Glossary

reserves the Company believes are located in a structurally superior position (updip; at a shallower depth) in a reservoir penetrated by a well and known to contain hydrocarbons based either on production or well log indicators

barrel(s)

billion cubic feet (of gas)

The Bureau of Ocean Energy Management, Regulation, and Enforcement, a bureau in the US Department of the Interior and formerly known as the Minerals Management Service (MMS)

barrels of oil produced per day

barrels of water produced per day

a conditional sale arrangement where a buyer acquires or "earns" working and net revenue interests in a mineral lease from a seller by performing operations on the mineral lease, most commonly the drilling of a new well

when an acquirer holds the lease indefinitely, as long as production is maintained in paying quantities, the leaseholder will have a set period in which to start producing (called the "primary term," which is generally five years for OCS leases in the shallow shelf water and one or more years for onshore leases), however, the lease generally expires after the primary term once production, and operations to obtain or restore production, have ceased for 180 days for OCS leases and a shorter period, generally 90 days, for onshore leases. In the event of a lapsing lease, the leaseholder will generally be required to decommission existing equipment and return the leased area to a state agreed with the lessor

crude oil, natural gas and liquid natural gas in the form first produced from below the surface of the earth

thousand barrels of oil

thousand barrels of oil produced per day

thousand barrels of water produced per day

thousand cubic feet

million cubic feet of gas

million cubic feet of gas produced per day

the percentage of revenues due to an interest holder in a property, net of royalties, overriding royalties or other burdens on the working interest

net present value

outer continental shelf, United States

the entity with the right and obligation to operate the lease or leases; when there is only one working interest owner, these rights and obligations arise by virtue of being the sole working interest owner; when there are multiple working interest owners, these rights and obligations arise under a contract called an operating agreement executed by the working interest owners of the lease or leases

an interest in an oil and gas property created by a working interest owner and paid out of the working interest entitling the owner to a share of the proceeds of hydrocarbon production free of the costs of production

a structure attached to the seabed and rising above sea level onto which facilities and equipment necessary to produce hydrocarbons in an offshore environment are located

those hydrocarbon volumes which it is estimated may be potentially recoverable from as yet undiscovered accumulations; prospective resources can be quoted as either unrisked or risked volumes

an interest in an oil and gas property reserved by a lessor of a mineral lease entitling the owner to a share of hydrocarbon production free of costs of production

a well that is closed down temporarily for repair, building up of reservoir pressure, lack of market, lack of an available pipeline outlet, or for some other reason

to abandon a lower portion of a wellbore hole and divert the drill path in a new direction using the upper portion of the bore hole; this may be done to save drilling costs (the costs of drilling the upper portion of the bore hole) when targeting a new bottom hole location or to bypass mechanical impairments or equipment obstacles in the original bore hole

a project to inject water into a reservoir in a structurally low position relative to the take point of the hydrocarbons in order to increase and/or maintain reservoir pressure, thereby maximising the quantity of hydrocarbons produced from the reservoir

the lease interest which gives the owner the right to drill, produce and conduct operations (subject to contractual rights with other joint working interest owners pursuant to operating agreements) on a property and share in production