the gas unmarketable. Note: Dry natural gas is also known as consumer-grade natural gas. The parameters for measurement are cubic feet at 60 degrees Fahrenheit and 14.71 pounds per square inch absolute.

Natural Gas,Wet: A mixture of hydrocarbon compounds and small quantities of various non-hydrocarbons existing in the gaseous phase or in solution with crude oil in porous rock formations at reservoir conditions. The principal hydrocarbons normally contained in the mixture are methane, ethane, propane, butane, and pentane. Typical non-hydrocarbon gases that may be present in reservoir natural gas are water vapor, carbon dioxide, hydrogen sulfide, nitrogen and trace amounts of helium. Under reservoir conditions, natural gas and its associated liquefiable portions occur either in a single gaseous phase in the reservoir or in solution with crude oil and are not distinguishable at the time as separate substances. Note: The Securities and Exchange Commission and the Financial Accounting Standards Board refer to this product as natural gas.

Associated-dissolved natural gas: Natural gas that occurs in crude oil reservoirs either as free gas (associated) or as gas in solution with crude oil (dissolved gas).

Non-associated natural gas: Natural gas that is not in contact with significant quantities of crude oil in the reservoir.

Natural Gas Liquids (NGL): A general term for all liquid products separated from natural gas in gas processing or cycling plants. They include natural gas plant liquids and lease condensate. Note: Portions of reservoir gas liquefied at the surface in lease separators and field facilities should be included.

Natural gas processing plants: Facilities designed to recover natural gas liquids from a stream of natural gas that may or may not have passed through lease separators and/or field separation facilities. These facilities also control the quality of the natural gas to be marketed. Cycling plants are classified as natural gas processing plants.

Natural Reservoir Pressure: the energy within an oil or gas reservoir that causes the oil or gas to rise (unassisted by other forces) to the earth's surface when the reservoir is penetrated by an oil or gas well. The energy may be the result of "dissolved gas drive," "gas cap drive," or "water drive." Regardless of the type of drive, the principle is the same: the energy of the gas or water, creating a natural pressure, forces the oil or gas to the well bore.

Net Investment In Place: The sum of net property, plant, and equipment (PP&E) plus investment and advances to unconsolidated affiliates.

Net Investment In Place, Additions to: The current year's expenditures on additions to net investment in place. (See definition for Net Investment In Place.)

Net Ownership Interest Reserves: Includes all reserve quantities owned, regardless of the type of ownership, e.g., working interest or royalty.

Net Profits Interest: A contractual arrangement under which the beneficiary, in exchange for consideration paid, receives a stated percentage of the net profits from an extractive operation. The contract specifies the items to be taken into account in computing net profits. That type of arrangement is considered a non-operat­ing interest, as distinguished from a working interest, since it does not involve

the rights and obligations of operating a mineral property (costs of exploration, development, and operation). The net profits interest does not bear any part of net losses.

Net Summer Capacity: The steady hourly output, which generating equipment is expected to supply to system load exclusive of auxiliary power, as demonstrated by tests at the time of summer peak demand. The summer peak period begins on June 1 and extends through September 30.

Non-attainment Area: Any area that does not meet the national primary or secondary ambient air quality standard established by the Environmental Protection Agency for designated pollutants, such as carbon monoxide and ozone.

Non-branded Product: Any refined petroleum product that is not a branded product.

Non-Electric: Businesses and/or products that are not related to electric power.

Non-Energy: An FRS Line of Business that is not related to any energy-related Line of Business, except through company ownership.

Non-Gas Sales: Sales of products that are not related to the natural gas or natural gas liquid products.

Non-Operating Interest: Any mineral lease interest (e.g., royalty, production payment, net profits interest) that does not involve the rights and obligations of operating a mineral property.

Non-Producing: A term used in reference to a property, well, or mine from which production of commercially recoverable quantities of wasting natural resources has not yet commenced.

Nontraceable: Those revenues, costs, assets, and liabilities that cannot be directly attributed to a line of business or that cannot be assigned to a line of business by use of a reasonable alloca­tion method developed on the basis of operating level realities.

North American Industrial Classification System (NAICS): A new classification scheme, developed by the Office of Management and Budget to replace the Standard Industrial Classification (SIC) System, that categorizes establishments according to the types of production processes they primarily use.

Nuclear Electric Power (nuclear power): Electricity generated by the use of the thermal energy released from the fission of nuclear fuel in a reactor.

Nuclear Fuel: Fissionable materials that have been enriched to such a composition that, when placed in a nuclear reactor, will support a self-sustaining fission chain reaction, producing heat in a controlled manner for process use.

