Index

INDEX

Terms in bold are defined in the Glossary.

Symbols_ _________________
2001 PricewaterhouseCoopers Survey of U.S. Petroleum
Accounting Practices . . .Appendix 4, 4-1
asset grouping . . .302
cost centers by field . . .284
cost recovery oil . . .436
DCF . . .547
DD&A . . .284
dry hole costs . . .441
expected future cash flow . . .303-305
FAS 144 impairment . . .304
full cost . . .441
gas imbalance . . .252-253
general and administrative overhead . . .304
individually significant lease . . .96
interest capitalization . . .144, 146
lease overhead costs . . .92
net profits interests . . .382
oil inventory . . .52, 248, 258
reserve revisions at interim . . .291

A_ _______________________
AAPL (See American Association of Professional Landmen)
Abandon (or surrendering) . . .73, 140, 151, 166, 278, 288,
313-314, 336-339, 357-358, 433, 443, 448, 533, 541, 588,
2-10 to 2-11
property . . .51, 93, 443
well . . .125, 138, 140, 358, 452
Absorber* (a type of gas dehydrator)
Accounting centers . . .220, 224, 225, 228, 230
Accounting function, organization . . .25, 26, 29, 224, 225
Accounting method change (from full cost to successful
efforts or vice versa) . . .1-12
Accounting Principles Board Opinions
APB No. 11, Accounting for Income Taxes . . .465, 475
APB No. 12, Omnibus Opinion . . .488
APB No. 18, The Equity Method of Accounting for
Investments in Common Stock . . .411
APB No. 21, Interest on Receivables and Payables
. . .378
APB No. 22, Disclosure of Accounting Policies . . .480
APB No. 23, Accounting for Income TaxesSpecial
Areas . . .469, 475
APB No. 29, Accounting for Nonmonetary Transactions
. . .232
APB No. 30, Reporting the Results of Operations
Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions . . .305, 306
Accounting Procedure Joint Operations exhibit . . .153, 155
Accounting Research Bulletin No. 43 . . .373
Accounting Research Study No. 11, Financial Reporting in
the Extractive Industries . . .36
Accounting Series Release . . .37, 329, 2-31 (SeeSecurities
and Exchange Commission [SEC])
Accounts receivable approach . . .230

Acidize . . .126, 260, 452

Acquisition costs . . .36, 39, 43, 45, 46, 50, 91, 93, 97, 98,
101-104, 242, 282, 285, 286, 292, 339, 361, 362, 363,
428, 490, 491, 496, 557, 1-9, 2-7, 2-8, 2-10, 2-11, 2-20, 3-2
Acquisition well*
Acre-foot . . .273
Acreage . . .45, 50, 68, 69, 75, 76, 78, 83, 85-87, 91-93, 95,
96, 100, 106, 111, 144, 150, 271, 284, 288, 356, 395, 396,
401, 402, 404, 423, 449, 469, 483, 484, 489, 497, 557,
563, 1-3, 2-18, 2-30
ACT or LACT system. (SeeLACT unit)
Administrative department (of an E&P company) . . .25
Adsorption plant*. (SeeEquipment [lease and well])
Ad valorem taxes . . .42, 54, 93, 220, 227, 242, 261, 1-5, 2-5
Advance royalty*
Aerial photography . . .62
AFE. (SeeAuthorization for expenditure)
After-tax DCFA. (SeeDiscounted cash flow analysis)
After-tax discount rate (ATDR) . . .543, 544
Air drilling*
Air/gas lift*. (SeeGas [natural])
Alaskan North Slope oil. (See North Slope of Alaska)
Allowable* . . .28, 187, 242, 361, 366, 397, 433, 460, 465,
535, 544
American Association of Petroleum Geologists (AAPG) . . .32,
65, 266, 267
American Association of Professional Landmen (AAPL) . . .
32, 153
American Institute of Certified Public Accountants (AICPA) . . .
34, 36, 162, 280, 411, 530, 2-2, 2-37, 4-1
American Jobs Creation Act of 2004 . . .462
American Petroleum Institute (API) . . .2, 14, 32, 107, 109, 110,
130, 176, 179-185, 198, 200, 202-205, 454, 562, 3-8, 4-2
AMI. (SeeArea of mutual interest [AMI])
Amortization. (SeeDD&A)
Amortization base. (SeeDD&A)
Angle of deflection*
Annular space (annulus) . . .118
ANS crude. (SeeNorth Slope of Alaska)
Anticlines . . .58, 59
API. (SeeAmerican Petroleum Institute [API])
API gravity . . .2, 179-181, 184, 185, 198, 200, 202-205, 562
API well number*
APO (after payout). (SeePayout)
Apportionment accounts . . .49, 257, 259, 261-263, 294
Area of interest . . .24, 69, 77, 92, 148, 438, 448, 449
Area of mutual interest (AMI) . . .149, 150
Arms-length transaction . . .492, 538, 543, 2-21
ARO. (SeeAsset retirement obligation)
Artificial lift . . .127
Asset retirement obligation (ARO) . . .44, 302, 313, 332, 336,
340, 341, 343-345, 490, 491, 497, 514, 515, 532, 533,
540, 3-5
Assign interest . . .83, 403
assignee . . .352, 388
assignment . . .353, 383, 385, 388
assignor . . .76, 352, 366, 388, 389
associated gas . . .129

* This supplemental term defined in the Glossary is not used in the chapters or appendices.

Index

Atlantic Richfield Company (ARCO) . . .7, 402, 550, 564

Atmospheric pressure base . . .3
Audits, joint interest . . .27, 154, 166, 167
Authorization (or authority) for expenditure (AFE) . . .47,
48, 67, 70-75, 109, 131, 140-143, 154, 157, 159, 160, 161,
300, 313, 443, 3-3
drilling operations . . .109, 142
G&G . . .69, 71-78
model form operating agreement . . .32, 149
procedures . . .140-142
supplemental AFE . . .141, 143
Automatic custody transfer system. (SeeLACT unit)

B_ _______________________
Baffle*
Banking (of natural gas). . .197, 214
Barrel (bbl) . . .3 (See alsoVolumes)
Barrels of oil equivalent (BOE) . . .3, 289 (See alsoEquivalent
barrel [BOE] or Mcf [Mcfe])
Basic sediment and water (BS&W) . . .172
Basis
book . . .326
hedging . . .31, 51, 52, 208, 334, 497, 526, 527, 533,
571, 572, 576, 577-580, 581
tax . . .51, 301, 302, 305, 323, 326-328, 406, 414, 415,
465-468, 470, 473, 475, 502, 506, 508, 535, 540, 546,
1-8, 2-22
Battery (tank battery) . . .173, 176, 553
Bbl. (SeeBarrel [bbl])
Bbl/d* (barrels per day). (SeeBOPD [barrels of oil per day])
Bcf (billion cubic feet) . . .3 (See alsoVolumes)
Beam well*
Before-tax DCF . . .540, 546, 547
Behind-pipe reserves. (SeeReserves, oil & gas)
Benchmark crude . . .9
BHP (bottom-hole pressure) . . .275
Bid cycle . . .209
Bid week . . .209
Bit (drill bit) . . .10, 66, 110, 113-118, 121-125, 166
Bleed*
BLM (Bureau of Land Management). (SeeU.S. government)
Bloombergs Business News . . .205
Blow by*
Blowout . . .117, 120, 125, 554, 569
Blowout preventer . . .117, 120, 554
Blue sky law*
Board of directors . . .30
BOE . . .3
Bonus. (SeeLease: bonus)
BOPD* (barrels of oil per day) . . .157, 226, 438, 454
Borehole (wellbore) . . .121, 123, 125
Bottom-hole contributions . . .42, 50, 54, 68, 312
Bottom-hole letter or contract*
Bottom-hole pressure (BHP) . . .275
BPO (before payout) . . .354
British thermal unit (Btu) . . .3, 186
Broker fees. (SeeLease: broker)
BS&W (or BS). (SeeBasic sediment and water [BS&W])
Btu. (SeeBritish thermal unit [Btu])
Btu factor . . .233, 234, 248
Bubble point . . .174, 175, 561

Bullet perforator*
Butane . . .3, 174, 194, 195, 562, 2-30

C_ _______________________
Cable-tool drilling . . .4, 113
California Independent Producers Association (CIPA) . . .33
Call on production . . .89
Cambrian period . . .55
Canadian gas . . .208
Cap rock . . .57, 58, 60
Capacity (productive) . . .208, 217
Capitalization rules. (SeeInterest capitalization)
Carried interests . . .387, 391, 404
agreement or arrangement . . .390, 394, 417
Carried party . . .390-392, 2-13
Carrying costs . . .36, 50, 51, 68, 79, 93, 95, 104, 242, 300,
312, 314, 1-11
Carrying party . . .390-392, 2-13
Carved-out interest*. (SeeEconomic interest)
Cash balancing . . .252
Cash receipts approach . . .229, 230
Casing . . .47, 86, 114, 121, 126, 127, 132, 133, 137, 138,
141, 166, 176, 260, 272, 336, 450, 451, 1-5, 2-6
conductor . . .121
production . . .126, 449
surface . . .126, 127
Casing point . . .141, 419
Casinghead gas . . .25, 129
Ceiling on capitalized costs. (SeeFull cost accounting method
andSuccessful efforts accounting method)
Cementing . . .166, 452
Cenozoic era . . .55
Centrifuge* . . .177
CEPS (Computerized Equipment Pricing System) . . .163
Chart of accounts . . .28, 43, 49, 74, 90, 132, 156, 157, 166
Check stub (i.e., remittance advice) . . .224
Checkerboard acreage*
Chevron . . .10-12, 402, 444, 556
Christmas tree (wellhead) . . .127, 451
Chromatograph gas . . .195
Clean-out costs. (SeeSwab andWorkover)
Clearing accounts . . .262
Coalbed methane* . . .57, 62, 302
Coding systems . . .168
Collar . . .543
drill . . .113
hedging . . .576, 579, 580
Combination traps . . .58
Commodity charge . . .213
Compensatory royalties . . .89
Completion of a well . . .126, 451
Compressor . . .174, 189, 191
Condensate . . .3, 62, 129, 174-176, 189, 191, 198, 224,
225, 402, 483, 560-562, 1-2, 2-3, 2-18, 2-29 (See
alsoInjection)
Condition value (for material transfers) . . .156, 165
Conditional pooling of assets . . .76
Conservation tax . . .225
Consolidation . . .10, 156, 162, 163, 247, 321, 405-407, 411,
413, 415, 416, 424, 427, 429, 1-7
accounting method . . .410, 411, 413, 414

