Content:     Harold Syms  Pagemasters:     OMM Web Team

Resource Evaluation Resource Evaluation Glossary:   2-D Seismic A seismic survey where a line of geophones captures enough information to generate a two-dimensional (height and length) image of the Earth's subsurface directly below it. 3-D Seismic A seismic survey where a three-dimensional image of the subsurface can be developed by combining numerous energy sources and multiple lines of geophones; the image consists of height, length, and side to side information that gives better resolution to the subsurface. anticline An upfold or arch of stratified rock in which the beds or layers bend downward in opposite directions from the crest or axis of the fold. area of hydrocarbon potential That part of the planning area which has the primary geologic characteristics favorable for the generation and the accumulations of hydrocarbons. bid An offer for an OCS lease submitted by a potential lessee in the form of a cash bonus dollar amount or other commitments, as specified in the final notice of sale. bidding system A combination of terms and conditions under which a bid is submitted. The economic terms include, but are not necessarily limited to: (1) the minimum bid per acre; (2) the yearly rental; (3) the minimum royalty; and (4) the royalty or profit share rates imposed on future production from those tracts leased. See "royalty." bidding unit All unleased Federal portions of two or more blocks, whose combined acreage is 5,760 acres or less, which is offered in a specific lease sale as a single leasable entity. See "tract." block A geographical area of approximately 9 square miles (5,760 acres), which is used in official MMS protraction diagrams or leasing maps. See "Tract." bonus A payment equal to the high bid submitted by the successful bidder for the right to be awarded an oil and gas lease. cap rock An impermeable rock overlying an oil or gas reservoir that tends to prevent migration of fluids from the reservoir. continental margin A zone separating the emergent continents from the deep sea bottom. continental shelf A gently sloping submerged marginal zone of the continents extending from the shore outward through shallow waters to the continental slope. continental slope A relatively steep, narrow feature paralleling the continental shelf--the region in which the steepest descent to the ocean bottom occurs. crude oil A mixture of liquid hydrocarbons that exists in natural underground reservoirs as distinguished from refined oils manufactured from it and does not include liquid hydrocarbons produced from tar sand, gilsonite, oil shale, or coal. cumulative production The sum of all produced volumes of oil and gas prior to a specified point in time. Developed Reserves Developed reserves are expected to be recovered from existing wells including reserves behind pipe. Improved recovery reserves are considered developed only after the necessary equipment has been installed, or when the costs to do so are relatively minor. Developed reserves may be sub-categorized as producing or non-producing. development Activities following exploration including the installation of facilities and the drilling and completion of wells for production purposes. development tract A tract located on a common geologic structure with a leased tract, in which the leased tract has proven hydrocarbons. discovered resources (reserves) Hydrocarbons whose location and quantity are known or estimated from specific geologic evidence are discovered resources. Discovered resources include known resources, unproved reserves, and proved reserves depending upon economic, technical, contractual, or regulatory criteria. dome A roughly symmetrical upfold, the beds dipping in all directions, more or less equally, from a point; any structural deformation characterized by local uplift approximately circular in outline (for example, the salt domes of Louisiana and Texas. drainage tract A tract sharing a common reservoir with a leased tract containing hydrocarbon. drillship A self-propelled, self-contained vessel equipped with a derrick amidships for drilling wells in deep water. economically recoverable resource estimate Those resources both identified and undiscovered, that are commercially producible. The sum of reserves, inferred reserves, and undiscovered economically recoverable resources. environmental impact statement An analysis required by NEPA in relation to any major action proposed by the Federal Government that could have a significant effect on the human environment. exclusive economic zone The maritime region adjacent to the territorial sea, extending 200 nautical miles from the baselines of the territorial sea, in which the United States has exclusive rights and jurisdiction over living and nonliving natural resources. exploration The process of searching for minerals preliminary to development. Exploration activities include: (1) geophysical surveys, (2) any drilling to locate an oil or gas reservoir, and (3) the drilling of additional wells after a discovery to delineate a reservoir. It enables the lessee to determine whether to proceed with development and production. fault A fracture in the Earth's crust accompanied by a displacement of one side of the fracture with respect to the other. field An area within which hydrocarbons have been concentrated and trapped in economically producible quantities in one or more structural or stratigraphically related reservoirs. formation A bed or deposit sufficiently homogeneous to be distinctive as a unit. Each different formation is given a name, frequently as a result of the study of the formation outcrop at the surface and sometimes based on fossils found in the formation. gas hydrates Ice like structures of gas and water in which gas molecules are trapped within a framework or cage of water molecules. geology report A report prepared for each sale providing information on the general geology, resource potential, environmental geology, and geohazards of the planning area. lease A contract authorizing exploration for and development and production of minerals for a specified period of time over a given area. The meaning of "Lease" depends upon its use in context. lease sale An MMS proceeding by which leases for certain OCS tracts are offered for sale by competitive sealed bidding and during which bids are received, announced, and