OFFSET WELL - (1) A well drilled on the next location to the original well. The distance form the first well to the offset well depends upon spacing regulations and whether the original well produces oil or gas. (2) A well drilled on one tract of land to prevent the drainage of oil or gas to an adjoining tract where a well is being drilled or is already producing.
OIL - A liquid hydrocarbon.
OIL BEHIND THE PIPE - Refers to oil and gas sands or formations knowingly passed through, never produced. Such formations usually were of low permeability (tight formations) that, say 20 years ago, were uneconomical to produce when oil was around $5 or less a barrel. Other times formations would be purposely ignored because the operator was going deeper for bigger game, so the less-spectacular, plain-Jane sands were cased off. When the price of crude oil reached $30 per barrel, the bypassed formations looked pretty good and were opened up and produced.
OIL-CUT MUD - Drilling mud with which crude oil has been unintentionally mixed. This may occur when drilling into or through an oil-bearing formation whose pressure is sufficient to overcome the pressure or weight of the column of mud in the hole. Oil also may become mixed with the drilling mud when a drillstem test is taken.
OIL GRAVITY - The most widely used indicator of a crude oil's worth to the producer is its API gravity. Normally, the price which a producer receives for his oil depends on its gravity, the less dense oils (higher API gravity) being the most valuable. This price schedule is based on the premise that the lighter oil contains higher percentages of the more valuable products such as gasoline. API Gravity (degrees) = (141.5/sp.gr.) - 131.5.
OIL IN PLACE - Crude oil estimated to exist in a field or a reservoir; oil in the formation not yet produced
OIL & GAS LEASES - A contract between an oil operator and a landowner which gives the operator the right to drill for oil and gas on his property for a consideration. It is simply a "ticket to hunt".
OIL LOST - Oil that is spilled or burned (i.e., oil not retained in the production system for sale).
ON THE PUMP - An expression that means a well is incapable of flowing and that the oil is being pumped to the surface by a "pumping unit".
OPEN HOLE - An uncased well bore; the section of the well bore below the casing; a well in which there is no protective string of pipe.
OPEN-HOLE LOGGING - Logging operations in an uncased well bore. The well is logged below the relatively shallow surface pipe.
OPERATING EXPENSE - The expenses incurred through the operation of producing properties.
OPERATOR - The individual, partnership, firm, or corporation having control or management of operations on a leased area or a portion thereof. The operator may be a lessee, designated agent of the lessee, holder of rights under an approved operation agreement, or an agent of an operating rights holder.
ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES (OPEC) - Oil producing and exporting countries in the Middle East, Africa, and South America that have organized for the purpose of negotiating with oil companies on matters of oil production, prices, and future concession rights. OPEC was created in 1960.
OUTER CONTINENTAL SHELF (OCS) - All submerged lands seaward and outside the area of lands beneath navigable waters. Lands beneath navigable waters are interpreted as extending from the coastline 3 nautical miles into the Atlantic Ocean, the Pacific Ocean, the Arctic Ocean, and the Gulf of Mexico excluding the coastal waters off Texas and western Florida. Lands beneath navigable waters are interpreted as extending from the coastline 3 marine leagues into the Gulf of Mexico off Texas and western Florida.