amortization on a consolidated basis, full cost . . .410

ceiling test on a consolidated basis, full cost . . .413, 417
disclosure . . .410, 411, 423
equity method . . .410
full consolidation . . .411, 415
income taxes . . .428-432
proportionate consolidation . . .406, 407, 411-413, 415,
423, 424
risks and rewards method . . .406-408, 414
significance tests for oil and gas producing activities
. . .1-13 (in Appendix)
SMOG disclosure . . .524
tax returns . . .406
Constant dollars . . .546
Contiguous leases . . .84, 103, 403
Continuing interest*
Contributions
bottom-hole . . .42, 50, 54, 68, 312
dry hole . . .42, 50, 68, 75, 1-5, 2-5
test well . . .68, 71, 75, 3-6
Control accounts . . .49
Control environment . . .30
Conveyances . . .Chapter 21, 349, 417, 418, 1-12, 2-1, 2-11
acquisition of proved property . . .282-286, 356, 358,
361, 376
division orders . . .27, 220-223, 228, 231
effective date of ownership change . . .229
full cost . . .348, 353, 357, 359-363
general principles . . .348, 349
partnership . . .362, 416-419
pooling accounting . . .348, 352, 366
pooling of assets (capital) . . .352, 366
production payments . . .348, 349, 351, 352, 354, 366
(See alsoProduction payment)
sale and abandonment under the full cost method
. . .349, 359, 360
sale of proved property . . .355-357
sale of unproved property . . .349-353
subleases of unproved properties . . .349, 352, 366
COPAS (Council of Petroleum Accountants Societies) . . .32,
153, 225, 557, 4-1
COPAS Accounting Guidelines
No. 8, Joint Task Force Guidelines on Natural Gas
Administrative Issues . . .250
No. 13, Farmouts/Farmins, Net Profits, Carried Interests
. . .229, 395
No. 15, Gas Accounting Manual . . .198, 248
No. 19, Joint Interest Audits . . .154, 166, 167
No. 22, Producer Gas Imbalances . . .250, 251
No. 26, Joint Audit Data Exchange . . .167, 168
COPAS Exhibit . . .32
Accounting Procedure Joint Operations (2005) . . .153,
155
COPAS Model Form Interpretations
No. 5 . . .185, 189, 557
No. 28 . . .168
No. 45 . . .557
No. 46 . . .406, 557
Core (and coring) . . .24, 63, 75, 110, 123, 130, 137, 558,
570, 1-4, 2-31
Core analysis (evaluation) . . .123
Core barrel . . .123

Index

Correlation risk . . .577

COSO Report . . .30
Cost ceiling. (SeeFull cost accounting method
andSuccessful efforts accounting method)
Cost center . . .50, 51, 96, 103, 225, 230, 248, 263, 284,
285, 294, 309, 310, 312-317, 321-323, 325, 329, 331-333,
339, 357, 360, 361, 368, 384, 386, 413, 424, 441, 480,
495, 557, 563, 1-6, 1-7, 1-8, 1-9, 1-11, 1-12
for production expenses . . .48
full cost. (SeeFull cost accounting method)
revenue accounting. (SeeAccounting centers)
successful efforts. (See alsoDD&A)
Cost classification overview . . .450
Council of Petroleum Accountants Societies. (SeeCOPAS)
Credit risk . . .211, 572, 573, 577
Cross-section mapping*
Crude oil . . .2-9, 16, 18, 23, 25, 43, 45, 129, 168, 169, 170,
172-179, 180, 185-187, 192, 198-205, 208-210, 217, 218,
230-232, 261, 269, 271, 274, 298, 404, 435, 442, 454,
462, 483, 506, 561, 571-573, 578, 580, 1-2, 1-3, 1-11, 2-3,
2-18, 2-29, 2-30. (See alsoHistory)
marketer . . .200, 201, 203
price bulletin . . .203
sales and marketing. (SeeSales)
traders . . .201
types . . .3, 200, 201
Current dollars . . .545
Cycling of gas . . .137, 150, 175, 293, 561, 1-5, 1-7, 2-6,
2-10. (See alsoInjection)

D_ _______________________
Daily drilling report*
Damage payments . . .113
Day rate contract. (SeeDrilling contracts)
DCF. (SeeDiscounted cash flow analysis)
DD&A (depletion, depreciation, and amortization), full cost
. . .313-322 (See alsoDD&A, successful efforts)
accounts . . .3-1
consolidated basis . . .321-322, 413
cost center . . .50, 225, 310
costs excluded from amortization base . . .102-103,
314-317
costs to be amortized (amortization base) . . .225,
312-314
dismantlement, restoration, and reclamation . . .339
gas imbalance adjustment . . .254
gross revenue method . . .318-321
offshore properties . . .312-313
overview of . . .310-311
unit-of-production method . . .51, 313, 317-318
DD&A, income tax reporting. (SeeTaxes, income: DD&A)
DD&A, successful efforts . . .36, 282-296
accounts . . .3-1
aggregation (grouping) of costs . . .283-286
consolidated basis . . .413
depreciation of support equipment and facilities . . .
293-294
dismantlement, restoration, and reclamation . . .288
exclusion, major development projects . . .286-288
offshore properties . . .312-313
overview of . . .40, 45-46, 282

Index

unit-of-production method . . .283, 286, 292, 293, 295,

300, 318, 374, 482, 483
Dead man*
Decatherms . . .186
Decline curve . . .274, 276, 292
Deducts. (SeeDifferentials)
Deferred bonus . . .88
Deferred income taxes. (SeeTaxes, income)
DeGolyer & MacNaughton . . .198
Dehydration . . .173, 196, 226, 235
Delay rental (rental) . . .50, 82, 93, 94, 242, 243, 448
Delineation well. (SeeField exploratory well)
Delivery . . .48, 168, 172, 174, 177, 180, 187, 189, 193, 195,
196-198, 201, 202, 207, 209-213, 215, 216, 218, 235, 237,
244, 256, 293, 370, 374, 375, 492, 571, 572, 578, 579,
2-13, 2-21
Delivery pressure*
Depletion . . .43, 46, 49, 52, 104, 106, 258, 275, 281-285,
292, 293, 295, 327, 328, 344, 358, 363, 366, 375, 385,
394, 401, 410, 413, 430, 445-450, 453-455, 457, 460, 465,
466, 488, 489, 492-494, 496, 499, 506, 543, 1-5, 2-6, 2-8,
2-11, 2-16, 2-19, 2-20, 2-21, 2-23, 2-24, 2-25, 2-26
Cost, percentage, statutory, or tax. . . .453, 454
Depletion bonus (tax shield in after-tax discounted cash flow
analysis) . . .543
Depreciation, depletion, and amortization. (SeeDD&A)
Derivatives . . .31, 208, 232, 497, 533, 571-582
collars . . .575-576, 579-580
defined . . .571-578
disclosures . . .581
embedded . . .579
fair value . . .581
FAS 133 . . .577-578
floors . . .576
forwards . . .572
futures . . .571-572, 579-581
options . . .572-573
risks . . .566-571, 576-577
swaps . . .573-575
underlying . . .533, 571, 578
Derivatives Implementation Group (DIG) . . .578-580
Detailed survey*. (SeeGeological and geophysical)
Developed property . . .47, 289, 366 (See alsoProved
property)
Developed proved reserves. (SeeReserves, oil & gas)
Development costs . . .36, 39, 42, 43, 47, 50-52, 78, 129,
136-140, 145, 258, 261, 281, 282, 286-288, 294, 300,
312-318, 325, 327, 328, 360, 362, 363, 382, 385, 388,
391, 392, 394, 399, 400, 401, 415, 419, 420, 424, 428,
431, 433-436, 439, 449, 451, 453, 462, 477, 483, 490,
491, 496, 499, 503, 504, 506-509, 514-516, 518-525, 539,
541, 542, 557, 558, 1-1, 1-5, 1-9, 1-10, 2-5, 2-6, 2-7, 210, 2-13, 2-15, 2-16, 2-20, 2-23, 2-26, 2-28
Development dry holes . . .137, 138, 482
Development well . . .132, 137, 138, 139, 140, 1-4, 2-29
Deviated well*
Devonian period . . .55
Dew point . . .175, 561
Differential(s) (price adjustments) . . .187, 188, 201, 202, 208,
214, 218, 232, 270, 304, 342, 401, 541, 546, 581
Differential pressure . . .187, 188
DIG. (SeeDerivatives Implementation Group [DIG])

Direct charges . . .153, 154, 396

Directional drilling. (SeeDrilling)
Disclosures . . .477-528
accounting policies . . .480, 499
capitalized costs of oil and gas producing activities .
. . 134-135, 316-317, 482, 488, 494-495, 2-19, 2-25,
2-34, 2-35
ceiling test results . . .496-497
costs incurred in oil and gas producing activities . . .
482, 2-20, 2-26
derivatives and hedging . . .581
enhanced recovery . . .562
fair value . . .581-582
FAS 69 . . .344, 410, 437, 441, 478, 479, 481, 488, 490,
502, 515, 524, 1-10
FAS 133 . . .256, 581
financial statements . . .541, 477-528
full cost . . .480, 495-497, 1-9
general partner reserves and SMOG for limited partner
registration . . .1-13 to 1-14
goodwill . . .535
hedging . . .526, 533, 570, 577 (See alsoDerivatives)
IFRS 6 . . .440
impairment under FAS 144 . . .299-300, 307
income taxes . . .472-473
interim financials . . .495
overview of . . .478-482
publicly traded entities . . .479, 481
reserves . . .38, 330, 372-375, 392, 401, 423, 484-488,
500, 511, 524, 2-18, 2-27 (See also FAS 69)
results of operations . . .482, 492-494, 2-20, 2-26
standardized measure . . .330, 482 (SeeStandardized
measure)
supplemental . . .482, 497-498, 502, 505-525, 526,
1-13 to 1-14, 2-21 to 2-23, 2-28 (See alsoStandardized
measure)
usefulness . . .527
Discount price. (SeeDifferential[s])
Discounted cash flow analysis (DCF) . . .305, 324-325, 539543, 545, 547, 550
after-tax . . .540, 546
amortization tax benefit . . .543-545
before-tax . . .540, 546
discount rate . . .540-542
forecast . . .539
forms of . . .547
nominal dollars versus real dollars . . .545
real options . . .548
risk adjustment . . .423, 546
SPEE survey . . .549
Discovery well . . .129, 130, 316, 517
Dismantlement, restoration, and abandonment (DR&A). . .
17, 288, 360, 392, 394, 443, 2-10. (SeePlug and abandon)
Disposal well . . .111
Disproportionate sharing arrangements . . .403
Dissolved gas . . .129, 559
Distribution accounting . . .220
District expense accounts . . .262, 263
Division order . . .221, 222, 223, 231, 248
Divisions of interests (DOI) file . . .49, 220-221
Doghouse*
Domes . . .58, 59, 197, 553