Nuclear Fuel Operations: All nuclear fuel operations, excluding reactor and reactor component manufacturing or containment construction. Includes: exploration and development; mining; milling; conversion; enrichment; fabrication; reprocessing; and spent fuel storages.

Nuclear Reactor: An apparatus in which a nuclear fission chain reaction can be initiated, controlled, and sustained at a specific rate. A reactor includes fuel (fissionable material), moderating material to control the rate of fission, a heavy-walled pressure vessel to house reactor components, shielding to protect personnel, a system to conduct heat away from the reactor, and instrumentation for monitoring and controlling the reactor's systems.

Offshore: That geographic area that lies seaward of the coastline. In general, the coastline is the line of ordinary low water along with that portion of the coast that is in direct contact with the open sea or the line marking the seaward limit of inland water.

If a State agency uses a different basis for classifying onshore and offshore areas, the State classification should be used (e.g., Cook Inlet in Alaska is classified as offshore; for Louisiana, the coastline is defined as the Chapman Line, as modified by subsequent adjudication).

Oil Shale: A sedimentary rock containing kerogen, a solid organic material.

Operating Expenses: Segment expenses related both to revenue from sales to unaffiliated customers and revenue from intersegment sales or transfers, excluding loss on disposition of property, plant, and equipment; interest expenses and financial charges; foreign currency transaction effects; minority interest; and income taxes.

Operating Income: Operating revenues less operating expenses. Excludes items of other revenue and expense such as equity in earnings of unconsolidated affiliates, dividends, interest income and expense, income taxes, extraordinary items, and cumulative effect of accounting changes.

Operating Revenues: Segment revenues both from sales to unaffiliated customers (i.e., revenue from customers outside the enterprise as reported in the company's consolidated income statement) and from intersegment sales or transfers, if any, of products and services similar to those sold to unaffiliated customers, excluding equity in earnings of unconsolidated affiliates; dividend and interest income; gain on disposition of property, plant, and equipment; and foreign currency transaction effects.

Other Energy: Energy operations not included in Petroleum or Coal. Other Energy includes nuclear, oil shale, tar sands, coal liquefaction and gasification, geothermal, solar, and other forms of non-conventional energy.

Other Renewable Generation: Electricity originating from these sources: biomass, fuel cells, geothermal heat, solar power, waste, wind, and wood.

Other Trading Expense: Expenses incurred to maintain energy trading resources not included in any other expense category.

Output Statistics: Data concerning the volume of product produced and/or delivered.

Oxygenated Gasoline: Finished motor gasoline, other than reformulated gasoline, having an oxygen content of 2.7 percent or higher by weight and required by the U.S. Environmental Protection Agency (EPA) to be sold in areas designated by EPA as carbon monoxide (CO) non-attainment areas. See Non-attainment Area. Note: Oxygenated gasoline excludes oxygenated fuels program reformulated gasoline (OPRG) and reformulated gasoline blendstock for oxygenate blending (RBOB). Data on gasohol that has at least 2.7 percent oxygen, by weight, and is intended for sale inside CO non-attainment areas are included in data on oxygenated gasoline. Other data on gasohol are included in data on conventional gasoline.

Oxygenates: Substances which, when added to gasoline, increase the amount of oxygen in that gasoline blend. Ethanol, Methyl Tertiary Butyl Ether (MTBE), Ethyl Tertiary Butyl Ether (ETBE), and methanol are common oxygenates.

PP&E, Additions to: The current year's expenditures on property, plant, and equipment (PP&E). The amount is predicated upon each reporting company's accounting practice. That is, accounting

practices with regard to capitalization of certain items may differ across companies, and therefore this figure in FRS will be a function of each reporting company's policy.

PP&E, Net: The original cost of property, plant, and equipment (PP&E), less accumulated DD&A.

Permanent Differences: Differences between taxable income and pretax accounting income arising from transactions that, under applicable tax laws and regulations, will not be offset by corresponding differences or "turn around" in other periods. (See definition for Timing Differences.)

Petrochemicals: Organic and inorganic compounds and mixtures that include but are not limited to organic chemicals, cyclic inter­mediates, plastics and resins, synthetic fibers, elastomers, organic dyes, organic pigments, detergents, surface active agents, carbon black, and ammonia.

Petroleum: A broadly defined class of liquid hydrocarbon mixtures. Included are crude oil, lease condensate, unfinished oils, refined products obtained from the processing of crude oil, and natural gas plant liquids. Note: Volumes of finished petroleum products include nonhydrocarbon compounds, such as additives and detergents, after they have been blended into the products.

