Ad Valorem Tax - A property tax levied by the county on minerals based on their value

APD - Application for Permit to Drill

API – American Petroleum Institute

API Number - A unique identifying number for all oil and gas wells drilled in the U.S. The system was developed by the American Petroleum Institute.

API14 - The full 14-digit API Number

BBL – Barrel (42 gallons in a US oil barrel)

BTU – British thermal unit; The amount of heat required to raise the temperature of one pound of water one degree Fahrenheit under standard conditions of pressure and temperature.

BTU Factor - The amount of BTU per MCF of natural gas; used to price gas in $/mmbtu

CMA - Certified Mineral Appraiser (through IIMA)

Completion - The process after drilling operation is complete; involves the setting of casing, tubing, packers, possibly down hole pumps, possibly hydraulic fracturing, possibly installing sand screens etc.

DCA - Decline Curve Analysis

DCF - Discounted Cash Flow

DO - Division Order; A schedule of owners and their decimal ownership share in revenues of a well’s production derived from the sale of oil or gas.

Drilling Rig - The equipment used to bore into the earth. Rotary style drilling is what is primarily used in today’s drilling.

Drill Type - If the well is Vertical (V) or Horizontal (H) at the reservoir

DUC - A Drilled Uncompleted well

EIA – United States Energy Information Administration

Effective Date - The date on which the market value was determined

EUR – Estimated Ultimate Recovery

Executive Rights - In minerals, this includes the right to negotiate and execute oil & gas leases, lease bonuses, and delay rentals.

FMV – Fair Market Value

Fracturing (frac, fracking, hydraulic fracture) - The process of using high pressure to pump sand along with water and other fluids into subsurface rock formations in order to improve the flow of oil & gas into a well bore.

HBP - Held By Production; Mineral lease provision that extends the right to operate a lease as long as the property produces a minimum quantity of oil & gas.

Henry Hub - Located in Erath, LA, the Henry Hub is a pipeline interchange and the delivery point for the New York Mercantile Exchange (NYMEX) natural gas futures contracts.

IRR – Internal Rate of Return

Landman - A person, male or female, whose role is that of contacting mineral rights owners regarding the leasing of their mineral interests for oil and gas production

Lease - The abbreviated term for an Oil, Gas and Mineral Lease (OGML); the land described in the lease is often referred to as the "lease unit"

Lease Bonus - The cash consideration that is paid by the lessee for the execution of an oil and gas lease by a landowner.

Lessor - The party who grants the lease (usually the mineral owner)

Lessee - The party who purchases the lease (usually the operator)

MCF – Thousand cubic feet of natural gas

MM – Million (MMCF = Million cubic feet of natural gas)

MMbtu - 1 cf natural gas = 1039 Btu (as a standard) (See BTU)

NGLs – Natural gas liquids

NMA – Net Mineral Acre

NPRI - Non-Participating Royalty Interest; an interest carved from the mineral estate where the holder has no power to negotiate or execute a lease or extract the minerals themselves

NRA – Net Royalty Acre (1 NMA leased at 1/8th Royalty)

NRI - Net Revenue Interest

OGML - Oil and Gas Mineral Lease; Agreement outlining the basic terms of developing lands or minerals such as royalty to be paid, length of time, description of lands

Operator - A company or individual, acting for himself or as an agent for others who has primary responsibility for maintaining well operations and complying with state rules and regulations.

ORRI – Overriding Royalty Interest; A fractional, undivided interest with the right to participate or receive proceeds from the sale of oil and/or gas. It is not an interest in the minerals, but an interest in the proceeds or revenue from the oil & gas minerals sold. The interest is limited to a specific tract of land and is bound to the terms limits of the existing lease.

P&A - Plugged & Abandoned

Paid-up Lease - A lease where all cash consideration is paid upon execution of the lease, rather than in annual rental payments.

PDP – Proven Developed Producing

PDNP – Proven Developed Non-Producing

PUD – Proven Undeveloped

Primary Term - The initial period provided in an oil and gas lease to develop the property. Oil & gas leases often have a secondary term referred to as an "extension"

PROB – Probable Undeveloped

Pooling - A provision in an oil and gas lease allows the oil and gas company to take all or a portion of the leased land and pool it or place it with other lands into a unit for the development and production of oil and gas.

POSS – Possible Undeveloped

Post-Production Costs - The expenses incurred in order to get the gas from the wellhead to market. These costs include gathering, compression, dehydration, processing, fractionation, marketing, treating, handling, and transportation

PRMS – Petroleum Resources Management System

Pugh Clause - A clause often added to an oil lease to limit holding non-producing lands or depths beyond the primary term of a lease. Also known as a Freestone rider.

PV – Present Value

PV10 - Present value of future income using a 10% discount rate

RAF – Reserves Adjustment Factor

RADF - Risk Adjusted Discount Rate

Royalty - Revenue generally received by a mineral owner from the production of oil or gas, free of costs (except taxes).

Royalty Rate - Percentage of gross or net production that is paid to the mineral owner. Usually described as a fraction (1/8th, 3/16th, 1/6th, 1/5th, 1/4, etc.) or percent (16%, 25%, etc)

SCF – Standard cubic feet of gas

Shut-In - When a well capable of producing is mechanically temporarily stopped from producing

SWD - Salt Water Disposal; a type of well used to dispose of water in an underground formation

Spud Date - The day the drill bit breaks ground on a new well

TA - Temporarily Abandoned; typically means the wellbore is not yet plugged but the well is currently unable to produce.

Unit (production unit, proration unit, drilling unit) - The area that the company intends to produce oil or gas from by using vertical or horizontal wells

Unit Factor - The owner's acres in a unit divided by the number of acres in the unit

USPAP – Uniform Standards of Professional Appraisal Practice

Working Interest - A type of interest where the owner bears their fractional share of all costs in oil & gas extraction, including drilling, exploration, operation, and plugging of a well.

WTI – West Texas Intermediate (Crude Oil Index)