Double* (two joints of pipe)

Dougherty, Dr. E.L. . . .547
DR&A. (SeeDismantlement, restoration, and abandonment
[DR&A])
Drake, Colonel Edwin L. . . .4, 113
Drill stem test . . .123
Drilling . . .Chapter 8, 105-130
below producing horizon . . .139
costs to drill and equip U.S. wells (illustration) . . .130
directional . . .123-125
equipment for drilling . . .115-118, 120-121 127-129
(See alsoRig)
fishing . . .125
horizontal . . .123-125
killing the well . . .125
logging while drilling . . .123
measurement while drilling . . .123-124
permit . . .106
problems encountered in (e.g., blow outs, lost
circulation, lost equipment, stuck drill pipe) . . .125
rig . . .113-121
sidetracking . . .140
spudding . . .121
topdrive . . .113, 116
trip (tripping-out, -in) . . .122
Drilling and supply companies . . .16, 32, 107
Drilling (sharing) arrangements . . .362, 404, 417, 421, 1-8
broadly defined . . .417-418
disproportionate sharing . . .403
drilling rig contractor . . .109-111
tax accounting . . .455-456
Drilling barges. (SeeRig)
Drilling contracts . . .109-110
day rate . . .109-110, 262 (See CDExhibit B)
footage-rate . . .109-110, 262
turnkey . . .109-110
Drilling funds . . .148, 414
Drilling rig. (SeeRig)
Drilling ships. (SeeRig)
Drilling unit . . .151
Dry Btus . . .233
Dry gas . . .3, 189, 192, 195, 208, 217, 233
Dry hole . . .20, 36, 40, 42, 50, 52, 95, 111, 151, 441, 448,
483, 2-7
contributions . . .54, 68, 75, 86, 312, 1-5, 2-5
development . . .52, 129
exploratory . . .129,132, 136, 146
tax accounting . . .452-453, 468
Dual completion . . .27

E________________________
Economic Evaluation and Investment Decisions
Methods . . .550
Economic interest (also mineral interest) . . .45, 48-49, 77,
90, 302, 354, 364, 370, 373-374, 379, 381, 384, 388-390,
398, 417, 446-448, 512, 2-12 to 2-13
after payout . . .229, 276, 392, 2-13 (See also Payout and
Reversionary interest)
back-in. (SeePayout andReversionary interest)
before payout . . .276
carried . . .362, 403, 417, 1-8, 2-13 to 2-14

Index

carved out . . .352, 365, 367, 373, 382

divided interest . . .76, 168, 350, 356
FAS 69 concept of (Oi5.181) . . .2-22
fee interest . . .80, 93, 448
net profits . . .292, 348-352, 365-367, 382, 384, 388,
401, 447 (See also Net profits interest)
nonconsent . . .151, 248, 354, 394-395, 401
nonoperating . . .90, 292, 348-353, 363, 366, 380-390,
455, 483, 2-3, 2-11, 2-14 to 2-15, 2-18
operating interest . . .90, 111, 156, 292, 363, 380, 386,
388-389, 403, 447, 455-456, 2-11 to 2-15
overriding royalty interest . . .111, 352-354, 363-367,
380-385, 447 (See also Overriding royalty interest)
production payments. (SeeProduction payment)
retained . . .76, 348, 365, 377, 2-12
reversionary . . .344, 368, 391
royalty interest . . .49, 82, 85, 152, 200, 223-226, 234,
251, 292, 348, 367, 395, 447 (See also Royalty)
term net profits . . .383-384
undivided interest . . .76, 148, 168, 350, 355, 397, 403,
406, 427, 2-14
working (operating) interest . . .90, 111, 141, 148-152,
157, 162, 166, 200, 209, 221, 227, 248, 250-251, 348356, 363-367, 377, 388-390, 392
Economic limit . . .17, 274, 276, 300, 528
EDQ (equal daily quantities) . . .205
Effective date . . .152, 203, 229, 278, 327, 399, 478, 479, 536
of ownership change . . .229
of reserve estimate . . .278
EFP (exchange of futures for physicals) . . .203
EITF Issue
No. 00-01 . . .413
No. 04-5 . . .416
No. 88-18 . . .371, 372, 384
No. 90-22 . . .250, 252, 254, 499
No. 98-3 . . .530, 531
No. 98-6 . . .416
Electronic bulletin board . . .212-214
Electronic data interchange (EDI) . . .147, 168, 570
Emulsion . . .170, 172
End-users . . .9, 17, 197, 199, 206, 208-210, 217
Energy Information Administration (EIA). (SeeU.S.
government)
Energy Policy Act of 2005 . . .109
Energy Policy and Conservation Act of 1975 (EPCA) . . .36,
1-2, 1-11
Enhanced (improved) recovery . . .24-25, 43, 395, 559-564
Enhanced oil recovery tax credit . . .564
Enterprise risk management (ERM) . . .566-568
Environmental costs. (SeeDismantlement, restoration, and
abandonment [DR&A])
Environmental liabilities . . .346, 3-5
Equal daily quantities (EDQ) . . .205
Equalization. (SeeUnitization)
Equipment (lease and well) . . .132-136, 163-166, 449-453
accounting for . . .132-136, 163-166, 449-453
blow-out preventer . . .120, 132, 554
casing. (SeeCasing)
compressor . . .174, 189, 263
dehydrator . . .173
flowline . . .173
gas processing facilities. (SeeGas processing)

Index

heater treater . . .172

packer . . .123, 126-127
platform . . .115, 119-120, 123-124, 127-128, 145, 287,
315-316, 331, 336, 553-559, 1-7, 2-10
pumping unit . . .128
salt water disposal facility . . .111-112, 170, 259, 262263, 451-452, 1-4, 2-30
separator . . .3, 172, 226
tank . . .118, 173-177, 189, 198, 231
tubing . . .124, 127, 137, 176, 260-261, 450-451, 1-5,
2-6
walking beam unit . . .128
wellhead (Christmas tree) . . .3, 117, 120-121, 126-127,
137, 187, 236, 260, 336, 449, 451, 554, 1-5, 2-6
Equipment and supplies inventory. (SeeEquipment [lease and
well])
CEPS (Computerized Equipment Pricing System) . . .
163
Equity method . . .321, 406, 410, 411, 413, 427, 469, 481,
484, 485, 488, 490, 493, 503, 504, 1-7, 2-19, 2-20, 2-21,
2-22, 2-24, 2-25, 2-26, 2-27, 2-28
Equivalent barrel (BOE) or Mcf (Mcfe) . . .43, 296, 300, 317,
527
Ethane . . .2, 3, 174, 193-195, 216, 217, 236-240
Evergreen sales contracts . . .201
Exchange (of oil or gas) . . .168, 201, 202, 218, 232, 480
Exchange contracts . . .201, 202, 232
Exchange of futures for physicals (EFP) . . .203
Exchange offers . . .480
Executive rights . . .89
Exempt owner . . .226, 227
Exploitation engineering*
Exploration advances . . .372
Exploration cost(s) . . .Chapter 6, 67-78
3D seismic for proved property development . . .78
accounting for . . .40-42, 60-78 (See also Full cost and
Successful efforts)
acreage selection options . . .75
AFE for . . .47-48, 70-74, 109, 140-143, 300, 313
exploration performed in return for acreage . . .76
exploration permits . . .74-75
purchased G&G data . . .77
support facilities and overhead costs . . .78
tax treatment . . .448-453
test well contributions . . .75
Exploration department . . .22, 24, 80
Exploration rights . . .74, 75
Exploratory well . . .47, 68, 74, 132-146, 266, 483, 494-495,
1-4, 2-7 to 2-10
ExxonMobil . . .11, 157
financial disclosures . . .444, 482, 486-495

F_________________________
F.E.R.C. Gas Market Report . . .211
Fair market value. (SeeFair value)
Fair value . . .299, 302, 306, 331, 342, 581
conveyance accounting . . .356, 357, 360, 363-367
valuation date . . .543
Farmout (farmin) . . .27, 387, 388, 389
full cost . . .403, 404
FAS. (SeeStatement of Financial Accounting Standards)

FASB (Financial Accounting Standards Board) . . .37, 38, 96,

134, 232, 252, 279, 283, 298, 302, 307, 310, 322, 324,
332, 344, 345, 388, 406, 407, 423, 464, 470, 474, 478,
479, 494, 510, 526, 530, 535, 536, 577, 578, 579, 580,
581, 1-13, 2-1, 2-2, 2-3, 2-16, 2-31, 2-32, 2-36, 4-1
FASB Interpretation (or FIN) . . .38, 322, 345, 406, 2-2
FIN 46R . . .406-410, 414-416
FIN 48 . . .474
No. 33 . . .146, 322
No. 36 . . .38, 136
Faults . . .58, 59, 550
Federal Energy Regulatory Commission (FERC). (SeeU.S.
government)
Federal government. (SeeU.S. government)
Federal Onshore Oil and Gas Leasing Reform Act . . .107
Federal Power Commission (FPC). (SeeU.S. government)
Fee interest . . .80, 93, 448
FERC Orders
No. 436 . . .207
No. 500 . . .207
No. 636 . . .197, 208, 212, 256
Field . . .5, 1-4
Field clerical services . . .26
Field exploratory well . . .129
Field facility*. (SeeEquipment [lease and well])
Field processing . . .173, 1-2, 2-6
Fireflooding . . .562
Fire wall*
Firm transportation agreement . . .212
Fish . . .108, 556
Flare . . .123, 187
Flash gas . . .189, 191
Floors . . .2, 575
Flow chart . . .189
circular paper chart of gas pressures . . .188
schematic of gas flows . . .189, 190
Flow lines . . .42, 47, 137, 172, 173, 261, 336, 450, 451, 452,
553, 1-5, 2-6
Flow tank. (SeeEquipment [lease and well])
Flow treater*. (SeeEquipment [lease and well])
Fluid injection. (SeeInjection)
Flush production*
Footage-rate drilling contract. (SeeDrilling contracts)
Force majeure . . .88, 153
Formation . . .2, 10, 59, 61, 62, 64, 65, 106, 108, 113, 117,
118, 121, 123, 125, 126, 127, 316, 2-32
continuous . . .61, 62
Formation pressure . . .117, 123, 128
Formation testing*
Formula pricing . . .18
Forwards . . .571, 575
over-the-counter (OTC) . . .572, 573
Four dimensional (4-D) seismic. (See Geological and
geophysical [G&G])
Fractionation . . .194, 195, 198, 217, 218, 235
Fracturing (fracing) . . .56, 62, 126, 261, 452
Free well . . .389-390, 403, 2-13, 2-14
agreement . . .389-390
Fuel charges . . .213
Full cost accounting method . . .50, 51, 102, 136, 138, 309,
310, 334, 384, 403, 496, 499, 2-23

accounting policy disclosure illustrated . . .134, 135,

307, 316, 324, 330, 333-334, 497
amortization (or DD&A). (SeeDD&A, full cost)
ceiling test . . .278, 280, 296, 299, 307-308, 322-324,
327-330, Chapter 19, 413, 417, 480, 496-497, 506,
526, 528
conveyances . . .312, 330, 348-353, 357-363, 365-366
(SeeConveyances)
cost center . . .310-317, 312-323, 325, 329, 331-333
costs to be capitalized . . .310, 312
deferral of dry hole costs in new cost centers . . .314,
322
disclosures . . .316, 330, 344 (See Disclosures)
history of . . .310
interest capitalization . . .322
overview flow chart of . . .311, Figure 19-1
privately held company . . .307, 348
production costs . . .311, 319, 324, 325
promotional activities and service contracts . . .312, 330
Reg. S-X Rule 4-10(c) . . .307, 310, 312-319, 321-323,
325, 326, 330-333
Futures contract. (SeeDerivatives)