Pipeline, Distribution: A pipeline that conveys natural gas from a transmission pipeline to its ultimate consumer.

Pipeline, Gathering: A pipeline that conveys gas from a production well/field to a gas processing plant or transmission pipeline for eventual delivery to end-use consumers.

Pipeline (natural gas): A continuous pipe conduit, complete with such equipment as valves, compressor stations, communications systems, and meters for transporting natural and/or supplemental gas from one point to another, usually from a point in or beyond the producing field or processing plant to another pipeline or to points of utilization.

Pipeline (petroleum): Crude oil and product pipelines used to transport crude oil and petroleum products, respectively (including interstate, intrastate, and intracompany pipelines), within the 50 states and the District of Columbia.

Pipelines, Rate Regulated: FRS establishes three pipeline segments; crude/liquid (raw materials); natural gas; and refined products. The pipelines included in these segments are all Federally or State rate-regulated pipeline operations, which are included in the reporting company's consolidated financial statements. However, at the reporting company's option, intra-state petroleum pipeline operations may be included in the Domestic Refining/Marketing Segment if: they would comprise less than 5 percent of Domestic Refining/Marketing Segment net PP&E, revenues, and earnings in the aggregate; and if the inclusion of such pipelines in the consolidated financial statements adds less than $100 million to the net PP&E reported for the Domestic Refining/ Marketing Segment.

Pipeline, Transmission: A pipeline that conveys gas from a region where it is produced to a region where it is to be distributed.

Pole-Mile: A unit of measuring the simple length of an electric transmission/distribution line/feeder carrying

electric conductors, without regard to the number of conductors carried.

Pre-Discovery Costs: All costs incurred in an extractive industry operation prior to the actual discovery of minerals in commercially recoverable quantities; normally includes prospecting, acquisition, and exploration costs, and may include some development costs.

Pre-Production Costs: Costs of prospecting for, acquiring, exploring, and developing mineral reserves, incurred prior to the point when production of commercially recoverable quantities of minerals commences.

Primary Recovery: The crude oil or natural gas recovered by any method that may be employed to produce them where the fluid enters the well bore by the action of natural reservoir pressure (energy or gravity).

Primary Transportation: Conveyance of large shipments of petroleum raw materials and refined products usually by pipeline, barge, or ocean-going vessel. All crude oil transportation is primary, including the small amounts moved by truck. All refined product transportation by pipeline, barge, or ocean-going vessel is primary transportation.

Probable Energy Reserves: Estimated quantities of energy sources that, on the basis of geologic evidence that supports projections from proved reserves (below), can reasonably be expected to exist and be recoverable under existing economic and operating conditions. Site information is insufficient to establish with confidence the location, quality, and grades of the energy source. Note: This term is equivalent to "Indicated Reserves" as defined in the resource/reserve classification contained in the U.S. Geological Survey Circular 811, 1978. Measured and indicated reserves, when combined, constitute demonstrated reserves. See also energy reserves.

Probable (indicated) Reserves, Coal: Reserves or resources for which tonnage and grade are computed partly from specific measurements, samples, or production data and partly from projection for a reasonable distance on the basis of geological evidence. The sites available are too widely or otherwise inappropriately spaced to permit the mineral bodies to be outlined completely or the grade established throughout. See probable energy reserves definition above.

Processing and Gathering: The segment of the downstream natural gas line of business that includes natural gas liquids production operations, natural gas liquids transport and storage operations, natural gas gathering and/or processing operations (if they are profit centers), and marine-based liquefied natural gas operations.

Processing Plant: A surface installation designed to separate and recover natural gas liquids from a stream of produced natural gas through the processes of condensation, absorption, adsorption, refrigeration, or other methods and to control the quality of natural gas marketed and/or returned to oil or gas reservoirs for pressure maintenance, repressuring, or cycling.

Producing Property: A term often used in reference to a property, well, or mine that produces wasting natural resources. The term typically means a property that produces in paying quantities (that is, one for which proceeds from production exceed operating expenses).

Production, Natural Gas Liquids: Production of natural gas liquids is classified as follows:

·         Contract Production. Natural gas liquids accruing to a company because of its ownership of liquids extraction facilities that it uses to extract liquids from gas belonging to others, thereby earning a portion of the resultant liquids.

·         Leasehold Production. Natural gas liquids produced, extracted, and credited to a company's interest.

·         Contract Reserves. Natural gas liquid reserves correspond­ing to the contract production defined above.

·         Leasehold Reserves. Natural gas liquid reserves corre­sponding to the leasehold production defined above.

