Glossary-SOGASSOGAS Informational Glossary

Account – An accounting form that is used to record the increase and decrease in each financial statement item
Account Payable – The liability created by a purchase on account
Account Receivable – A claim against the customer created by selling merchandise or services on credit
Accounting – An information system that provides reports to stakeholders about the economic activities and condition of a business
Activity Analysis – The study of employee effort and other business records to determine the cost of activities
Adjusting Entries – The journal entries that bring the accounts up to date at the end of the accounting period
Aging the Receivables – The process of analyzing he accounts receivable and classifying them according to various age groupings, with the due date being the base point for determining age
Allowable – The amount of oil or gas which a well or lease is permitted to produce under proration orders of a State regulatory body.
API Gravity – The density of crude oil on a scale adopted by the American Petroleum Institute
Assets – The resources owned by a business
Associated Gas – Gas occurring in or produced from a gas cap associated with an oil zone
Backpressure – Pressure caused by restriction of the natural flow of oil and gas
Balance of the Account – The amount of the difference between the debits and the credits that have been entered into an account
Balance Sheet – A list of the assets, liabilities, and owner’s equity as of a specific date, usually at the close of the last day of a month or year
Bank Statement – A summary of all transactions mailed to the depositor or made available online by the bank each month
Barrel of Oil – The standard measure of crude oil volume in the U.S., being 42 U.S. gallons of oil at 60 degrees Fahrenheit
Basin – A geologic region of sediments formerly occupied by an ancient sea and separated from other basins by upwarped rock “highs”
Bed – A recognizable sedimentary rock layer or strata
BTU – British Thermal Unit, the amount of heat needed to raise the temperature of one pound of water one degree Fahrenheit
Capital Stock – The portion of a corporation’s owners’ equity contributed by investors (owners) in exchange for shares of stock
Chart of Accounts – A list of the accounts in the ledger
Casing Head Gas – Gas that is produced along with oil from an oil well
Casing Point – The objective depth, either a specified depth or the depth at which a specific zone is penetrated
Choke – A short heavy steel pipe section having an orifice for restricting and controlling the flow of oil and gas
Common Stock – The stock outstanding when a corporation has issued only one class of stock
Condensate – Hydrocarbons which are in the gaseous state under reservoir conditions but become liquid at the surface and may be recovered by conventional separators
Contra Account – An account offset against another account
Cost – A payment of cash for the purpose of generating revenues
Credits – Amounts entered on the right side of an account
Current Assets – Cash and other assets that are expected to be converted to cash or sold or used up, usually within one year or less, through the normal operations of the business
Current Liabilities – Liabilities that will be due within a short time and that are paid out of current assets
Day Work – In drilling contracts, work paid for at an agreed price per day
Debits – Amounts entered on the left side of an account
Delivery Pressure – The agreed pressure for delivery of gas into a gas pipeline under a gas purchase contract
Division – A decentralized unit that is structured around a common function, product, customer, or geographical territory
Employee’s Earnings Record – A detailed record of each employee’s earnings
Expenses – Assets used up or services consumed in the process of generating revenues
Exploration – The search for oil and gas
FICA Tax – Federal Insurance Contributions Act tax used to finance federal programs for old-age and disability benefits (social security) and health insurance for the aged (Medicare)
Field – A singly occurring oil or gas pool or an area of overlying separate oil or gas pools
Financial Accounting – The branch of accounting that is concerned with recording transactions using generally accepted accounting principles (GAAP) for a business or other economic unit and with a periodic preparation of various statements from such records
Financial Accounting Standards Board (FASB) – The authoritative body that has the primary responsibility for developing accounting principles
Financial Statements – Financial reports that summarize the effects of events on a business
Fiscal Year – The annual accounting period adopted by a business
Fixed Assets – Assets that depreciate over time, such as equipment, machinery and buildings