G_ _______________________
G&G. (SeeGeological and geophysical)
Gas (natural)
accounting for production and sales . . . 233-245, 250,
Chapter 14 (See also Gas imbalances)
artificial gas lift . . .127-128, 176
associated . . .129
balancing agreement . . .249, 250, 570
bubble . . .129, 174, 175
casinghead . . .25, 129
chromatograph . . .189, 195
coalbed methane . . .57, 62, 272, 302
compression . . .174, 193, 194, 197, 214
cycling operations . . .175, Figure 11-3
defined . . .2
dissolved . . .129, 559
dry . . .3, 189, 192, 195, 208, 217, 233
enriched . . .562
imbalances. (SeeGas imbalances)
injection . . .174, 175, 559, 561, 586, 626
lease use . . . 80, 83-89, 93, 145, 149, 151, 191, 242,
552 (See also Gas, injection)
lift . . .128, 176, 226, 260, 559
measuring . . .176, 177, 186, 187, 189
metering. (SeeMeter)
non-associated . . .129
processing . . . (See Gas processing)
residue. (SeeGas [natural]: dry)
sour . . .3
storage . . .16, 45, 197, 208
sweetening . . .173
take-or-pay contracts . . .212
tight sands . . .10, 62
wet . . .3, 192-195, 217, 233, 236, 237, 242, 499
Gas allocation statement . . .235, 248
Gas cap . . .129, 175, 402, 559
illustration . . .129, Fig. 8-11
gas cap drive . . .559

Index

Gas condensate reservoir . . .175

Gas contracts . . .88, 174, 196, 199, 248
gathering agreements . . .212
management service contracts . . .210, 216
purchase and sales agreements . . .210-214
transportation agreements . . .210, 212, 213
Gas cycling . . .137, 150, 175, 293, 561, 1-5, 1-7, 2-6, 2-10
(See alsoInjection)
Gas imbalances . . .Chapter 14, 249-256
accounting for . . .252, 254
agreements . . .250, 251
COPAS AG 8, Joint Task Force Guidelines on Natural
Gas Administration Issues . . .250
COPAS AG 22, Producer Gas Imbalances . . .250, 251
disclosure . . .252, 256
entitlement method . . .252-256
nomination process . . .254-256
penalties . . .256
reserves . . .252-254
sales method . . .252
settlement process . . .256
valuation . . .250-252
Gas lift(s) . . .128, 176, 260, 559
Gas payment*. (SeeProduction payment)
Gas plant. (SeeGas processing)
Gas plant products*. (SeeNatural gas liquids [NGL])
Gas processing. (SeeNatural gas liquids [NGL] processing)
accounting for . . .187-189, 192-198
contractual arrangements . . .192-193
fractionation plant . . .194, 198
gas processing plant . . .3, 187, 189, 192, 194
types of . . .194
plant settlement . . .197, 235, 237-240
gas settlement statement . . .197
plant thermal reduction . . .193, 195
plant volume reduction . . .193, 195
royalty on . . .196
types of processing . . .193, 194
Gas well. (SeeWell)
Gas-oil ratio*
Gathering . . .17, 212, 263, 496
gathering system . . .172, 174, 187, 194, 211
Gauging
gauge sheet . . .177
gauge tape . . .177
GBA (Gas balancing agreement). (SeeGas imbalances)
General partnerships. (SeePartnerships)
Geologic time periods . . .55, Fig. 5-1
Geological and geophysical (G&G)
3-D seismic . . .10, 64, 65, 78, 553
4-D seismic . . .78
data library . . .77-78
surveys . . .62-65, 68, 69, 78
aerial photography . . .62
gravimetric 553
magnetic . . .63, 111, 553
satellite . . .62, 119
seismic . . .64, 65, 78, 552, 553
tax accounting . . .68-71, 75, 78
Geological survey. (SeeGeological and geophysical)
Geology . . .54, 62, 150, 271, 1-3, 2-30
Geophones . . .64

Index

Geophysics . . .54, 62
Gigajoules . . .4
Gpm (gallons per Mcf) . . .236
Gravimetric surveys . . .553
Gravity. (SeeAPI: API gravity)
Gravity adjustments . . .204, 205
Gravity meter*
Gross wells*
GTC (general terms and conditions) . . .201, 213
Guaranteed recoupable exploration advances . . .372
Guaranteed royalties. (SeeRoyalty)

H_ _______________________
Heater treater . . .172
Heavy oil . . .454, 562
Hedging . . .44, 203, 324, 427, 526, 533, 570, 572, 573, 577,
578-581, 3-4, 3-5, 3-7 (See alsoDerivatives)
Henry Hub . . .213, 549, 571
History
petroleum accounting . . .36-38
top 20 U.S. oil and gas companies (illustration) . . .11
U.S. petroleum industry . . .Chapter 1, 4-12
U.S. spot crude prices (illustration) . . .9
Hoisting equipment . . .114, 115
Hole
Horizon . . .110, 137, 139, 261, 1-4, 2-29
Horizontal assignment*
Horizontal drilling . . .10, 56, 62, 123, 124, 125
Hubs . . .213
Huff-and-puff steam flooding . . .562
Hydrocarbons . . .2, 3, 16, 55, 56, 58, 59, 61, 66, 69, 81,
106, 117, 123, 125, 126, 128-130, 132, 139, 170, 216,
233, 270, 273, 303, 304, 562, 1-2, 1-3
migration . . .57
processing . . .3, 42, 174, 187, 189, 192-194, 197, 198
(See alsoGas processing)
traps . . .16, 53, 57, 58-62

I_________________________
Ibbotson Associates . . .541, 550
IDC (intangible drilling costs) . . .52, 132, 285, 388, 445,
449, 450. (SeeIDC)
tax accounting . . .404
IFRS 6, Exploration for and Evaluation of Mineral Resources
. . .334, 440
Igneous rock . . .55
Imbalance, gas . . .255, 256 (SeeGas imbalances)
Impairment of long-lived assets . . .38, 268, 285, 305
Impairment of proved property
applicability to full cost companies . . .298, 300-302,
305, 307, 308
successful efforts companies . . .298, 300, 302, 304,
307, 308
asset carrying amount . . .301, 302
asset grouping . . .301, 302, 308
assets to be disposed of . . .305-307
expected future cash flows . . .298, 301-308
fair value . . .298-302, 305, 306, 308
field basis . . .298, 302
impairment indicators . . .300, 301

inherent impairment . . .300

Impairment of unproved properties
full cost accounting . . .92, 94, 95-97, 102-104
illustration of accounts . . .92-95, 97, 103
illustration of policy . . .96
individually significant properties . . .95-97, 102, 103
successful efforts accounting . . .92, 94, 95, 97, 102, 104
group basis . . .95, 97-99
illustration of accounts . . .93, 97, 99, 102
illustration of policy . . .96
individually significant properties . . .95-97, 102, 103
post-balance-sheet events . . .103
transfers to proved property . . .98, 99, 103
In situ combustion . . .560, 562, 586
In-kind (take in-kind) . . .152, 188, 193, 196, 197, 200, 209,
218, 221, 238, 248, 251, 404, 441, 457
Income funds . . .149, 414, 419
Income taxes. (SeeTaxes, income)
Incurred cost definition . . .52
Independent Petroleum Association of America (IPAA) . . .32
Independent Petroleum Association of Mountain States
(IPAMS) . . .33
Independent producer . . .217, 454
Industry associations and organizations . . .12, 32, 34, 188, 267
Information systems . . .23, 28, 231, 427, 440, 569
Initial production*
Injection . . .174, 175, 247, 560, 561, 562
carbon dioxide (CO2) . . .3, 108, 192, 560, 562
chemicals . . .560
enriched gas . . .562
natural gas . . .560, 562
steam . . .25, 461, 560, 562
water . . .560
wells . . .112, 560, 562
Installment bonus. (SeeLease: bonus)
Intangible drilling costs. (SeeIDC)
Integrated oil company . . .29
Interest capitalization . . .143-146, 322, 344
Interim statements . . .230
Intermediate (a grade of crude oil) . . .3, 9, 142, 174, 180,
198, 203, 227, 572
Intermediate casing string*. (SeeCasing)
Internal ControlIntegrated Framework . . .30, 31
Internal controls . . .22, 30, 31, 176, 224, 566
Internal costs of lease acquisitions . . .92
full cost . . .50, 312, 1-6
Internal Revenue Code (IRC) . . .4, 52, 404, 465, 564
Internal Revenue Service (IRS) . . .69, 75, 104, 152, 295, 359,
442, 447, 449, 453, 454, 458
International operations . . . Chapter 25, 425-444
concessions . . .431
cost recovery . . .429, 433-436, 438-440, 443, 444
disclosure of reserves and other supplemental
dismantlement, restoration and abandonment
obligations . . .443
Foreign Corrupt Practices Act of 1977 . . .442
forms of operation . . .427
full cost . . .441
host country auditors . . .442
information . . .436, 437, 441
internal controls . . .442
lifting imbalances . . .440, 441

production sharing contracts . . .425, 428, 432, 436,

437, 444
reward sharing methods . . .429
risks . . .425, 426, 427, 429, 431, 433, 434, 435, 437, 443
service contracts . . .425, 428, 432, 437
transfer pricing . . .442
U.K. petroleum revenue taxes (PRT) . . .430, 446
Interruptible transportation contract . . .213
interruptible gas* . . .213
Inventory and storage . . .Chapter 11
equipment and supplies, gas, . . .170, 172, 174, 175,
182
NGL . . .174, 187, 189, 192, 193, 194, 195, 197, 198
oil . . .169, 170, 172-177, 179, 180, 184-187, 189, 190195, 197, 198
IPAA. (SeeIndependent Petroleum Association of America)
Isobutane . . .216
Isopach maps*

