Oil & Gas Glossary

A unit of energy equal to one barrel (42 US gallons) of crude oil. Used to compare and aggregate different hydrocarbon streams — oil, natural gas, and natural gas liquids — on a common energy basis. The standard conversion is 6 Mcf of natural gas = 1 BOE.

A method for forecasting future production from a well or field by fitting a mathematical model to historical production data. The most widely used approach is the Arps method, which describes three decline types: exponential, hyperbolic, and harmonic.

The total volume of hydrocarbons — oil, gas, or both — expected to be economically produced from a well or reservoir over its entire producing life, including past production and projected future production.

The production rate of a newly completed well, typically measured over the first 24 hours, 30 days, or 90 days of production. IP rate is a key indicator of well quality and is used to benchmark completions against type curves and offset wells.

A regulatory authorization required before drilling a new oil or gas well. In federal and many state jurisdictions, the permit is called an Application for Permit to Drill (APD). Permit filings are a leading indicator of operator activity and are publicly available from state regulatory agencies.

The fraction of gross production revenue that a working interest owner is entitled to receive after all royalty burdens — including landowner royalties and overriding royalties — have been deducted.

A percentage ownership in an oil and gas lease that entitles the owner to a share of production revenues but also obligates them to pay a proportionate share of all drilling, completion, and operating costs.

Reserves from wells that are currently producing and expected to continue producing under existing operating conditions. PDP is the highest-confidence and most liquid reserve category, and forms the core of most producing property valuations.

The present value of estimated future net revenues from proved oil and gas reserves, discounted at an annual rate of 10%. PV10 is the industry standard metric for valuing producing oil and gas properties and is required to be disclosed in SEC filings by public E&P companies.

A unique 14-digit identifier assigned to every oil and gas well drilled in the United States by the American Petroleum Institute. The API number encodes the state, county, and unique well identifier, and serves as the universal primary key for linking well data across regulatory databases.

The primary state agency that regulates the Texas oil and gas industry. Despite its name, the RRC has not regulated railroads since 2005. It issues drilling permits, oversees well operations, collects monthly production reports from all Texas operators, and maintains the public production database that is the largest single source of well-level production data in the United States.