Fixed Costs – Costs that tend to remain the same in amount, regardless of variations in the level of activity
Gas Shrinkage – Gas consumed, absorbed or lost in the process of extracting liquid products and making gas saleable
Gas Well – A well producing predominantly natural gas
Gas Gathering System – Pipeline and completion facilities collecting gas from various wells and leases and delivering the gas into a gas pipeline or plant at a central point
General Ledger – The primary ledger, when used in conjunction with subsidiary ledgers, which contains all of the balance sheet and income statement accounts
Generally Accepted Accounting Principles (GAAP) – Generally accepted guidelines for the preparation of financial statements
Goodwill – An intangible asset that is created from such favorable factors as location, product quality, reputation, and managerial skill
Gross Pay – The total earning of an employee for an employee for a payroll period
Gross Profit – Sales minus the cost of merchandise sold
Heater Treater – A device used to break oil-water emulsions and to separate oil from water through the use of heat
Income Statement – A summary of the revenue and expenses for a specific period of time, such as a month or year
Intangible Assets – Long-term assets that are useful in the operation of a business, are not held for sale and are without physical qualities
Interest Revenue – Money received for interest
Invoice – The bill that the seller sends to the buyer
Journal Entry – The form of recording a transaction in the journal
Ledger – A group of accounts for a business
LNG – Liquefied Natural Gas
LPG – Liquefied Petroleum Gas
Land Man – A person whose primary duties are the securing of oil and gas leases
Liabilities – The right of creditors that represent debts of the business
Long-term liabilities – Liabilities that usually will not be due for more than one year
Management Process – The five basic management functions of planning, directing, controlling, improving and decision making
MCF – The standard unit volume of measure for natural gas (1000 cubic feet at 60 degrees Fahrenheit)
Marginal Well – A well capable of producing oil or gas in limited amounts only slightly above economic units
Mixed Cost – A cost with both variable and fixed characteristics
Net Income or Net Profit – The amount by which revenues exceed expenses
Net Loss – The amount by which expenses exceed revenues
Net Pay – Gross pay less payroll deductions; the amount the employer is obligated to pay the employee
Net Sales – Revenue received for merchandise sold to customers less any sales returns and allowances and sales discounts
Notes Receivable – A customer’s written promise to pay an amount and possibly interest at an agreed-upon rate
Open Hole – The uncased part of a well
Owner’s Equity – The owner’s right to the assets of the business
Payroll – The total amount paid to employees for a certain period
Posting – The process of transferring the debits and credits from the journal entries to the accounts
Prepaid Expenses – Items such as supplies that will be used in the business in the future
Producing Well – A well which produces or is capable of producing oil or gas
Profit – The difference between the amounts received from customers for goods or services provided and the amounts paid for the inputs used to provide the goods or services
Receivables – All money claims against other entities, including people, business firms and other organizations
Recompletion – Work on a well to recomplete it in a different formation, either deeper or shallower than originally completed
Retained Earnings – Net income retained in a corporation
Revenues – Increases in owner’s equity as a result of selling services or products to customers
Sales – The total amount charged customer for merchandise sold, including cash sales and sales on account
Shut In – To stop a well from producing, i.e., shut down the pumping unit on a well or close a valve on the flow line of a flowing oil or gas well
Spud – The beginning of drilling operations
Stock – Shares of ownership of a corporation
Stockholders – The owners of a corporation
Stockholder’s Equity – The owners’ equity in a corporation
Tank Bottoms – Emulsified oil with water and other substances concentrated at the bottom of lease storage or other oil storage tanks
Taxable Income – The income according to the tax laws that is used as a base for determining the amount of taxes owed
Trial Balance – A summary listing of the titles and balances of accounts in the ledger
Unit of Measure Concept – A concept of accounting requiring that economic data be recorded in dollars
Viscosity – The measure of a liquid’s resistance to flow
Voucher – A special form for recording relevant data about a liability and the details of its payment
Well – A hold drilled in the search for oil, gas or water, or for a special purpose in connection with oil or gas operations