J________________________
Jack-up rigs. (SeeRig: offshore)
JADE (Joint Audit Data Exchange) . . .167, 168
JIBE (Joint Interest Billing Exchange) . . .168
Joint (of pipe) . . .6, 125 (See alsoCasing andRig)
Joint interest or joint venture . . .27, 70, Chapter 10, 192,
209, 395, 401, 404, 407, 427-432, 439, 450, 456, 457,
569, 570, 1-8, 2-13
AAPL model form . . .153 (See CDExhibit E)
accounting procedures exhibit . . .151, 153
area of mutual interest (AMI) . . .150
electronic data interchange . . .168
field-wide unitization. (SeeUnitization)
formation . . .149151
joint interest audits . . .154, 166
joint operating agreement . . .149151, 154, 157,
162, 164
joint venture agreement . . .148150
jointly owned corporations . . .149
material transfers . . .163, 166
nonoperator . . .151, 152, 154, 156, 157, 162167
operator . . .148, 150157, 162168
partnerships . . .148, 149
undivided interests . . .148, 150, 168
Joint production of oil and gas. (SeeDD&A)

K_ _______________________
Keep-whole agreement . . .193
Kelly . . .113, 116, 118, 121
Kill a well . . .125
Kiloliter . . .4
Kuparuk field . . .7

L_________________________
LACT unit (lease automatic custody transfer unit) . . .174,
176, 180, 185, 186, 202
Land department . . .23-28
accounting . . .2328
organization . . .24
Landman . . .24, 32

Index

LDC. (SeeLocal distribution companies)

Lease . . .Chapter 7
accounting for unproved leases . . .51, 91, 94, 95, 102
acquisition. (SeeAcquisition costs)
agreement . . .8081
bonus . . .81, 82, 9192
broker . . .80, 91, 104
conveyances. (SeeConveyances)
deferred bonus . . .88
options to acquire . . .92
primary term . . .81, 82
top leases and lease renewals . . .104
use of petroleum for operations (lease use) . . .173 (See
alsoGas [natural]: injection)
Lease and well equipment. (SeeEquipment [lease and well])
Lease automatic custody transfer unit. (SeeLACT unit)
Lease condensate. (SeeCondensate)
Lease operating expenses. (SeeProduction costs)
Lease operating statement . . .228, 263, 264
Lease use gas. (SeeGas [natural])
Leasehold interest. (SeeEconomic interest)
Legal costs . . .54, 91, 1-4, 1-5, 2-4, 2-5
Lessee . . .75, 80-94, 104, 222, 348, 377, 385, 388
Lessor . . .49, 81-90, 243, 244, 348, 385, 390, 395, 448
Letter of credit . . .106
Lifting costs . . .42, 49, 82, 245, 258, 296, 324, 392, 485,
492, 1-5, 2-6, 2-19 (See alsoProduction costs)
Light crude oil. (SeeCrude oil)
Limited partnerships. (SeePartnerships: limited partnerships)
Liquidity risk . . .577
Liquified petroleum gas (LPG) . . .3, 217
Lithospheric plates . . .56
Local distribution companies (LDC) . . .197, 206, 207, 208,
209, 210
Location (of well) . . .111113
Logging (of well) . . .63, 110, 123, 124, 452

M________________________
Magnetic meter* (magnetometer)
Magnetic surveys . . .63
Make up gas . . .212
Making a trip . . .122
Management and service fees (charged to managed
partnerships) . . .419-422
Management services contracts (in gas marketing) . . .210, 216
Managing partner . . .406, 411, 414
Marginal well*. (SeeStripper well)
Mark-to-market accounting . . .532
Market centers . . .195, 213, 217, 218
Marketers . . .9, 199, 201, 202, 209, 210
Marketing. (SeeSales)
Marketing companies . . .208, 209, 210
Marketing department . . .228, 231
Mass spectrometer*
Mast (derrick), of drilling rig . . .113-115
Master limited partnership (MLP) . . .422-424
Material transfers . . .166
Maximum lawful prices (MLP) . . .207
Mcf (thousand cubic feet) . . .3, 186, 189 (See alsoVolumes)
MERC. (SeeNew York Mercantile Exchange)
Mergers . . .10, 545, 550, 569

Index

Mesozoic era . . .55

Metamorphic rocks . . .55
Meter . . .4, 174, 180, 186, 187, 188, 189, 191, 192, 211, 228
Meter ticket . . .180, 186
Methane . . .2, 3, 10, 57, 62, 108, 192, 194, 195, 208, 233,
272, 302
Mid-Continent Oil & Gas Association . . .33
Mineral interest or right. (SeeEconomic interest)
Minerals Management Service (MMS) . . .33, 74, 107, 224,
242, 336, 552
MMS leasing form . . .552 (See CDExhibit B)
Minimum royalty. (SeeRoyalty: guaranteed)
Miscible flood or injection . . .562
MMbtu . . .3 (See also Volumes)
MMcf (million cubic feet) . . .3 (See alsoVolumes)
MMS. (SeeMinerals Management Service [MMS])
Mobil . . .10, 157, 402, 495
Mont Belvieu, Texas . . .218
Mouse hole*
Mud . . .110, 111, 113, 114, 117, 118, 121, 123, 124, 125,
126, 142, 166, 452, 3-3

N_ _______________________
Naked option . . .573
National Petroleum Council (NPC) . . .33
Natural gas. (SeeGas [natural])
Natural Gas Act of 1938 . . .206
Natural Gas Intelligence Gas Price Index . . .211
Natural gas liquids (NGL) . . .3, 169, 174, 192, 269, 271, 483,
484, 486, 499, 1-2, 1-3, 2-3, 2-18, 2-19, 2-23, 2-29, 2-30
accounting for NGL sales . . .Chapter 13,219-248
inventory . . .237
sales. (SeeSales: of NGL)
storage . . .198
Natural Gas Week . . .211
Natural gasolines . . .2, 3, 174, 194, 195, 217 (See
alsoCondensate andNatural gas liquids [NGL])
Natural Gas Policy Act of 1978 (NGPA) . . .8, 207
Net-back method . . .238, 242
Net-back pricing . . .218
Net profits interest . . .292, 348, 349, 352, 365, 367, 382,
384, 388, 401, 447
general accounting . . .382
tax treatment . . .382, 383, 385
term net profits interests . . .383, 384
Net revenue(s), future . . .51, 319, 323, 324, 326, 327, 328,
343, 423, 479, 506, 518, 524, 1-7, 1-13
Net revenue interest (NRI) . . .49, 220, 223, 228, 230, 238,
251, 255, 277, 352, 354, 395
Net wells*
New field wildcat*
New York Mercantile Exchange (NYMEX or MERC) . . .9, 198,
203, 205, 209, 213, 526, 541, 571, 572, 581
Nominal dollars . . .304, 305, 545, 547
Nomination (for gas sales) . . .209, 214, 215, 254, 255, 256
Non-value disclosures . . .Chapter 28, 479-500 (See
alsoDisclosures)
Nonassociated gas*
Nonconsent . . .151, 248, 354, 394, 395, 401, 404
Noncontinuing interest*. (SeeProduction payment
andOverriding royalties)

10

Nonintegrated companies. (SeeIndependent producer)

Nonoperating interest . . .90, 292, 348, 349, 352, 353, 363,
366, 367, 380, 382, 385, 386, 388, 390, 455, 2-11, 2-13,
2-15 (See alsoNet profits interest, Production payment,
andRoyalty)
Nonoperator . . .151, 154, 156, 157, 162, 164, 165, 166,
167, 251
Nonvalue disclosures . . .Chapter 28, 477-500 (See
alsoDisclosures)
Normal butane . . .2, 216
North Slope of Alaska . . .7, 174, 200, 402
Notional amount . . .256, 573, 578
NYMEX. (SeeNew York Mercantile Exchange (NYMEX))

O_ _______________________
Occupational Safety and Health Administration (OSHA).
(SeeU.S. government)
Offset clause . . .82
Offset well . . .89, 129
Offshore operations . . .115, 119, 552, 556, 557, 558
accounting issues . . .556559
DD&A . . .558
development costs . . .557, 558
drilling . . .553, 554
evaluation wells . . .555, 556, 558
exploration . . .552, 553, 557, 558
exploratory drilling . . .553, 554, 558
G&G costs . . .557
joint operations . . .557
leasing . . .552
MMS . . .552
production and transportation . . .556
production costs . . .557, 559
removal and restoration . . .556, 559
shared facilities . . .559
support facilities . . .557559
unproved properties . . .557
Oil. (SeeCrude oil)
Oil & Gas Journal . . .10, 11, 15, 83, 115, 304
Oil and gas lease. (SeeLease)
Oil and gas producing activities . . .39, 258, 261, 262, 333,
368, 404, 410, 419, 437, 477, 479, 480, 481, 482, 488,
490, 492, 493, 499, 1-1, 1-2, 1-5, 1-9, 1-10, 1-13, 2-2,
2-3, 2-4, 2-7, 2-10, 2-15 to 2-24
Oil pool*
Oil Price Information Service (OPIS) . . .218
Oil pricing. (SeePrices [oil, gas, and NGL])
Oil sand . . .10, 542
Oil seep* . . .2, 4
Oil storage. (SeeInventory and storage)
Oil well. (SeeWell)
Oil-well gas. (SeeCasinghead gas)
OPEC (Organization of Petroleum Exporting Countries) . . .6,
7, 14, 15, 70
Operating agreement. (SeeJoint interest or joint venture:
joint operating agreement)
Operating interest . . .90, 111, 156, 292, 380, 386, 388, 389,
403, 447, 455, 456, 2-11, 2-13, 2-15 (See alsoEconomic
interest)
Operational balancing agreements . . .216

