oil and gas accounting

41 terms by cnguyen120589 

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integrated oil and gas company

is one involved in E&P activities as well as at least one downstream activity

independent oil and gas company

is one involved primarily in only E&P activities

fault trap

a trap formed when the movement of the earth's crust causes different rock strata to offset or shear off. a nonporous rock formation that has shifted stops the movement of oil or gas within an offsetting formation that allows petroleum to migrate

anticline

a trap formed by the folding of the earth's crust dome. this upward folding is caused by pressures developed from the earth's molten core. an impervious or nonporous layer of rock overlying traps the oid or gas in the structure. most of the earth's oil and gas reserves are found in this.

salt dome

with substantial heat and pressure, salt buried deep within the earth may slowly begin to move upward, as it does so the rock layers are cracked, bent and folded, often oil and gas are trapped in these cracked and folded rock beds

porosity

is the measure of the pore space

permeability

measures the connectability of the pores, which detetmines the ability of the petroleum to flow through the rock from one pore space to another

reconnaissance

survey is a G&G study covering a large or broad area

detailed survey

is a G&G study covering a smaller area called an area of interest

mineral rights

refer to the ownership, conveyed by deed, of any mineral beneath the surface

surface owner

has the right to use the surface in any legal way that the owner deems appropriate

royalty interest

this type of mineral interest is created by leasing

working interest

this interest is created via leasing and is responsible for the exploration, development, and operation of a property

overriding royalty interest

is a nonworking interest created from the working interest

production payment interest

this interest is a nonworking interest created out of a working interest and is similar to an ORI except that it is limited to a specified amount of oil or gas, money, or time, after which it reverts back ti interest from which it was created and ceases to exist

lessor

is the mineral rights owner who leases the property to another party and retains a royalty interest

lessee

the party leasing the property, receives a working interest

day rate

generally used. payment based on the number of days drill

footage rate

payment based on the number of feet drilled

turnkey basis

payment of a fixed sum of money based on drilling to a certain depth or stage of completion

spud date

is the date the rotary drilling bit touches the ground

directional wells

are wells that are normally drilled straight to a predetermined depth and then curved or angled so that the bottom of the wellbore is at the desired location

horizontal wells

are also initially drilled straight down but then are gradually curved until the hole runs parallel to the earth's surface

logged

after total depth has been reached, this device lowers to the bottom of the well and then pulling it back up to the surface

secondary recovery

consists of inducing an artificial drive into a formation to replace the natural drive

tertiary recovery

methods include injection of chemicals, gas, or heat into the well to modify the fluid properties and thereby enhance the movement of the oil through the formation

delineation well

used for to refer to the first well drilled in a location where there has been no previous drilling or production. what size, how broad it is, exploratory or developmental

council of petroleum accountants societies

COPAS

COPAS

was formed in 1961, with its activities and projects directed primarily toward issues and problems encountered in joint interest operations

nondrilling exploration costs

gets expense

dry hole contribution

payment is made only if the well is dry or not commercially producible

bottom-hole contribution

payment is made when an agreed-upon depth is reached, regardless of the outcome of the well

land in fee

means that both the mineral rights and the surface rights are acquired rather than just the mineral rights

nonrecoverable

the payments are additional costs of acquiring the property and should be capitalized as an additional leasehold

recoverable

the payments should be held in a receivable or suspense account until recovered. if not recovered it should be expense as surrendered lease expense or surrender and abandonment expense

impairment

occurs when there is an indication that a property's value has declined to an amount that is less than the purchase price

how often do you check for impairment

periodically

land department

acts on information obtained from the exploration department's activities and from land department scouts in acquiring properites

intangible drilling costs

(IDC) may be expensed as incurred

christmas tree

refers to the valves, pipes, and fittings assembly arrangemnet of the valves, pipes, and fittings assembly that is used to co9ntrol the flow of oil and gas form the wellhead

suspended well cost

up to 1 year/ demonstrate after 1st year

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