CARRIED WORKING INTEREST - A fractional interest in an oil and gas property conveyed or assigned to another party by the operator or owner of the working interest. In its simplest form, a carried working interest is exempt from all costs of development and operation of the property. However, the carried interest may specify “to casing point”, “to setting of tanks”, or “through well completion”. If the arrangement specifies through well completion, then the carried interest may assume the equivalent fractional interest of operating costs upon completion of the well. There are many different types of carried interests, the details varying considerably from arrangement to arrangement. One authority has observed, “The numerous forms this interest is given from time to time make it apparent the term ‘carried interest’ does not define any specific form of agreement but serves only as a guide in preparing and interpreting instruments”.
CASING - Steel pipe used in oil wells to seal off fluids in the rocks from the bore hole and to prevent the walls of the hole from caving.
CASINGHEAD - The top of the casing set in a well; the part of the casing that protrudes above the surface and to which the control valves and flow pipes are attached.
CASINGHEAD GAS - Gas produced from an oil well as distinguished from gas from a gas well. The casinghead gas is taken off at the top of the well or at the separator.
CASING POINT - A term that designates a time when a decision must be made whether casing is to be run and set or the well abandoned and plugged. In a joint operating agreement, casing point refers to the time when a well has been drilled to objective depth, tests made, and the operator notifies the drilling parties of his recommendation with respect to setting casing and a production string and completing the well. On a marginal well, the decision to set pipe is often difficult. To case a well often costs as much as the drilling. On a very good well there is no hesitation; the operators are glad to run casing and complete the well.
CEMENT - (1) To fix the casing firmly in the hole with cement, which is pumped through the drillpipe to the bottom of the casing and up into the annular space between the casing and the walls of the well bore. After the cement sets (hardens), it is drilled out of the casing. The casing is then perforated to allow oil and gas to enter the well. (2) Sedimentary. Mineral material, usually precipitated chemically, that fills the spaces between individual grains of a consolidated (hard) sedimentary rock; the binding material that holds the grains together. The most common binders are silica, carbonates, and certain iron oxides. Other cements are clay minerals, barite, gypsum, anhydrite, and pyrite.
CHOKE - A type of orifice installed at the surface on the tubing string to adjust and control the amount of oil or gas flowing from a well. It is customary to refer to the production of a well as so many barrels or thousands of cubic feet through a 1/4-inch or 1/2-inch choke, or whatever the size of the opening. The flowing pressure exerted by the well's production give an indication of the strength of the well, and is helpful in determining whether a well is commercial
CHRISTMAS TREE - (1) An assembly of valves mounted on the casinghead through which a well is produced. The Christmas tree also contains valves for testing the well and for shutting it in if necessary. (2) A subsea production system similar to a conventional land tree except it is assembled complete for remote installation on the seafloor with or without diver assistance. The marine tree is installed from the drilling platform; it is lowered into position on guide cables anchored to foundation legs implanted in the ocean floor. The tree is then latched mechanically or hydraulically to the casinghead by remote control.
COMMERCIAL WELL - A well of sufficient net production that it could be expected to pay out in a reasonable time and yield a profit from the operation. A shallow 50-barrel-a-day well in a readily accessible location onshore could be a commercial well. Such a well in virtually any offshore area where enormously expensive producing facilities and pipe lines would have to be constructed would not be considered commercial.
COMPLETED WELL - A well that has been mechanically completed for production or service use. There may be more than one completed zone in the well. (See Active well.)
COMPLETION - To finish a well so that it is ready to produce oil or gas. After reaching total depth (T.D.), casing is run and cemented; casing is perforated opposite the producing zone, tubing is run, and control and flow valves are installed at the wellhead. Well completions vary according to the kind of well, depth, and the formation from which the well is to produce.
COMPLETION FUNDS - Completion funds are formed to invest in well completions, to finance the completing and equipping of a potentially productive well. After a well is drilled into a productive formation, there remain the costs of setting pipe, (casing the well); perforating, testing, acidizing, or fracturing the formation; and running production tubing and installing pumping equipment, separators, stock tanks, etc. The operator who drills the well may not have the financial resources to complete the well, so he may sell part or all of his interests to a completion fund. Completion funds are not as risky an investment as drilling funds, but are less certain than income funds and royalty funds.
CONCESSION - Usually used in foreign operations and refers to a large block of acreage granted to the operator by the host government for a certain time and under certain government conditions which allows the operator to conduct exploratory and/or development operations. The Concession Agreement assures the holder of certain rights under the law.
CONDENSATE - A natural gas liquid with a low vapor pressure, compared with natural gasoline and liquified petroleum gas. It is produced from a deep well where the temperature and pressure are high. Gas condenses as it rises up the wellbore and reaches the surface as condensate. Similarly, condensate separates out naturally in pipelines or in a separation plant by the normal process of condensation.
CONTINENTAL MARGIN - A zone separating the emergent continents from the deep sea bottoms.
CONTINENTAL SHELF - A broad, gently sloping, shallow feature extending from the shore to the continental slope.
CONTINENTAL SLOPE - A relatively steep, narrow feature paralleling the continental shelf; the region in which the steepest descent of the ocean bottom occurs.
CORE SAMPLE - A solid column of rock, usually from 2 - 4 inches in diameter, taken from the bottom of a well bore as a sample of an underground formation. Cores are also taken in geological studies of an area to determine the oil and gas prospects.
CRUDE OIL - Oil as it comes from the well; unrefined petroleum.
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