11

Operator . . .75, 76, 82, 83, 86, 88, 89, 92, 93, 95, 104, 106,
109, 110, 111, 115, 124-126, 139, 142, 143, 148, 150-157,
162, 168, 173, 179, 180, 192, 195, 196, 200, 201, 209, 214,
218, 220-222, 224, 227, 237, 248, 250, 251, 254, 255, 353,
372-374, 377, 383-386, 389, 402, 406, 414, 417, 421, 427,
429, 432, 440, 441, 452, 454, 456, 555-557, 559, 2-12, 3-7
Option contracts. (SeeDerivatives)
Option payment . . .88
Organization . . .22, 25, 29, 30, 32, 70, 166, 220, 225, 362,
406, 422, 456-458, 1-8, 4-1
E&P company . . .2133. Chapter3
industry associations . . .32, 33, 267
Orifice meter . . .187, 188
ORRI. (SeeOverriding royalty interest)
Outer continental shelf (OCS) . . .107, 109, 336, 552
Over-the-counter commodity contracts (OTC) . . .572, 573
Overhead . . .50, 69, 70, 78, 91, 92, 113, 153, 154, 155, 162,
261, 304, 312, 331, 396, 443, 452, 492, 499, 1-6, 2-20,
2-21, 2-26
joint venture . . .153-155, 162
Overriding royalty interest (ORRI) . . .111, 352, 353, 354,
366, 367, 380, 381, 384, 385, 447
conveyance . . .352354, 363366
net profits interest. (SeeNonoperating interest)
retention . . .352, 354, 363366
tax treatment of sales and leases . . .366367
Ownership change . . .229 (See alsoConveyances andLease)

P_ _______________________
Packer. (SeeEquipment [lease and well])
Paleozoic era . . .55
Paper barrels . . .203
Parking . . .197, 214
Participation factors. (SeeUnitization)
Partnerships . . .8, 12, 148, 149, 312, 362, 404, Chapter 24,
406-424, 427, 456, 457, 481, 1-8, 1-13, 1-14
consolidation . . .406, 407, 411-413, 415, 416 (See
alsoConsolidation)
conveyance of mineral interests . . .37, 417-419
exchange offers . . .422-424
FIN 46R, Consolidation of Variable Interest Entities . . .
406-410, 414-416
G&A reimbursement . . .418, 422
general partnerships . . .406
limited partnerships
consolidation . . .415-416
conveyances . . .416-418
drilling funds . . .414
income funds . . .414, 419
management and service fees . . .419-422
master limited partnerships . . .422-424
organization costs . . .415
sharing ratios (voting interest) . . .406-408, 410, 415
syndication fees . . .414
managing partner . . .406, 411, 414, 421
risk and rewards method . . .406-408, 414
Pay . . .273
Payout . . .27, 229, 276, 344, 354, 390, 391, 392, 393, 395,
404, 415, 443, 2-13 (See alsoNonconsent andReversionary
interest)
rule of thumb . . .289

Index

effective date . . .229

Pentanes plus. (SeeNatural gasolines)
Percentage depletion. (SeeTaxes, income)
Permeability. (SeeReservoir)
Permit to drill . . .107
Petrochemical industry . . .3, 6, 217
Petroleum Accounting and Financial Management Journal
. . .4-1
Petroleum economics . . .Chapter 2, 14-20
Petroleum Resources Management System . . .32, 266
Phillips decision . . .206
Pig*
Pipelines . . .2, 5, 6, 9, 17, 23, 80, 84, 86, 109, 168, 170, 172173, 187, 194, 197, 204, 206-208, 212-214, 217, 255, 272,
443, 449, 452, 556
transportation agreements . . .210, 212, 213
Pitch . . .2
Plants. (SeeGas processing)
Plate tectonics . . .56, 58
Plug-back . . .139, 140
Plug and abandon (P&A) . . .17, 125, 166, 540
accounting for costs . . .17, 125, 126
Pool*. (SeeReservoir)
Pool (full cost or amortization) . . .102, 132, 136, 146, 286,
298, 307, 308, 312, 313, 315, 322, 323, 324, 331, 332,
333, 334, 343, 350, 352, 353, 360, 362, 363, 366, 370,
383, 417, 418, 419, 420, 534
Pooling . . .24, 76, 80, 83, 149, 150, 196, 216, 348, 352, 366,
388-390, 396, 415, 418, 468, 2-12, 2-13
assets. (SeeConveyances)
gas sales . . .216
residue . . .3, 173, 187, 192-197
Porosity. (SeeReservoir)
Post-balance-sheet events . . .131, 135
Posted field price*. (SeePosted price bulletin)
Posted price bulletin . . .179, 203
Pounds per square inch absolute (psia) . . .3, 186, 233
Predetermined allocation (PDA) . . .214, 215, 251, 255
Premiums, price. (SeeDifferential[s])
Prepaid commodity sale (prepaid) . . .374
Prepaid expenses . . .45, 94
Prepaid price swap . . .381
Pressure maintenance . . .150, 175, 245, 246, 498, 560
gas reservoirs . . .174, 175, 245, 246
oil reservoirs . . .174, 175
Pressure regulator*
Price bulletin. (SeePosted price bulletin)
Prices (oil, gas, and NGL) . . .Chapter 11, 200-218
determination of . . .7-10, 18, 179 (SeeSales)
fixed . . .201, 211, 572-576, 579 (See alsoDifferential[s])
forecasted . . .304
futures . . .9, 203, 205, 208, 209, 526, 571-573, 575 (See
alsoDerivatives)
historical . . .7-10, 218, 319
index (or reference) . . .18, 201, 202, 205, 211
posted . . .202-205
spot . . .269, 270, 526, 549, 572, 574-577
Primary lease terms . . .97, 314, 1-6, 2-7
Primary recovery . . .198, 271, 288, 559, 560, 563, 1-3, 2-30
Privately held company GAAP (of shipped gas) . . .307, 308
Pro-rata allocation . . .214, 255

Index

Processing plants. (SeeGas processing)

Production costs . . .39, 42, 43, Chapter 15, 258-264, 493,
494, 1-1, 1-5, 1-8, 2-6, 2-26
accumulation . . .259, 260
ad valorem production and severance taxes . . .261
cost center . . .259, 260
deferral . . .258
defined . . .258
direct . . .260, 261
indirect production costs . . .261-263
lease operating expenses . . .258-262
lease operating statements . . .263, 264
offshore . . .559
pumping . . .260, 264
repairs and maintenance . . .258, 259, 261
salt water disposal . . .259, 262, 263, 451, 452
workover . . .260, 261
Production department . . .23, 24, 25, 180, 185, 188, 228,
229, 235
Production engineers . . .24
Production funds . . .414
Production loan . . .372, 373 (See alsoProduction payment)
Production payment . . .48, 248, 293, 348, 349, 352, 354,
366, 371-381, 384-386, 447, 533, 2-12, 2-13, 2-15, 2-16
EITF Issue No. 88-18 . . .371, 372, 384
production loan . . .372, 373
retained . . .371, 374, 378-382, 385, 386
tax treatment . . .385
volume production payment (VPP) . . .48, 301, 302,
354, 364, 370, 374-376, 379-386
Production string. (SeeCasing)
Production taxes. (SeeTaxes)
Productivity test*
Project area*
Promoted . . .395
Promoting . . .312, 395
Promotional activities . . .312, 330
Propane . . .2, 3, 17, 174, 194, 195, 217, 562, 2-30
Property. (SeeLease andEconomic interest)
income tax definition . . .446-448
Property accounting. (SeeAbandon, Acquisition costs, and
Conveyances)
Property acquisition costs. (SeeAcquisition costs)
Property taxes. (SeeAd valorem taxes)
Property, undeveloped . . .242, 356, 456
Proportionate consolidation. (SeeConsolidation)
Proration . . .87, 274
Proved area . . .78, 137, 138, 139, 273, 401, 557, 558, 1-1,
1-4, 2-29, 2-31
Proved mineral interests. (SeeProved property)
Proved (or proven) property . . .25, 43, 46, 52, 78, 103, 242,
278, 281, 282, 285, 286, 302, 326-329, 349, 355-358,
362-365, 374, 378-384, 472, 511, 517, 527, 557, 2-5, 211, 2-14, 2-15, 3-2
acquisition of . . .46-48 (SeeAcquisition costs)
amortization of . . .36, 40, 41, 43-47, 50-52 (SeeDD&A)
conveyances of . . .37 (SeeConveyances)
impairment of . . .38, 40-42, 45-47, 51, 52
(SeeImpairment of proved property)
valuation of. (SeeValuation)
Proved reserves. (SeeReserves, oil & gas)
Prudhoe Bay . . .7, 58, 61, 401, 402

12

Public Company Accounting Oversight Board (PCAOB) . . .

279, 280
Public Company Accounting Reform and Investor Protection
Act of 2002 . . .31
Publicly-traded . . .415, 422, 423, 479, 481, 483, 527
FAS 69 . . .38, 270, 308, 319, 344, 368, 410, 436, 437,
441, 477-483, 485, 488, 490, 492, 493, 497, 499, 502504, 506-508, 510-515, 519, 524, 526-528
SEC registrants . . .37
Pumper . . .177, 180

Q_ _______________________
Quarter section*

R_ _______________________
Rabbit*
Rat hole*
Rate schedule (in pipeline tariff filings) . . .213
Real dollars . . .305
Reclamation. (SeePlug and abandon)
Recompletion . . .261, 271, 288, 1-3, 2-30. (See
alsoReserves, oil & gas: behind-pipe)
Recovery factor . . .236, 560, 562
gas processing . . .57, 236, 239, 273, 560, 562
reserve determination . . .269, 271, 273
Reference prices . . .18, 202, 211, 454
Refining . . .3, 5, 14, 15, 18, 22, 89, 180, 200, 203, 217, 231,
258, 293, 571, 576, 1-2, 1-5, 2-3, 2-7
Reinjected gas . . .174, 219, 245, 246, 562
Released firm capacity . . .212, 214
Remittance advice . . .49, 224, 227, 229, 230
Removal and restoration. (SeePlug and abandon)
Rental. (SeeDelay rental)
Reservation charge . . .212, 213
Reserve recognition accounting (RRA) . . .37, 38, 478, 479,
502, 506, 1-13
Reserves, oil & gas
behind-pipe . . .272
disclosures . . .269, 278, 373, 392, 437, 441, 527, 562
(SeeDisclosures)
economic limit . . .274, 276, 300
estimating . . .272, 273
general definitions and categories . . .14, 15, Chapter
16, 265-280
performance curves . . .274
possible . . .268, 269, 273, 303, 304, 308, 423
probable . . .268, 269, 303, 304, 316, 329, 423
proved . . .19, 25, 36-43, 45-48, 51, 52, 68, 76, 77, 97,
103, 132-140, 146, 242, 243, 252, 261, 265-273, 276,
278-280, 282, 283, 285-288, 291, 292, 294
proved developed reserves . . .36, 40, 43, 271, 272,
282, 285-288, 291, 294, 339, 362, 363, 393, 481, 483,
485-487, 563, 585, 606, 614, 620
proved undeveloped . . .51, 268, 269, 271, 272, 276,
282, 288, 343, 362,363, 393, 563, 585, 626
reporting . . .266-268, 278, 279
shut-in . . .272
SPE standards . . .266-269, 271, 279, 280
Reservoir . . .17, 19, 20, 24, 25, 43, 56-58, 61, 62, 112, 139,
148, 187, 1-3, 1-4, 2-8, 2-10, 2-29, 2-30