recorded. lease term Duration of a lease. Oil and gas leases are issued for an initial period of 5 years or not to exceed 10 years where such longer period is necessary to encourage exploration and development in areas because of unusually deep water or other unusually adverse conditions. Once production is reached, the term continues as long as there is production in paying quantities. lessee A person or persons to whom a lease is awarded; the recipient of a lease. See "Operator." limestone A rock that is formed chiefly through the accumulation of organic remains such as shells and corals consisting mainly of calcium carbonate. minimum economic field size The lowest amount of resources for a prospect that would give that prospect a positive resource economic value. natural gas A mixture of hydrocarbon compounds and small quantities of various nonhydrocarbons existing in gaseous phase at the surface or in solution with crude oil in natural underground reservoirs at reservoir conditions. net profit share A bidding system for leasing tracts on the OCS that uses the cash bonus as the bid variable and requires a fixed annual rental payment and net profit share payments at a fixed percentage rate that is constant for the duration of the lease. official protraction diagram Leasing maps that designate a planning area by using the Universal Transverse Mercator Grid System and is divided into blocks. operator The individual, partnership, firm, or corporation having control or management of operations on a leased area or a portion thereof. The operator may be a lessee, designated agent of the lessee, or holder of rights under an approved operating agreement. outer continental shelf The part of the continental shelf seaward of the line that marks State ownership; that part of the offshore lands under Federal jurisdiction. permeability The measure of a rock's ability to transmit fluids; a measure of the ease with which fluids can flow through a porous rock. petroleum An oily, flammable bituminous liquid that occurs in the upper strata of the Earth, either in seepages or in reservoirs; essentially a complex mixture of hydrocarbons of different types with small amounts of other substances. play A group of known and/or postulated pools that share common geologic, geographic, and temporal properties, such as history of hydrocarbon generation, migration, reservoir development, and entrapment. pool A pool is a discovered or undiscovered accumulation of movable hydrocarbons, typically within a single stratigraphic interval, that is hydraulically separated from any other hydrocarbon accumulation. porosity The ratio of the holes, voids, or pores in a rock to its total volume or size. Also, a measure of the capability to contain fluid within void spaces in a rock. possible reserves Possible reserves are those unproved reserves which analysis of geological and engineering data suggests are less likely to be recoverable than probable reserves. In this context, when probabilistic methods are used, there should be at least a 10% probability that the quantities actually recovered will equal or exceed the sum of estimated proved, plus probable, plus possible reserves. In general, possible reserves may include (1) reserves which, based on geological interpretations, could possibly exist beyond areas classified as probable, (2) reserves in formations that appear to be petroleum bearing, based on log and core analysis but may not be productive at commercial rates, (3) incremental reserves attributed to infill drilling that are subject to technical uncertainty, (4) reserves attributed to improved recovery methods when (a) a project or pilot is planned, but not in operation and (b) rock, fluid, and reservoir characteristics are such that a reasonable doubt exists that the project will be commercial, and (5) reserves in an area of the formation that appears to be separated from the proved area by faulting and geological interpretation indicates the subject area is structurally lower than the proved area. Often referred to as P3. probability A means of expressing an outcome on a numerical scale that ranges from impossibility to absolute certainty; the chance that a specified event will occur. probable reserves Probable reserves are those unproved reserves which analysis of geological and engineering data suggests are more likely than not to be recoverable. In this context, when probabilistic methods are used, there should be at least a 50 percent probability that the quantities actually recovered will equal or exceed the sum of estimated proved plus probable reserves. In general, probable reserves may include (1) reserves anticipated to be proved by normal step-out drilling where sub-surface control is inadequate to classify these reserves as proved, (2) reserves in formations that appear to be productive, based on well log characteristics, but lack core data or definitive tests and which are not analogous to producing or proved reservoirs in the area, (3) incremental reserves attributable to infill drilling that could have been classified as proved if closer statutory spacing had been approved at the time of the estimate, (4) reserves attributable to improved recovery methods that have been established by repeated commercially successful applications when (a) a project or pilot is planned, but not in operation and (b) rock, fluid, and reservoir characteristics appear favorable for commercial application, (5) reserves in an area of the formation that appears to be separated from the proved area by faulting and the geologic interpretation indicates the subject area is structurally higher than the proved area, (6) reserves attributable to a future workover, treatment, re-treatment, change of equipment, or other mechanical procedures, where such procedure has not been proved successful in wells which exhibit similar behavior in analogous reservoirs, and (7) incremental reserves in proved reservoirs where an alternative interpretation of performance or volumetric data indicates more reserves than can be classified as proved. Often referred to as P2. production The phase of oil and gas operations that deals with bringing the well fluids to the surface and separating them, storing them, gauging them, and otherwise preparing the products for shipment. proprietary information Geologic and geophysical data, information, and derivatives thereof that cannot be released to the public for a specified term because of Federal law, regulations, or statutes, or because of contractual requirements. prospect Potential accumulation that is sufficiently well defined to represent a viable drilling target. proved reserves Proved reserves are those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under current economic conditions, operating methods, and government regulations. Proved reserves can be categorized as development or Undeveloped. If deterministic methods are used, the term reasonable certainty is intended to express a high degree of confidence that the quantities will be recovered. If probabilistic methods are used, there should be at least a 90% probability that the quantities actually recovered will equal or exceed the estimate. Often referred to as P1, sometimes referred to as “proven”.   