Glossary

Drilling and well test cost.

A deduction allowed in computing the taxable income from oil and gas wells.

a reduction in US taxes for owners of an economic interest in minerals in place to compensate for the exhaustion of an irreplaceable capital asset. This economic interest includes mineral interest, working interest in a lease, royalty, overriding royalty, production payment interest, and net profits interest.

An accumulation of oil, gas or other minerals which is capable of production.

1. a well drilled to a known producing formation in an existing oil or natural gas field.
2. an exploitation well.

See exploitation well.

Farthest distance between two points on a proration unit.

Date assigned to discovery of a new field.

The first oil or gas well drilled in a new field. The discovery well is the well that is drilled to reveal the actual presence of a petroleum-bearing reservoir, Subsequent wells are development wells.

Well used for disposal of saltwater into an underground formation.

Commonly referred to as solution gas. (Refer to solution gas)

The Commission designated office for the geographic area in which the property or act subject to regulation is located or arises.

This term is used in describing operations performed after those at a point of reference.

The derrick or mast, drawworks, and attendant surface equipment of a drilling or workover unit.

Natural gas that does not have a significant content of liquid hydrocarbons or water vapor.

Any well that fails to discover oil or gas in paying quantities.