Links Railroad Commission of Texas
http://www.rrc.state.tx.us/ - Railroad Commission of Texas: Texas regulatory agency, provides information about Texas Alternative Fuels, LP Gas, Natural Gas, Crude Oil, Surface Mining & Reclamation. U.S. Department of Fossil Energy
http://www.fe.doe.gov/programs/reserves/ - information on the the U.S. strategic reserve and the Northeast heating oil reserve. From the U.S. Department of Energy. Bloomberg Energy
http://www.bloomberg.com/energy/ - get updated prices and data on crude and home heating oil, gasoline, and natural gas. NaturalGas.org
http://www.naturalgas.org/ - Naturalgas.org is presented as an educational website covering a variety of topics related to the natural gas industry. The purpose of this website is to provide visitors with a comprehensive information source for topics related to natural gas, and present an unbiased learning tool for students, teachers, industry, media, and government. Additional Information About The Oil & Gas Industry: The Oil & Gas Industry The secret to asset appreciation is to buy in the path of growth.
Oil and natural gas are the most important natural resources known to mankind. For most societies in the world, oil and natural gas are the principal natural resources that fuel their economies.
Why, in this great age of communication and technology, do we need to be concerned about these natural resources? Simple. Nearly 98% of everything you have or do is in some way related to crude oil and natural gas. Heat for your home, gas for your car, 2 liter plastic bottles for pop, and petroleum jelly are just a few examples of products created from these resources.
The United States has the greatest standard of living in the world, as well as the largest economy. Why? Because we have always tried to maintain control over the supply, as well as price, of oil. Over the last 10 years, the U.S. economy has undergone the largest economic expansion in history and cheap oil has fueled this unprecedented growth. Unlike the 1970s, when the U.S. was held at bay by OPEC withholding oil production for political reasons, the growth of the oil industry during the 1990s, and beyond, will be more likely be determined by the laws of supply and demand.
As democracy and capitalism are spreading around the world, global oil consumption is at record levels. Throughout Latin America, Russia, India and Asia, economic growth is accelerating at a remarkable pace; much faster than anything we have seen in the U.S. Recently, Forbes described the development now exploding across Asia: "You can almost smell the money in Shanghai, Bangkok, Kuala Lumpau or just about any East Asian commercial center outside Japan these days. Traffic snarled, construction booming, glitzy shopping malls showing the latest Hollywood movies... These formerly traditional societies, stagnant for centuries, are exploding into the modern capitalist world and spawning vast new middle classes with a taste for consumer goods and the means to indulge that taste. Healthy economics generate great wealth, and Asia is churning out billionaires as though on a conveyor belt."
-- Forbes In the near future, the United States will be called upon to sustain its domestic reserves while feeding a global need for oil and natural gas. Richman Oil is positioned to benefit from this growth, are you? Common Terminology 3-D seismic
- A relatively new exploration technique used in the search for oil and gas underground structures. The basic premise behind seismic is the same as ultra sound technology used in the medical field. Sound from a shot hole is recorded from geophones and interpreted to give a picture of the underlying structures within the earth. 3-D has now become a common practice to redefine and identify known as well as unknown structures. Many times these structures contain traps that hold oil and gas yet to be discovered. BCF (billion cubic feet)
- The cubic foot is a standard unit of measure for gas at atmospheric pressure. Completed well
- A well made ready to produce oil or natural gas. Completion involves cleaning out the well, running steel casing and tubing into the hole, adding permanent surface control equipment, and perforating the casing so oil or gas can flow into the well and be brought to the surface. Cash-on-Cash Return
- cash income stream produced by capital invested. Deductions
- Tax items which may be subtracted from gross income to arrive at taxable income in Federal income tax computations. Depletion, restoration of
- In federal income taxation, the adding back to income of depletion allowance taken on minerals not produced. Development
- A well drilled in an already proven natural gas or oil field. Directional drilling
- Drilling at an angle, instead of on the perpendicular, by using a whipstock to bend the pipe until it is going in the desired direction. Directional drilling is used to develop offshore leases, where it is very costly and sometimes impossible to prepare separate sites for every well; to reach oil beneath a building or some other location which cannot be drilled directly; or to control damage or as a last resort when a well has cratered. It is much more expensive than conventional drilling procedures. Exploration
- The search for oil and gas. Exploration operations include: aerial surveys, geophysical surveys, geological studies, core testing and the drilling of test wells. Exploratory well
- A well drilled to an unexplored depth or in unproven territory, either in search of a new reservoir or to extend the known limits of a field that is already partly developed. Formation
- A geological term that describes a succession of strata similar enough to form a distinctive geological unit useful for mapping or description (interchangeable with “sands” or “zones”). Fracturing
- A well stimulation technique in which fluids are pumped into a formation under extremely high pressure to create or enlarge fractures for oil and gas to flow through. Proppants such as sand are injected with the liquid to hold the fractures open. Front-end costs
- Costs that are paid out of initial investment in a venture, first, before the venture activities actually begin. History of a well