13

permeability . . .56, 57, 60-62

porosity . . .56, 60, 61, 63, 65, 105
rocks . . .56, 57, 59-63, 65
Reservoir engineers . . .24, 266
Reservoir simulators . . .275, 276
Residue gas . . .3, 169, 192, 193, 194, 195, 196, 197, 217,
219, 233, 235, 237, 238, 241, 242
allocation of . . .196
Restoration. (SeeDismantlement, restoration, and
abandonment [DR&A])
Retained interest*. (SeeEconomic interest)
Retirements of proved properties . . .357
sales and abandonments . . .25, 40, 43, 46, 355-358,
363-366, 380-384, 611
Revenue accounting . . .176, 188, 219, 220, 224, 225, 228,
230, 235, 248, 372, 373
accounts receivable approach . . .230
cash receipts approach . . .229, 230
centers . . .220, 224, 225, 230. (See alsoSales)
deck . . .228, 231, 235, 248
Revenue method of full cost amortization. (SeeDD&A, full
cost)
Revenue subledger . . .230, 233
Revenues held in suspense . . .44, 48, 223-224, 3-4
Reversionary interest . . .344, 368, 391
Rig . . .Chapter 8, 106-130
cable tool rig . . .4, 113
mobile . . .553 (See Rig, offshore and Workover)
offshore rig . . .115, 119, 120, 554, 555
drilling barge . . .553, 554
drilling ship . . .553, 554
jack-up . . .110, 119, 553-555
semi-submersible . . .110, 119, 120, 553-556
submersible . . .553-554
rotary rig . . .113, 114, 118
Right of asset . . .348
Risk . . .Chapter33, 566-582
assessment . . .30, 166, 567, 568
control . . .22, 30, 31, 566
inherent . . .426, 471, 566
Risk management . . .31, 107, 304, 565, 566, 567, 568, 570,
571, 576, 580, 581
counterparty credit . . .572, 573, 577
correlation . . .577
credit . . .577
liquidity . . .577
price . . .576
Rocks. (SeeReservoir)
Rotary rig. (SeeRig)
Royal Dutch Shell . . .10
Royalty . . .26-28, 48, 49, 80-90, 111, 149, 150, 151, 152,
156, 196, 200, 209, 220-254, 263, 292, 319, 348, 352-354,
366, 367, 379-390, 395, 396, 401, 428-454, 483, 492, 552,
1-7, 2-3, 2-8, 2-15, 2-18, 2-21, 3-2
accounting for . . .26-28, 33, 48, 49, 79-85, 87-90, 149152, 220-226, 242-246 (SeeNonoperating interest)
advance royalty*
compensatory . . .89
guaranteed or minimum . . .89, 243, 244
interest . . .82, 85, 90, 149-152, 221-226, 234, 235,
292, 348, 352-345, 380, 381
lease provision . . .82

Index

overriding. . .90, 352-354, 366-367, 380-381, 384-385,

447 (SeeOverriding royalty interest [ORRI])
reporting . . .224
shut-in . . .242-243
Royalty trust . . .401
Run of oil . . .202
Run ticket . . .168, 177, 180, 185, 202

S_ _______________________
S-X Rule 4-10. (SeeSecurities and Exchange Commission
[SEC])
Sales
accounting for oil, gas, and NGL sales . . .Chapter 13,
219-248
of gas . . .233-235, 238
of NGL . . .235-237
of oil . . .227-230
of property . . .Chapter 21, 347-367, 418 (See also
Conveyances)
Salt dome . . .59, 197
Salt water disposal well. (SeeWell)
Salvage value . . .47, 77, 133, 136, 278, 317, 318, 339, 344,
449, 451, 2-5, 2-8, 2-9, 2-11, 2-32, 2-33, 2-34
Sarbanes-Oxley Act . . .31, 538
Satellite survey . . .62
Seal (a rock layer) . . .58, 61
Secondary recovery. (SeeEnhanced [improved] recovery)
Securities and Exchange Commission (SEC) . . .Appendix 1
Accounting Series Release No. 253 . . .37
Accounting Series Release No. 257 . . .37, 478
Accounting Series Release No. 258 . . .37, 310, 329, 478
Accounting Series Release No. 269 . . .479
Codification of Financial Reporting Releases . . .95,
308, 424, 499
Guide 2, Disclosure of Oil and Gas Operations . . .497
Regulation S-K . . .479, 497, 498, 1-10
Regulation S-X Rule 4-10 (Reg. SX Rule 4-10) . . .
Appendix 1
Staff Accounting Bulletin, Topic 2D . . .480, 531, 535
Staff Accounting Bulletin, Topic 12 . . .310
Sedimentary rocks . . .55
Seismic. (SeeGeological and geophysical)
Seismograph*
Semi-submersible rigs. (SeeRig)
Sensitivity analysis . . .547
Separator. (SeeEquipment [lease and well])
Settlement statement . . .197, 224, 227, 229, 231, 237, 238,
248
gas plant . . .197, 235, 237-240
Severance taxes. (SeeTaxes: production and severance)
Shakeout . . .177
Sharing arrangements. (SeeDrilling [sharing] arrangements)
Shipper . . .209, 212, 213, 214, 215, 216, 250
Shooting . . .68, 74, 75, 92, 260
Shooting rights . . .68, 74, 75, 92
Shot point . . .64
Shut-in reserves. (SeeReserves, oil & gas)
Shut-in royalties . . .83, 242, 243, 244
Shut-in well . . .117, 121, 145, 208
Slim hole*
SMOG. (SeeStandardized measure)

Index

Society of Petroleum Engineers (SPE) . . .32, 33, 266, 267,

268, 269, 271, 279, 280, 303, 550, 563
Petroleum Resources Management System . . .32, 266
Society of Petroleum Evaluation Engineers (SPEE) . . .32, 33,
225, 266, 267, 304, 541, 547, 549, 550
SOP 78-9, Accounting for Investment in Real Estate Ventures
. . .413, 416
SOP 98-5, Reporting on the Costs of Start-up Activities . . .
406, 414, 424
Sour crude oil . . .3
Sour gas . . .3
Spacing . . .85, 106, 111, 130, 148, 150, 273, 284
Spectrometer . . .189
Split connection*
Spot sales contracts. (SeeSales)
Spud. (SeeWell)
Staff Accounting Bulletins. (SeeSecurities and Exchange
Commission [SEC])
Staking . . .452
Standardized measure (SMOG) . . .410, 482, Chapter 29,
502-528, 2-22, 2-25, 2-28
basic rules . . .502-504
example of computing SMOG . . .505-524
examples of computing SMOG changes . . .508, 510518, 524, 525
illustrative disclosures . . .502-506, 514-518, 526
usefulness . . .527
waiver for certain partnerships, . . .595-596
Standard Oil . . .5
Statement of Financial Accounting Standards (FAS) . . .37,
90, 94-96, 134-138, 143-146, 232, 256, 269, 288, 298,
478, 489, 526, 577, 581, 1-6, 1-10
No. 19, Financial Accounting and Reporting for Oil
and Gas Producing Companies . . .37, 38, 90, 94, 96,
134, 135, 138, 269, 298, 302, 308, 310, 333, 348, 350,
368, 380, 381, 478, 479, 488, 490, 494, 499, 500, 598,
Appendix 2
No. 19-1, Accounting for Suspended Well Costs . . .
134, 494, 499, 627, 632
No. 25, Suspension of Certain Accounting
Requirements for Oil and Gas Producing companies . . .
37, 269, 310, 348, 479, 563, 594
No. 34, Capitalization of Interest Cost . . .143-146, 322,
344
No. 69, Disclosures about Oil and Gas Producing
Activities . . .38, 270, 308, 319, 344, 368, 410, 436, 437,
441, 477-483, 485, 488, 490, 492, 493, 497, 499, 502504, 506-508, 510, 511, 513-515, 519, 524, 526-528,
538, 550, Appendix 1 (SeeDisclosures andStandardized measure)
No. 109, Accounting for Income Taxes . . .464-467,
470-472, 474, 475, 528, 535 (See also Taxes, income)
No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of . . .38
No. 131, Disclosures about Segments of an Enterprise
and Related Information . . .596
No. 133, Accounting for Derivative Instruments and
Hedging Activities . . .232, 256, 527, 577-581
No. 138, Accounting for Certain Derivative Instruments
and Certain Hedging Activities, an Amendment of FASB
Statement No. 13 . . .578
No. 141, Business Combinations . . .475, 530, 535, 538

14

No. 143 Accounting for Asset Retirement Obligations

. . . 288, 302, 313, 323, 324, 331, 332, 337-340, 343346, 499, 514
No. 144, Accounting for the Impairment or Disposal of
Long-lived Assets . . .38, 40, 95, 278, 295-308, 324,
332, 333, 343, 364, 365, 471, 538, 539
No. 149, Amendment of Statements 133 on Derivative
Instruments and Hedging . . .533, 578, 579
No. 154, Accounting Changes and Error Corrections . . .
283, 291, 292
No. 157, Fair Value Measurements . . .581, 582
Static pressure . . .187, 188
Steam injection. (SeeEnhanced [improved] recovery)
Step-out well (offset well) . . .129
Stimulation . . .56, 125, 560, 562
Stock tanks . . .173, 174
Straddle plant . . .194
Straight-up arrangement . . .395
Strapping . . .176
Strategic Petroleum Reserve . . .7, 109, 173, 197
Stratigraphic test well . . .135, 137, 558, 1-4, 2-7, 2-11,
2-29, 2-31
Stratigraphic traps . . .58, 60
Strip a well*
Stripper well* . . .454
Structural maps* . . .6265
Structural traps . . .58
Subleases. (See Leases)
Submersible rigs . . .119, 553, 554
Subsurface geophysical measurements . . .63, 64
Subsurface mapping . . .6365
cross-section mapping*
structural surface maps . . .62, 63, 91
Subsurface owner . . .80
Successful efforts accounting method . . .310, 413, 499, 2-23
accounting policy disclosure . . .36-40, 42-45, 50-52,
68, 71, 73-78, 92, 94-97, 102, 104, 131-134, 136, 138140, 143, 144, 146, 157, 164, 225, 242-244, 262, 263,
266, Chapter 17, 281-296, 298, 300, 302, 304, 307,
308, 310, 313, 315, 317, 324, 330, 333, 334, 339, 348353, 355-357, 360, 363, 365, 366, 368, 370, 372, 374,
375, 378, 381-384, 388, 398, 403, 406, 410, 411, 413,
415-418, 421, 422, 468, 469, 478, 482, 499, 532, 534,
557-559, 562, Appendix 1
accounts . . .39, 40, 43-49
amortization or DD&A . . .Chapter 17, 281-296 (See
DD&A, successful efforts)
conveyances . . .37, 38, 348-353, 355-357, 363, 365,
366 (See alsoConveyances)
costs incurred . . .39-42
disposition of capitalized costs . . .Chapter 17, 281-296
(See alsoImpairment of proved property, Impairment of
unproved properties, and DD&A)
history of . . .36-38
impairment. (SeeImpairment of proved property
andImpairment of unproved properties)
method defined . . .36
overview of . . .36-38, Figure 4-1
privately held company . . .37
Success ratio . . .19
Supermajors . . .10, 16
Supplemental disclosures. (SeeDisclosures)

