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Glossary – Concepts and measurements related to the oil industry
A country’s exploration and production area is divided into different geographical blocks. An agreement is entered into with a host country granting the company the right to explore and produce oil and gas in the designated area, in return for paying to the government licence fees and royalties on production.
Identification and investigation of areas that may contain oil or natural gas reserves.
Farm-in means that a company reaches an agreement with another company concerning the financing of part or all of the other company’s project in return for a participating interest in the project.
Farm-out means that a company reaches an agreement with a partner that bears the cost of part or all of a project in return for a participating interest in the project.
Thousand barrels of oil equivalents/Million barrels of oil equivalents.
Designation for operations on land.
Designation for operations at sea.
A company that has the right to explore for oil in an area and to pursue production at an oil discovery. Small operators often let other companies buy working interests in their rights to reduce the risk and share costs.
An area of exploration in which hydrocarbons have been predicted to exist in economic quantity.
Oil assets are divided into reserves and resources. The difference is in how far the oil company has come in working with the licence, whether the discoveries are of a commercial nature, etc. In short, resources are considered reserves when they are deemed commercially recoverable and a development plan has been approved by the local licencing authority. Reserves are divided into proved, probable, and possible. Resources are divided into contingent and prospective categories. Crown Energy calculates reserves and resources in accordance with the Society of Petroleum Engineers Petroleum Resources Management System of 2007.
An accumulation of oil or gas in a porous type of rock with good porosity, such as sandstone or limestone.
Seismic investigations are made to be able to describe geological structures in the bedrock. Sonar signals are transmitted from the ocean surface or the surface of the ground (pings), and the echoes are captured by special measurement instruments. Used to localise occurrences of hydrocarbons.