- A written account of a well's drilling and operation, required by law in some states. Horizontal drilling
- The newer and developing technology that makes it possible to drill a well from the surface, vertically down to a certain level, and then to turn at a right angle, and continue drilling horizontally within a specified reservoir, or an interval of a reservoir Hydrocarbons
- A large class of organic compound of hydrogen and carbon. Crude oil, natural gas, and natural gas condensate are all mixtures of various hydrocarbons, among which methane is the simplest. Intangible drilling costs
- Expenditures, deductible for federal income tax purposes, incurred by an operator for labor, fuel, repairs, hauling, and supplies used in drilling and completing a well for production. Joint Operating Agreement
- A detailed written agreement between the working interest owners of a property which specifies the terms according to which that property will be developed. Joint venture
- A large-scale project in which two or more parties (usually oil companies) cooperate. One supplies funds and the other actually carries out the project. Each participant retains control over his share, including liability and the right to sell. Limited partnership
- A partnership in which the general partner manages the partnership's activities and is solely liable for them. The limited partners are liable only to the extent of their contributions. MMCF Million cubic feet
- The cubic foot is a standard unit of measure for quantities of gas at atmospheric pressure. Natural gas
- A mixture of hydrocarbon compounds and small amounts of various nonhydrocarbons (such as carbon dioxide, helium, hydrogen sulfide, and nitrogen) existing in the gaseous phase or in solution with crude oil in natural underground reservoirs. Net Revenue Interest (NRI)
- The percentage of revenues due an interest holder in a property, net of royalties or other burdens on the property. A landowner leases his mineral rights to an oilman. The landowner retains a royalty of 1/8 (=12.5%); his net revenue interest is 12.5%. The oilman's net revenue interest would be 87.5% (=100% - 12.5%). Operator
- The individual or company responsible for the drilling, completion and production operations of a well, and the physical maintenance of the leased property. Payoff
- The time when a well's production begins to bring in revenues. Payout
- The amount of time it takes to recover the capital investment made on a well or drilling program. Perforating gun
- An instrument lowered at the end of a wireline into a cased well. It contains explosive charges that can be electronically detonated from the surface. Perforation
- A method of making holes through the casing opposite the producing formation to allow the oil or gas to flow into the well. See the Gun perforation. Permeability
- A measure of the ease with which a fluid such as water or oil moves through a rock when the pores are connected. Geologists express permeability in a unit named the darcy, but oilmen use the millidarcy because most of the rocks they come in contact with are not very permeable. Pipeline
- A tube or system of tubes used for the transportation of oil or gas. Types of oil pipelines include: lead lines, form pumping well to a storage tank; flow lines, from flowing well to a storage tank; lease lines, extending from the wells to lease tanks; gathering lines, extending from lease tanks to a central accumulation point; feeder lines, extending from leases to trunk lines; and trunk lines, extending from a producing area to refineries or terminals. Porosity
- A measure of the number and size of the spaces between each particle in a rock. Porosity affects the amount of liquid and gases, such as natural gas and crude oil, that a given reservoir can contain. Recoverable resources
- An estimate of resources, including oil and/or natural gas, both proved and undiscovered, that would be economically extractable under specified price-cost relationships and technological conditions. Reserve
- A porous and permeable underground formation of producible oil and/or natural gas, confined by impermeable rock or water barriers, and characterized by a single natural pressure system. Reservoir
- A porous, permeable sedimentary rock formation containing quantities of oil and/or gas enclosed or surrounded by layers of less permeable or impervious rock. Also called a "horizon." Spud
- To spud a well means to start the initial drilling operations. Turnkey
- A drilling contract that calls for a drilling contractor to drill a well, for a fixed price, to a specified depth. The purpose of drilling a well by turnkey contract may be related to the timing of Federal income tax deductions. For income tax purposes, expenses are deductible from gross income as they are incurred. When a turnkey contract is entered into toward the end of the current tax year, the drilling costs may be pre-paid at that time. The idea is to give a working interest owner (or investor) in the well, the opportunity to deduct the intangible drilling costs from his gross income in the current tax year. Zone
- A specific interval of rock strata containing one or more reservoirs, used interchangeably with “formation” and “sands.” Fundamentals of Developing Oil & Gas Fields
Hydrocarbons - crude oil and natural gas - are found in certain layers of rock that are usually buried deep beneath the surface of the earth. In order for a rock layer to qualify as a good source of hydrocarbons, it must meet several criteria. For one thing, good reservoir rocks (a reservoir is a formation that contains hydrocarbons) have porosity. Porosity is a measure of the openings in a rock, openings in which petroleum can exist. Even though a reservoir rock looks solid to the naked eye, a microscopic examination reveals the existence of tiny openings in the rock. These openings are called pores. Thus a rock with pores is said to be porous and is said to have porosity. Another characteristic of reservoir rock is that it must be permeable. That is, the pores of the rock must be connected together so that hydrocarbons can move from one pore to another. Unless hydrocarbons can move and flow from pore to pore, the hydrocarbons remain locked in place and cannot flow into a well.