Production, Oil and Gas: The lifting of the oil and gas to the surface and gathering, treating, field processing (as in the case of processing gas to extract liquid hydrocarbons), and field storage. The production function shall normally be regarded as terminating at the outlet valve on the lease or field production storage tank; if unusual physical or operational circumstances exist, it may be more appropriate to regard the production function as terminating at the first point at which oil, gas, or gas liquids are delivered to a main pipeline, a common carrier, a refinery, or a marine terminal.

·         Gross Company-Operated Production. Total production from all company-operated properties, including all working and nonworking interests.

·         Net Working Interest Production. Total production accruing to the reporting company's working interests less royalty oil and volumes due others.

Production Costs: Costs incurred to operate and maintain wells and related equipment and facilities, including depreciation and applicable operating costs of support equipment and facilities and other costs of operating and maintaining those wells and related equipment and facilities. They become part of the cost of oil and gas produced. The following are examples of production costs (sometimes called lifting costs):

·         Costs of labor to operate the wells and related equipment and facilities.

·         Repair and maintenance costs.

·         The costs of materials, supplies and fuel consumed, and services utilized in operating the wells and related equipment and facilities.

·         The costs of property taxes and insurance applicable to proved properties and wells and related equipment and facilities.

·         The costs of severance taxes.

Depreciation, depletion, and amortization (DD&A) of capitalized acquisition, exploration, and development costs are not production costs but also become part of the cost of oil and gas produced along with production (lifting) costs identified above.

Production costs include the following sub-categories of costs:

·         Well operations and maintenance.

·         Well workovers.

·         Operating fluid injections and improved recovery programs.

·         Operating gas processing plants.

·         Ad valorem taxes.

·         Production or severance taxes.

·         Other, including overhead.

Production Payments: A contractual arrangement providing a mineral interest that gives the owner a right to receive a fraction of production or of proceeds from the sale of production, until a specified quantity of minerals (or a definite sum of money, including interest) has been received. It is considered a nonoperating interest, since the owner bears no

Production payments are classified according to the manner in which the rights are created:

·         Carved-out. A production payment created out of the working interest in a mineral property. The working interest owner "carves out" and transfers the production payment contractual right to the transferee in return for cash or other consideration but retains the operating rights and responsibilities.

·         Retained. Production payment retained under a contract in which the transferor divests a working interest in the producing property to the transferee and subsequently becomes the recipient of production payments delivered by the transferee.

Proportional Interest in Investee Reserves: The reporting company's proportional interest at the end of the year in the reserves of investees that are accounted for by the equity method.

Prospecting: The search for an area of probable mineralization; the search normally includes topographical, geological, and geophysical studies of relatively large areas undertaken in an attempt to locate specific areas warranting detailed exploration. Prospecting usually occurs prior to the acquisition of mineral rights.

Prospecting Costs: Direct and indirect costs incurred to identify areas of interest that may warrant detailed exploration. Such costs include those incurred for: topographical, geological, and geophysical studies; rights of access to properties in order to conduct such studies; salaries, equipment, instruments, and supplies for geologists, geophysical crews, and others conducting such studies; and overhead that can be identified with those activities.

Proved Energy Reserves: Estimated quantities of energy sources that analysis of geologic and engineering data demonstrates with reasonable certainty are recoverable under existing economic and operating conditions. The location, quantity, and grade of the energy source are usually considered to be well established in such reserves. Note: This term is equivalent to "Measured Reserves" as defined in the resource/reserve classification contained in the U.S. Geological Survey Circular 811, 1978. Measured and indicated reserves, when combined, constitute demonstrated reserves. See also energy reserves.

Proved (measured) Reserves, Coal: Reserves or resources for which tonnage is computed from dimensions revealed in outcrops, trenches, workings, and drill holes and for which the grade is computed from the results of detailed sampling. The sites for inspection, sampling, and measurement are spaced so closely and the geologic character is so well defined that size, shape, and mineral content are well established. The computed tonnage and grade are judged to be accurate within limits that are stated, and no such limit is judged to be different from the computed tonnage or grade by more than 20 percent. See proved energy reserves (above).

Purchased Power: Power purchased or available for purchase from a source outside the system.

Reclamation Expenses: In the context of the coal operation statement of income, this term refers to all payments made by the company attributable to reclamation, including taxes.

Refined Petroleum Products: Refined petroleum products include but are not limited to gasolines, kerosene, distillates (including No. 2 fuel oil), liquefied petroleum gas, asphalt, lubricating oils, diesel fuels, and residual fuels.

