AFE
Abbreviation for Authority for Expenditure

Bbl
Abbreviation for barrel. One barrel is the equivalent of 42 standard US gallons.

Btu
British Thermal Unit

Carried Working Interest
Percent of the net working interest granted to Operator by the Partners

Completion
The procedure by which a successful well is readied for production (e.g., fractured)

Dekatherm
One dekatherm equals to 10 therms or one million Btu

Drill-Down (or Drill-Deeper) Well
To re-enter and deepen an existing oil and gas well to an underlying geologic formation

Drilling Rig
The rig and ancillary equipment (air compressors, mud pump, drill pipe, etc.) used to drill the well from surface to total depth.

Dry Hole
An unsuccessful well, drilled without finding commercial quantities of oil or gas.

Farm-Out
An agreement between an existing production company which permits another production company to develop new wells on the existing company’s properties.

Fracturing
A method of breaking down a formation by pumping fluid material at very high pressures in order to increase production rates from a reservoir.

Gathering Line
The pipeline system operated by a third party which transports gas from the master sales meter to market.

Lease
A legal document conveying the right to drill for oil and gas or the tract of land on which a lease has been obtained where the producing wells are located.

Logging
Determining the exact depths and presence and characteristics of natural gas producing strata and foreign objects (e.g., casing depth, cement, etc.) present in a well.

Mcf
Abbreviation for thousand cubic feet

Natural Well
A well that is drilled and initially produces a large enough volume of gas that it does not require stimulation (or fracturing)

Net Working Interest
Working Interest less Royalty and Overriding Royalty. The percentage of the gross production revenue to be distributed.

Operator
A company or individual responsible for managing the exploration, development or production operations.

Overriding Royalty
The percent of the gross production revenues paid in addition to the royalty. May be used as an negotiation tool with mineral owners to grant leases and secure drilling prospects.

Rabbit
A system used to remove fluids which may migrate into the wellbore over time and inhibits well production. Also called a ‘plunger lift system’

Realized Gas Prices
Average wellhead price received for production less gas cleaning/extraction, compression, transportation and distribution charges.

Reversionary (Performance Incentive) Interest
Percent of the net working interest granted to Operator by the Partners upon attaining a pre-determined performance goal.

Royalty
The percentage of the gross production revenues entitled to the owner(s) of the mineral rights where the well is drilled. The standard is 12.5% in West Virginia.

Service Rig
A smaller rig used for well completion and/or periodic maintenance activities (e.g., installing tubing).

Slim-hole Well
To re-enter and deepen an existing oil and gas well which utilized small diameter casings to an underlying geologic formation

Stimulation
Term used for several processes to enlarge old channels or create new ones to enhance production. Examples include acidizing and fracturing.

Spot Market
An international market (e.g., NYMEX) in which oil or oil products are traded for delivery at the current price.

Spud
The initial penetration of the ground at the start of the drilling operation.

Swab
An activity to remove the fluids which may have migrated into the well bore and inhibits well production. Completed using a ‘swabbing rig’

Therm
A unit of heating value equivalent to 100,000 Btus

Turnkey
Operator completes the field activities from inception to completion at a lump sum not to exceed price as detailed on the AFE

Wellhead Prices
The cost of gas as it comes from the well excluding cleaning, compression, transportation, and distribution charges.

Well Tending
Routine maintenance and repairs needed throughout the life of the well to ensure that it produces at a maximum efficiency. Usually required more for oil than for gas wells.

Wildcat
A well drilled to an undeveloped geologic formation in an unexplored area

Working Interest
The interest in a mineral property that entitles the owner to a portion of the production from the property and may entitle the owner to royalty payment. The total interest (100%) or gross revenue of the oil and gas produced to be distributed.