proven tract A previously leased tract, which is now expired, that contains known hydrocarbon reserves. The volume of reserves may or may not be known. qualified bidder A bidding entity or person who has met the appropriate requirements of 30 CFR 256, Subpart G and the notice of sale. reserves Those quantities of hydrocarbons which are anticipated to be commercially recovered from known accumulations from a given date forward. reserves appreciation The observed incremental increase through time in the estimates of reserves of an oil and/or gas field. It is that part of the known resources over and above proved and unproved reserves that will be added to existing fields through extension, revision, improved recovery, and the addition of new reservoirs. Also referred to as reserves growth or field growth. reservoir A subsurface, porous, permeable rock body in which oil or gas or both have accumulated. resources Concentrations in the earth’s crust of naturally occurring liquid or gaseous hydrocarbons that can conceivably be discovered and recovered. Normal use encompasses both discovered and undiscovered resources. royalty A share of the minerals (oil and gas) produced from a lease; the percentage of oil and gas production, usually fixed at 12 1/2 percent or 26 2/3 percent, either in money or in kind, which a lessee is required to pay the Treasury Department. sandstone A sedimentary rock made up of sand-size grains that usually consist of quartz more or less firmly united by some cement (as silica, iron oxide, or calcium carbonate). seismic Pertaining to, characteristic of, or produced by earthquakes or Earth vibrations; having to do with elastic waves in the Earth. seismic survey A method of geophysical prospecting using the generation, reflection, refraction, detection, and analysis of elastic waves in the Earth. shale An indurated rock that is formed by the consolidation of clay or mud. sliding scale royalty A bidding system for leasing tracts on the OCS that uses cash bonus as the bid variable and where the royalty payment is not fixed but is dependent upon the value of production during each calendar quarter. source bed Rocks containing relatively large amounts of organic matter that is transformed into hydrocarbons. spud To begin drilling a well. statute mile A common measure of distance equal to 5,280 feet (1,609 meters). stratum (pl. strata) A tabular mass or thin sheet of rock made up usually of a series of layers lying between beds of other kinds. tract A designation assigned, for administrative and statutory purposes, to a block or combination of blocks that are identified by an official protraction diagram prepared by the MMS. A lease is granted for a tract. A tract may not exceed 5,760 acres unless it is determined that a larger area is necessary to comprise a reasonable economic production unit. See "Block" and "Bidding Unit." trap A geologic feature that permits the accumulation and prevents the escape of accumulated fluids (hydrocarbons) from the reservoir. Undeveloped Reserves Undeveloped reserves are expected to be recovered: (1) from new wells on undrilled acreage, (2) from deepening existing wells to a different reservoir, or (4) where a relatively large expenditure is required to (a) recomplete an existing well or (b) install production or transportation facilities for primary or improved recovery projects. undiscovered conventionally recoverable resources That portion of the hydrocarbon potential that is producible, using present or foreseeable technology without consideration of economic feasibility. undiscovered economically recoverable resources The portion of the undiscovered technically recoverable resource that is economically recoverable under imposed economic and technologic conditions. undiscovered resources Resources postulated, on the basis of geologic knowledge and theory, to exist outside of known fields or accumulations. Included also are resources from undiscovered pools within known fields to the extent that they occur within separate plays. undiscovered technically recoverable resources Resources in undiscovered accumulations analogous to those in existing fields producible with current recovery technology and efficiency, but without any consideration of economic viability. These accumulations are of sufficient size and quality to be amenable to conventional primary and secondary recovery techniques. Undiscovered technically recoverable resources are primarily located outside of known fields. unproved reserves Unproved reserves are based on geologic and/or engineering data similar to that used in estimates of proved reserves; but technical, contractual, economic, or regulatory uncertainties preclude such reserves being classified as proved. Unproved reserves may be further classified as probable reserves and possible reserves. Unproved reserves may be estimated assuming future economic conditions different from those prevailing at the time of the estimate. The effect of possible future improvements in economic conditions and technological developments can be expressed by allocating appropriate quantities of reserves to the probable and possible classifications. viable prospect A prospect having a "most probable" conditional resource level that exceeds the minimum economic field size for that particular cost regime. wildcat tract A tract that is not a drainage, development, or proven tract, and has a high risk in addition to sparse well control.

Last Updated: 03/31/2009, 03:48 PM Central Time