Reformulated Gasoline: Finished motor gasoline formulated for use in motor vehicles, the composition and properties of which meet the requirements of the reformulated gasoline regulations promulgated by the U.S. Environmental Protection Agency under Section 211(k) of the Clean Air Act. Note: This category includes oxygenated fuels program reformulated gasoline (OPRG) but excludes reformulated gasoline blendstock for oxygenate blending (RBOB).

Renewables: Energy sources that, through nature, renew themselves.

Research and Development: Basic and applied research in the sciences and engineering and the design and development of prototypes and processes, excluding quality control, routine product testing, market research, sales promotion, sales service, research in the social sciences or psychology, and other non-technological activities or technical services.

Basic research, applied research, and development are distin­guished as follows:

·         Basic Research. Original investigations for the advancement of scientific knowledge not having specific known commercial objectives, although such investigations may be in fields of present or potential interest to the reporting company or others.

·         Applied Research. Investigations directed to the discovery of new scientific knowledge having specific commercial objectives with respect to products or processes. This definition differs from that of basic research chiefly in terms of the objectives of the reporting company or the organization sponsoring the activity.

·         Development. Technical activities of a nonroutine nature concerned with translating research findings or other scientific knowledge into products or processes. This does not include routine technical services to customers or other activities excluded from the above definition of research and development.

Reserves, Change In: For FRS reporting, the following definitions should be used for changes in reserves.

·         Extensions, Discoveries, and Other Additions. Additions to an enterprise's proved reserves that result from (1) extension of the proved acreage of previously discovered (old) reservoirs through additional drilling in periods subsequent to discovery and (2) discovery of new fields with proved reserves or of new reservoirs of proved reserves in old fields.

·         Improved Recovery. Changes in reserve estimates resulting from application of improved recovery techniques shall be separately shown if significant. If not significant, such changes shall be included in revisions of previous estimates.

·         Purchases or Sales of Minerals-in-Place. Increase or decrease in the estimated quantity of reserves resulting from the purchase or sale of mineral rights in land with known proved reserves.

·         Revisions of Previous Estimates. Changes in previous estimates of proved reserves, either upward or downward, resulting from new information normally obtained from development drilling and production history or resulting from a change in economic factors. Revisions do not include changes in reserve estimates resulting from increases in proved acreage or from improved recovery techniques.

Reserves, Coal: Quantities of un-extracted coal that comprise the demonstrated base for future production, including both proved and probable reserves. See proved energy reserves; probable energy reserves; energy reserves; proved (measured) reserves, coal; and probable (indicated) reserves, coal.

Reserves, Net: Includes all proved reserves associated with the company's net working interests. (See definition for Working Interest.)

Reserves, Proved (Oil and Gas): Proved reserves for oil and gas are the estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.

Reservoirs are considered proved if economic producibility is supported by one or more of: actual production; conclusive formation test; core analysis; and/or electric or other log interpretations. The area of a reservoir considered proved includes (1) that portion delineated by drilling and defined by gas-oil and/or oil-water contacts, if any; and (2) the immediately adjoining portions not yet drilled, but which can be reasonably judged as economically productive on the basis of available geological and engineering data. In the absence of information on fluid contacts, the lowest known structural occurrence of hydro­carbons controls the lower proved limited of the reservoir.

Volumes of oil and gas placed in underground storage are not to be considered proved reserves, but should be classified as inventory.

Reserves that can be produced economically through application of improved recovery techniques (such as fluid injection) are included in the "proved" classification when successful testing by a pilot project, or when the operation of an installed program in the reservoir provides support for the engineering analysis on which the project or program was based.

Estimates of proved reserves do not include the following: (1) oil that may become available from known reservoirs but is classified separately as "indicated additional reserves"; (2) crude oil, natural gas, and natural gas liquids, the recovery of which is subject to reasonable doubt because of uncertainty as to geology, reservoir characteristics, or economic factors; (3) crude oil, natural gas, and natural gas liquids that may occur in undrilled prospects; and (4) crude oil, natural gas, and natural gas liquids that may be recovered from oil shales, tar sands, coal, gilsonite, and other such sources.

It is not necessary that production, gathering, or transportation facilities be installed or operative for a reservoir to be considered proved.

For natural gas, an appropriate reduction in the reservoir gas volume is made to cover the removal of the liquefiable portions of the gas and the exclusion of nonhydrocarbon gases where they occur in sufficient quantity to render the gas unmarketable. If the liquefiable portions of the gas are not separately estimated, they need not be separately stated for FRS reporting purposes.

Reservoir: A porous and permeable underground formation containing an individual and separate natural accumulation of producible hydrocarbons (crude oil and/or natural gas) which is confined by impermeable rock or water barriers and is characterized by a single natural pressure system.

