|
3-D Seismic |
Technology that bounces sound waves off
underground rock formations and processed to create a
three-dimensional picture of the subsurface. Identifies rock
formations most likely to contain accumulations of oil and gas. |
|
BCF
|
Billion cubic feet |
|
BCFE |
Billion cubic feet (of gas) equivalent |
|
Bbl |
Barrel of oil |
|
BOE |
Barrel of oil equivalent. A method of
equating oil, gas and natural gas liquids. Gas is converted to oil
based on its relative energy content at the rate of six Mcf of gas to
one barrel of oil. Natural gas liquids are converted based upon volume
where one barrel of natural gas liquids equals one barrel of oil. |
|
Capital Contributions |
The total investment in the Well by a Participant or by all Participants, as the case may be. |
|
Casing Point |
That point in the drilling of a well where drilling ceases upon reaching a desired formation and where Foster, as Investment Manager, must evaluate electric logs or other surveys or tests to determine whether, in the best judgment of Foster and the operator that the Participation Investor should begin incurring Completion Costs to put the well on production, or whether it should abandon the well as nonproductive. |
|
Code |
The Internal Revenue Code of 1986, as amended. |
|
Completion Costs |
The costs incurred after Casing Point to complete the well either as a dry hole (plug) or as a producing well.
|
|
Development Well |
A well drilled within a proven area of an oil and gas reservoir to the depth of a stratigraphic horizon known to be productive, but which may or may not be present at the site of the well. |
|
Downdip |
A term used in a hydrocarbon reservoir that is not flat, i.e., a dipping formation. In such a formation, oil is found downdip from the gas. |
|
Dry Hole |
A well that does not provide oil or gas in
sufficient quantities to justify completion. |
|
Enhanced Recovery |
Techniques used to increase or prolong
production from oil and natural gas fields. |
|
Exploratory Well
|
A well drilled to find and produce oil or gas in an unproven area, to find a new reservoir in a field previously found to be productive of oil and gas in another reservoir, or to extend a known reservoir. |
|
Fee Land
|
The most extensive interest that can be owned in land, including surface and mineral (including oil and gas)
rights. |
|
Field Formation
|
A geographical area with one or more oil and gas reservoirs. An identifiable layer of rocks named after its
geographical location and dominant rock type. |
|
"Frac", or fracturing
|
A well is "fraced" to stimulate or prolong oil & gas production. Special fluids are pumped into a wellbore with powerful hydraulic pumps to cause enough pressure to crack or fracture the formation. This process creates a plane of high-permeability sand, which usually allows the hydrocarbons to flow more freely into the wellbore. |
|
Full Cycle
Economics
|
Current year cash margin (reserves less
current year operating and administrative costs) minus 5-year funding
cost. |
|
Gross Acres
|
The total number of acres in which the
company owns a working interest. |
|
Gross Well
|
A well in which a working interest is
owned. |
|
Injection Well
|
A well where gas or water is injected back into the reservoir, usually to increase pressure and thereby stimulate production. In a gas injection well, gas is reinjected into the upper gas portion of the reservoir. Water injection wells are typically found offshore. |
|
Intangible Drilling Costs
|
Those items of costs relating to drilling, testing and completion operations on the Well which are not Tangible Costs.
|
|
Landowner's Royalty
|
The interest customarily retained under an oil and gas lease by the person who has the power to grant an oil and gas lease and which bears no part of the cost of drilling or producing the oil and natural gas. |
|
Lease
|
A legal contract that specifies the terms
of the business relationship between an energy company and a landowner
or mineral rights holder on a specific tract. |
|
MCFE
|
Thousand cubic feet (of gas) equivalent |
|
MMBOE
|
Million barrels of oil equivalent |
|
Mcf
|
A standard measurement unit for volumes of
natural gas that equals one thousand cubic feet. Six Mcf of natural
gas is approximately the energy equivalent of one barrel of oil. |
|
MMcf
|
Million cubic feet |
|
Mud, or drilling mud
|
A specialized mixture of fluids and solids, or liquid and gaseous fluids, used in drilling wellbores. There are many types of these drilling fluids, usually categorized by the major component such as water-base drilling fluid, gyp mud, emulsion mud, etc. |
|
Net Acres
|
Gross acres multiplied by the fractional
working interest in the property. |
|
Net Revenue Interest
|
The amount of the interest owned in the proceeds derived from a producing well less all Royalty interests. |
|
Offering
|
The offering of Working Interest Participation for the purpose of drilling and potentially completing the Wells. |
|
Operating Agreement
|
The A.A.P.L. Form 610-1989 Model Form Operating Agreement entered into by and between Foster and the Operator, pursuant to which Foster will act as Manager of the Prospects Wells.
|
|
Overriding Royalty Interest
|
A royalty interest which is typically retained by geologists or third parties which interest bears no part of the cost of drilling, completing or operating the well.
|
|
Pay Zone
|
The target of any drilling operation--a reservoir containing hydrocarbons that can be recovered in enough quantity to "pay" an income.
|
|
Perforate, or "perf"
|
"Perfing" a well means to create holes in the casing or liner of the wellbore through which oil and gas flows from the reservoir up to the surface. Perforation is accomplished with a perforating gun containing strategically placed explosive charges that is lowered into the wellbore.
|
|
Production
|
Total production refers to all the oil and
gas produced from a property. Gross Production: Total production
before deducting royalties. Net Production: Gross production, minus
royalties, multiplied by the company's fractional working interest. |
|
PV10 Value
|
Pre-tax present value of estimated future
net revenues discounted at 10% using SEC guidelines. |
|
Recompletion
|
The modification of an existing well for
the purpose of producing oil or gas from a different producing
formation. |
|
Reserves
|
Oil or gas contained in underground rock formations called reservoirs. Proved reserves are the estimated
quantities that geologic and engineering data demonstrate can be
produced with reasonable certainty from known reservoirs under
existing economic and operating conditions. Recoverable reserves are those that can be produced using all known primary and enhanced
recovery methods. |
|
Royalty Interest
|
An interest in an oil and gas property
entitling the owner to a share of oil and gas production free of costs
of exploration, development and production. |
|
Squeeze
|
Forcing cement into a wellbore to isolate perforations or repair damage. |
|
Tangible Costs
|
Those items of costs which in themselves have a salvage value and are ordinarily required to be capitalized for federal income tax purposes and which relate to the equipment placed on the Well. |
|
TCF
|
Trillion cubic feet |
|
Turnkey
|
A drilling contract that calls for a drilling contractor to drill a well, for a fixed price, to a specified depth and to adequately equip it so that the well is able to produce oil or gas. |
|
Updip
|
A term used in a hydrocarbon reservoir that is not flat, i.e., a dipping formation. In such a formation, gas is found updip from the oil. |
|
Waterflood
|
A method of increasing oil recovery from
an existing reservoir. Water is injected to force unrecovered oil out
of reservoir rock and into nearby oil wells. |
|
Working Interest
|
The interest in an oil and gas leasehold which is subject to the payment of the expenses of development, operation and maintenance of a well and is subject to the payment of Landowner's Royalty and Overriding Royalty Interests. |
|
Workover
|
To repair or stimulate an existing production well to restore or increase production. |