15

Support equipment and facilities . . .48, 54, 136, 258, 262,

488, 499, 1-4, 1-5, 2-1, 2-5, 2-6, 2-7, 2-10, 2-20, 2-23,
3-2, 3-3, 3-4, 3-6
depreciation of . . .78, 262, 293-294
disclosure of costs . . .488
Surface casing. (SeeCasing)
Surface owners . . .80
restoration. (SeeDismantlement, restoration, and
abandonment [DR&A])
Surrender . . .86, 93, 97, 99, 100, 357
Surrendered or abandoned property. (SeeAbandon)
Swab . . .126
Swaps . . .214, 571, 573, 575, 580
Sweet crude. (SeeCrude oil)
Sweet gas. (SeeGas [natural])
Synthetic-instrument accounting . . .577

T_________________________
Take-or-pay contract . . .469
Take in-kind. (SeeIn-kind)
Tangible costs. (SeeEquipment [lease and well])
Tank battery . . .173, 176, 553
Tank bottoms . . .173
Tank strapper . . .176
Tank table . . .177, 185
Tax shield . . .540, 543, 550
Taxes . . .Chapters 26 and 27 (See alsoTaxes, income)
ad valorem (property) . . .42, 54, 71, 93, 95, 152, 220,
227, 242, 261
foreign . . .18, 459, 470
production and severance . . .227, 261, 270
Taxes, income . . .28, 36, 37, 38, 51, 52, 69, 218, 278, 299,
301, 302, 305, 322, 323, 326, 327, 329, 382, 428, 429,
430, 431, 432, 435, 438, Chapter 26, 446-462, Chapter
27, 464-476, 481, 497, 502, 503, 504, 505, 506, 507, 508,
509, 510, 513, 514, 516, 517, 518, 520, 521, 523, 524,
525, 529, 535, 543, 545, 1-7, 1-8, 2-17, 2-23, 2-28
accounting for . . .52, Chapter 26, 445-462
allowable depletion . . .454
alternative minimum tax (AMT) . . .446, 459, 460, 470
at-risk rules . . .458
business combinations . . .475, 535
corporate . . .218, 457, 458
cost depletion . . .449, 453-455
credits . . .459, 461, 462
deferred . . .464-476
delay rentals . . .448, 468
DD&A . . .469
depreciation of tangible equipment costs . . .449, 450, 460
disclosure requirements . . .472-474
dry hole costs . . .453
economic interest definition . . .446, 447
enhanced oil recovery credit . . .461
excess IDC . . .460, 461
FAS 109 . . .464-467, 470-472, 474, 475, 528, 535
G&G (geological and geophysical) . . .448, 449, 469
intangible drilling and development costs (IDC) . . .449452, 456, 457
intercorporate tax allocation . . .475
interim financial reporting . . .476
joint venture . . .450, 456, 457, 475

Index

lease abandonment . . .448, 452

leasehold . . .448
limited liability company . . .456-458
loss limitations . . .458, 459
overviews . . .446, 479
partnership . . .456-459
passive loss rules . . .458, 459
percentage (or statutory) depletion . . .450, 453-455
permanent differences . . .465, 466, 469
property definition . . .446, 447
qualified production activities income . . .462
S corporation . . .456-459
safe harbor election . . .453
sharing arrangements . . .455, 456
sources of taxable income . . .470, 471
tangible equipment costs . . .449
temporary differences . . .464-475
valuation allowance . . .470-473
Tcf . . .3, 7
TD (total depth of well) . . .106
Temporarily abandoned well*
Tertiary recovery. (SeeEnhanced [improved] recovery)
Test well contributions . . .68, 75
Texaco . . .5, 10
Texas Independent Producers and Royalty Owners
Association (TIPRO) . . .33
Texas Railroad Commission . . .6
Thermal stimulation . . .562
Thief . . .177
Thousand cubic feet (Mcf) . . .3, 186, 189
Three-dimensional (3-D) seismic. (See Geological and
geophysical [G&G])
Tight hole*
Tight sands . . .10, 62
Titusville . . .4, 113
Top leases . . .104
Toppling . . .336
Trans Alaska Pipeline System (TAPS) . . .7, 200
Transportation . . .5, 6, 7, 9, 14-16, 18, 19, 23, 83, 89, 112,
113, 119, 135, 155, 170, 194, 197, 200-218, 232, 235-241,
254, 263, 452, 489, 496, 526, 541, 546, 557, 558, 1-5, 2-7,
2-9, 2-34, 3-3
gas . . .6, 9, 210-214
NGL . . .216-218, 235, 237-239
oil . . .200-202, 556
Transporter . . .45, 173, 187, 201, 209, 212, 213, 215, 250
Trap . . .58, 59, 60, 61, 140
Treater . . .172
Tripping-in/out . . .122
Truncation traps . . .58, 60
Tubing. (SeeEquipment [lease and well])
Turnkey well . . .362, 417, 1-8

U_ _______________________
U.S. government . . .18, 108, 173
Bureau of Land Management (BLM) . . .106, 107, 404
Department of Energy (DOE) . . .7, 11, 33, 37, 69, 218,
478, 1-2, 1-11, 2-31, 4-2
Department of the Interior . . .33, 552
Energy Information Administration (EIA) . . .9, 14, 33,
148, 186, 198, 202, 216, 217, 274, 453, 571, 4-2

Index

Environmental Protection Agency (EPA) . . .107

Federal Energy Regulatory Commission (FERC) . . .
6, 109, 197, 207, 208, 212, 213, 218, 250, 256, 571
(SeeSecurities and Exchange Commission [SEC])
Federal Power Commission . . .6, 206
Fish and Wildlife . . .108
Minerals Management Service (MMS) . . .33, 74, 107,
224, 242, 336, 552
Occupational Safety and Health Administration (OSHA)
. . .107, 108
Unconformities . . .60, 61
Undeveloped property. (See Unproved property)
Unit-of-production method (of amortization). (SeeDD&A)
Unitization . . .24, 80, 83, 148, 150, 245, 387, 395, 396, 397,
398, 399, 401, 404, 2-14
agreements . . .395
equalizations . . .396401
federal . . .401402
participation factors . . .395, 396, 398
redetermination of interests . . .399401
Unproved property . . .39, 42, 45, 46, 48, 51, 52, 76, 96, 98,
103, 104, 285, 313, 317, 325, 326, 328, 349, 350, 351,
352, 353, 357, 362, 365, 366, 368, 381, 383, 386, 388,
389, 469, 472, 527, 2-11, 2-13, 2-14, 3-2
accounting for acquisition, retention, and surrender . . .
4546, 5152, 76. Chapter 7,79-104
acquisition. (SeeAcquisition costs)
carrying costs of. (SeeCarrying costs)
conveyances of. (SeeConveyances)
impairment of. (SeeImpairment of unproved properties)
income tax . . .104
offshore . . .81
surrender. (SeeAbandon)

V_ _______________________
Valuation . . .19, 95-98, 102, 250-252, 278, 300, 304, 305,
350, 398, 463, 464, 470, 471, 472, 473, 475, 476, 478,
483, 488, 492, 493, 499, 527, 530, 532, 534, 537-543,
545, 546, 548, 550, 1-13, 2-7, 2-8, 2-14, 2-19, 2-20, 2-21,
2-23, 2-24, 2-25, 2-26 (See alsoFair value)
amortization tax benefit . . .543544
cost approach . . .539, 543
discounted cash flow . . .539, 542, 547
general valuation concepts . . .538543
income approach . . .539, 543, 545, 548
market approach . . .542, 545, 546
SPEE annual survey . . .541, 549
Value-based disclosures. (SeeDisclosures)
Valve . . .117, 160, 173, 176, 559, 1-2, 2-6
Vibroseis . . .64
Viscosity . . .175, 560, 562
Volatility . . .8, 9, 14, 200, 201, 549, 570, 573, 576, 577
Volumes, measurement of . . .3
gas . . .34, 186189
NGL . . .189
oil . . .176186
VPP. (SeeProduction payment)

W________________________
WACC. (SeeWeighted average cost of capital)

16

Water disposal . . .111, 170, 259, 262, 451, 452, 1-4, 2-30
Water drive . . .275, 559
Water flooding . . .461, 560
Water injection . . .560, 1-4, 2-30
Water well*
Weighted average cost of capital . . .540, 541, 546, 549
Well
AFE . . .47-48, 70-75, 140-143 (SeeAuthorization for
expenditure)
completion of . . .126-127
drilling . . .Chapter 8, 105-130
equipment . . .127-129 (See alsoEquipment [lease and
well])
full cost accounting for development well costs . . .138
full cost accounting for exploratory well costs . . .136
gross and net productive oil and gas wells . . .497
number of . . .130
placing on production . . .170-176
plugging and abandonment . . .17, 336-337 (See
alsoPlug and abandon)
proposal . . .112, 113
successful efforts accounting for development well
costs . . .136-138
successful efforts accounting for exploratory well costs
. . .132-136
tests . . .42, 43, 50, 54, 68, 71, 75, 137
types of . . .137
Wellhead. (SeeEquipment [lease and well])
West Texas Intermediate (WTI) . . .9, 180, 198, 203, 541, 546,
549, 572, 576
Western States Petroleum Association (WSPA) . . .33
Wet barrels . . .203
Wet gas. (SeeGas [natural])
Wheeling . . .214
Wildcat*. (SeeWell)
Windfall profit tax . . .8
Work in progress . . .26, 27, 47, 48, 67, 68
accounts for . . .47, 48, 73
drilling . . .132, 133, 136, 138
G&G . . .73-74
workover . . .47, 48, 260, 261 (SeeWorkover)
Working interest. (SeeEconomic interest)
Workover . . .48, 115, 140, 141, 151, 260, 261, 1-8, 3-2
World Petroleum Council (WPC) . . .32, 266, 267, 268, 269,
271, 303

X Y Z_ ____________________
Zero-cost collar . . .576
Zone . . .15