Residential Sector: An energy-consuming sector that consists of living quarters for private households. Common uses of energy associated with this sector include space heating, water heating, air conditioning, lighting, refrigeration, cooking, and running a variety of other appliances. The residential sector excludes institutional living quarters.

Residual Fuel Oil: The heavier oils that remain after the distillate fuel oils and lighter hydrocarbons are distilled away in refinery operations and that conform to ASTM Specifications D396 and 973. Included are No. 5, a residual fuel oil of medium viscosity; Navy Special, for use in steam-powered vessels in government service and in shore power plants; No. 6, which includes Bunker C fuel oil, and is used for commercial and industrial heating, electricity generation and to power ships.

Retail Power: Electric power that is sold and delivered to retail customers.

Royalty: A contractual arrangement providing a mineral interest that gives the owner a right to a fractional share of production or proceeds therefrom, that does not contain rights and obliga­tions of operating a mineral property, and that is normally free and clear of exploration, developmental, and operating costs, except production taxes. (See definition for Nonoperating Interest.)

·         Advance Royalty. A royalty required to be paid in advance of production from a mineral property that may or may not be recoverable from future production.

·         Basic Royalty. A guaranteed minimum amount of royalty income that a royalty owner is to receive under the terms of the lease agreement, regardless of the royalty owner's share of actual proceeds from the sale of production. A minimum royalty may or may not be recoverable out of future production.

·         Overriding Royalty. A royalty interest, in addition to the basic royalty, created out of the working interest; it is, therefore, limited in its duration to the life of the lease under which it is created.

·         Shut-In Royalty. A royalty paid by a lessee as compensa­tion for a lessor's loss of income because the lessee has deferred production from a property that is known to be capable of producing minerals. Shut in may be caused by a lack of a ready market, by a lack of transportation facilities, or by other reasons. A shut-in royalty may or may not be recoverable out of future production.

Salt Dome: A domical arch (anticline) of sedimentary rock beneath the earth's surface, in which the layers bend downward in opposite directions from the crest, and that has a mass of rock salt as its core.

Shallow Pitting: Testing a potential mineral deposit by systematically sinking small shafts into the earth and by analyzing the material recovered.

Short Ton: A unit of weight that equals 2,000 pounds.

Shut In: Closed temporarily; wells and mines capable of production may be shut in for repair, cleaning, inaccessibility to a market, etc.

Support Equipment and Facilities: These include, but are not limited to, seismic equipment, drilling equipment, construction and grading equipment, vehicles, repair shops, warehouses, supply points, camps, and division, district, or field offices.

Surface Drilling Expenses (Uranium): These include drilling, drilling roads, site preparation, geological and other technical support, sampling, and drill hole logging.

Surface Rights: Fee ownership in surface areas of land. Also used to describe a lessee's right to use as much of the surface of the land as may be reasonably necessary for the conduct of opera­tions under the lease.

System Capacity, Distribution: The amount (volume) of capacity that a company owns for delivering volumes of natural gas or electricity to its customers. This is the capacity of the entire distribution network.

System Capacity, Transmission: The amount (volume) of capacity that a company owns for delivering wholesale volumes of natural gas or electricity to its customers. This is the capacity of the entire transmission network.

Tangible Development Costs: Costs incurred during the development stage for access, mineral-handling, and support facilities having a physical nature. In mining, such costs would include tracks, lighting equipment, ventilation equipment, other equipment installed in the mine to facilitate the extraction of minerals, and supporting facilities for housing and care of work forces. In the oil and gas industry, tangible development costs would include well equipment (such as casing, tubing, pumping equipment, and well heads), as well as field storage tanks and gathering systems.

Tanker and Barge: Vessels that transport crude oil or petroleum products.

Tar sands: Naturally occurring bitumen-impregnated sands that yield mixtures of liquid hydrocarbon and that require further processing other than mechanical blending before becoming finished petroleum products.

Test Well Contribution: A payment made to the owner of an adjacent or nearby tract who has drilled an exploratory well on that tract in exchange for information obtained from the drilling effort. (See definitions for Bottom Hole Contribution and Dry Hole Contribution.)

Texas Interconnect: Composed of the Electric Reliability Council of Texas (ERCOT) (as defined by the North American Electric Reliability Council).

Throughput: Estimated or actual volume of natural gas that may be carried on a pipeline over a specified period of time.

Timing Differences: Differences between the periods in which transactions affect taxable income and the periods in which they enter into the determination of pretax accounting income. Timing differences originate in one period and reverse or "turn around" in one or more subsequent periods. Some timing differences reduce income taxes that would otherwise be payable currently; others increase income taxes that would otherwise be payable currently. (See definition for Permanent Differences.)

Trading/Derivatives: Net revenue associated with wholesale trading of natural gas, natural gas liquids and electric power, other than the product itself.

Transfer Price: The monetary value assigned to products, services, or rights conveyed or exchanged between related parties, including those occurring between units of a consolidated entity.

Transmission: The assets associated with the delivery of large (bulk) volumes of natural gas or electric power. For electric power, the volumes for classification of transmission is 167KV and higher.

Transportation Sales: Revenues received from the delivery of, but not the sale of, wholesale and retail volumes of natural gas, natural gas liquids, and electric power.

Treating plant: A plant designed primarily to remove undesirable impurities from natural gas to render the gas marketable.

Uncompleted Wells, Equipment, and Facilities Costs: The costs incurred to (1) drill and equip wells that are not yet completed, and (2) acquire or construct equipment and facilities that are not yet completed and installed.

Undeveloped Property: Refers to a mineral property on which development wells or mines have not been drilled or completed to a point that would permit the production of commercial quantities of mineral reserves.

Unfinished Oils: All oils requiring further processing, except those requiring only mechanical blending. Unfinished oils are produced by partial refining of crude oil and include naphthas and lighter oils, kerosene and light gas oils, heavy gas oils, and residuum.

Uranium Exploration, Land Held For: Types of land holdings and acquisitions include fee land, mineral fee, leases, patented and unpatented claims, and options to purchase mineral fee. Excludes land acquired or held for production of uranium from known commercial uranium deposits.

Vessel: A ship used to transport crude oil, petroleum products, or natural gas products. Vessel categories are as follows: Ultra Large Crude Carrier (ULCC), Very Large Crude Carrier (VLCC), Other Tanker, and Specialty Ship (LPG/LNG). See Tanker and Barge.

Wasting (non-regenerative) Natural Resources: Naturally occurring substances that are classified as minerals, are present in or on the earth's surface, and are extracted therefrom by man but are not susceptible to man's attempts to replace them in their origi­nal state or in a similar state (although they, in a sense, may be replaced by nature over the long term).

By that definition, these resources include, but are not limited to: (1) crude oil and natural gas; (2) metals, such as copper, gold, iron, nickel, platinum, silver, tin, titanium, tungsten, uranium, and zinc; (3) coal; (4) salt; (5) sulfur; and (6) gravel, sand, and stone.

The natural resources excluded by this definition, because they are susceptible to attempts to replace them in their original state or in a similar state (being characteristically replaced by nature as well), are those that provide the basis for products normally associated with the industries of forestry, fishing, agriculture, and animal husbandry.

Well: A hole drilled in the earth for the purpose of (1) finding or producing crude oil or natural gas; or (2) providing services related to the production of crude oil or natural gas.

Note, for FRS reporting purposes, wells are classified as (1) oil wells; (2) gas wells; (3) dry holes; (4) stratigraphic test wells; or (5) service wells. The latter two types of wells are not counted for FRS reporting.

Oil wells, gas wells, and dry holes are classified as exploratory wells or development wells. Exploratory wells are subclassified as (1) new-pool wildcats; (2) deeper-pool tests; (3) shallow-pool tests; and (4) outpost (extension) tests. Well classifications reflect the status of wells after drilling has been completed.

·         Completion. The term refers to the installation of permanent equipment for the production of oil or gas. If a well is equipped to produce only oil or gas from one zone or reservoir, the definition of a "well" (classified as an oil well or gas well) and the definition of a "completion" are identical. However, if a well is equipped to produce oil and/or gas separately from more than one reservoir, a "well" is not synonymous with a "completion."

·         Completion Date. The date on which the installation of permanent equipment has been completed (for the production of oil or gas) as reported to the appropriate regulatory agency.

-          The date of completion of a dry hole is the date of abandonment as reported to the appropriate agency.

-          The date of completion of a service well is the date on which the well is equipped to perform the service for which it was intended.

·         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.

·         Directional (Deviated) Well. A well purposely deviated from the vertical using controlled angles to reach an objective location other than directly below the surface location. A directional well may be the original hole or a directional "sidetrack" hole that deviates from the original bore at some point below the surface. The new footage associated with directional "sidetrack" holes should not be confused with footage resulting from remedial sidetrack drilling.

         If there is a common bore from which two or more wells are drilled, the first complete bore from the surface to the original objective is classified and reported as a well drilled. Each of the deviations from the common bore is reported as a separate well.

·         Dry Hole. An exploratory or development well found to be incapable of producing either oil or gas in sufficient quantities to justify completion as an oil or gas well.

·         Exploratory Well. A well that is not a development well, a service well, or a stratigraphic test well as those items are defined elsewhere herein.

·         Free Well. A well drilled and equipped by an assignee as consideration for the assignment of a fractional share of the working interest, commonly under a farm-out agreement.

·         Gas Well. A well completed for production of natural gas from one or more gas zones or reservoirs. Such wells contain no completions for the production of crude oil.

·         Multiple Completion Well. A well equipped to produce oil and/or gas separately from more than one reservoir. Such wells contain multiple strings of tubing or other equipment that permit production from the various completions to be measured and accounted for separately.

·         For statistical purposes, a multiple completion well is reported as one well and classified as either an oil well or a gas well. If one of the several completions in a given well is an oil completion, the well is classified as an oil well. If all of the completions in a given well are gas completions, the well is classified as a gas well.

·         New Field Discovery Well. The first well drilled on a structural feature and/or stratigraphic condition that indicates the presence of a commercially significant quantity of hydrocarbons which may be produced. The discovery well may be drilled and abandoned without being completed to produce.

·         Oil Well. A well completed for the production of crude oil from at least one oil zone or reservoir.

·         Old Well Drilled Deeper. A previously drilled hole which is reentered and deepened by additional drilling. Such wells are reported as (1) oil or gas wells if completed for the production of oil and gas, or (2) dry holes if sufficient quantities of oil or gas are not found to justify completion at the greatest depth.

·         Old Well Worked Over. A previously drilled hole that is reentered for the purpose of improving or establishing production of oil or gas, but no additional footage is drilled.

·         Service Well. A well drilled, completed, or converted for the purpose of supporting production in an existing field. Wells of this class also are drilled or converted for the following specific purposes:

-          Gas injection (natural gas, propane, butane, or fuel-gas)

-          Water injection

-          Steam injection

-          Air injection

-          Salt water disposal

-          Water supply for injection

-          Observation

-          Injection for in-situ combustion.

·         Stratigraphic Test Well. A geologically directed drilling effort to obtain information pertaining to a specific geological condition that might lead toward the discovery of an accumulation of hydrocarbons. Such wells are customarily drilled without the intention of being comple­ted for hydrocarbon production. This classification also includes tests identified as core tests and all types of expendable holes related to hydrocarbon exploration.

·         Water Well. A well drilled to (1) obtain a water supply to support drilling or plant operations, or (2) obtain a water supply to be used in connection with an improved recovery program. Water wells of the first type are not reported. Water wells drilled in connection with an improved recovery program are reported as service wells.

Wellhead Price: The value at the mouth of the well. In general, the wellhead price is considered to be the sales price obtainable from a third party in an arm's length transaction. Posted prices, requested prices, or prices as defined by lease agreements, contracts or tax regulations should be used where applicable.

Wells and Related Equipment and Facilities: Include costs incurred to:

·         Drill and equip exploratory wells that have found proved reserves and exploratory-type stratigraphic test wells that have found proved reserves.

·         Obtain access to proved reserves and provide facilities for extracting, testing, gathering, and storing the oil and gas, including the drilling and equipping of develop­ment wells and development-type stratigraphic tests wells (whether successful or unsuccessful) and service wells.

Western Interconnect: Composed of the Western Electricity Coordinating Council (WECC) (as defined by the North American Electric Reliability Council).

Wholesale Power: Large volumes of electric power sold/delivered to electric power resellers.

Wholesaler/Reseller: A firm that is engaged in a trade or business that buys energy products and then sells them to a purchaser who is not the ultimate consumer of those products.

Working (top storage) gas: The volume of gas in the reservoir that is in addition to the cushion or base gas. It may or may not be completely withdrawn during any particular withdrawal season. Conditions permitting, the total working capacity could be used more than once during any season.

Working Interest: An interest in a mineral property that entitles the owner of that interest to all or a share of mineral production from the property, usually subject to a royalty.

A working interest permits the owner to explore, develop, and operate the property. The working interest owner bears the costs of exploration, development, and operation of the property, and in return is entitled to a share of the mineral production from the property, or to a share of the proceeds therefrom. It may be assigned to another party in whole or in part, or it may be divided into other special property interests.

Working Interest, Gross. The reporting company's working interest plus the proportionate share of any basic royalty interest or overriding royalty interest related to the working interest.

Working Interest, Net. The reporting company's working interest not including any basic royalty or overriding royalty interests.

Yellowcake: A natural uranium concentrate that takes its name from its color and texture. Yellowcake typically contains 68 to 88 percent U₃O₈ (uranium oxide) by weight. It is used as feedstock for uranium fuel enrichment and fuel pellet fabrication.