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== Appendix == === Cost of equity === {| class="wikitable" |+Cost of equity !Input !Input value !Additional information |- |Risk-free rate (%) |4.297% |Here, the risk free rate is the US 30 year treasury bond, and is calculated as at 3rd September 2023. Research suggests that for the risk-free rate, it's best to use one that has the same or similar maturity to the estimated remaining lifespan of the company. Here, we have assumed that the estimated lifespan of the company is 30 years years or longer, so we have used the longest maturity, which is 30 years. |- |Beta |0.5508 |Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more/most accurately predicts a future beta. |- |Equity risk premium (%) |7.98% |Research suggests that for the region of equity risk premium, it's best to use one that is the same or similar to the region of the beta market portfolio. Here, the region of the beta market portfolio is the world/global, so we have used the world/global region for the equity risk premium, and is calculated as at 5th January 2023. |- |Cost of equity (%) |8.69% |Cost of equity = Risk-free rate + Beta x Equity risk premium. |} === Relative valuation === As noted earlier in this report, research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach, so that's the approach that Stockhub suggests using to determine the estimated value of the company (the valuation based on the discounted cash flow approach can be found in the valuation section of this report); nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the relative valuation approach. ==== What's the expected return of an investment in Pantheon Resources using the relative valuation approach? ==== Stockhub estimates that the expected return of an investment in Pantheon Resources over the next 12-months is 185%. In other words, an £1,000 investment in the company is expected to return £2,849 in one year time. The assumptions used to estimate the return figure can be found in the table below. ==== What are the assumptions used to estimate the return figure? ==== ccc {| class="wikitable" |+Key inputs !Description !Value !Commentary |- |Which type of multiple do you want to use? |Price-to-book value |The price-to-book value is really the only available commonly used value, so we suggest using that. |- |In regards to the price-to-book value multiple, for the book value figure, which year to you want to use? |Year 1 |Research suggests that when using the relative valuation approach, it's best to use a time period of 12 months or less. Accordingly, for the book value figure, we suggest using Year 1, which is on 12th September 2024. |- |In regards to the price-to-book value multipl, what multiple figure do you want to use? |1.54x |Here, we suggest using a multiple of 1.54x, which is in-line with the multiples of Pantheon Resources's peers (for details on the peers can be found in the table below). |- |What is the estimated compound annual growth rate of the book value between one year from now and the most recent value? |46.37% |One year from now is 12th September 2024, and the most recent book value date is 31st December 2022. For simplicity, we based the estimate on the CAGR of Pantheon Resources over the last five years, which is 46.37%. The most recent value is $248,178,354 (as at 31st December 2022). |- |What's the current market capitalisation of the company? |£205.44 million |As at 12th September 2023, the market capitalisation of Pantheon Resources Plc is £205.44 million. |- |Which time period do you want to use to estimate the expected return? |Between now and one year time |Research suggests that when using the relative valuation approach, it's best to estimate the expected return of the company between now and one year time. |- |What's the FX rate? |$1.25 |The current FX rate of GBPUSD is $1.25. |} {| class="wikitable" |+Peers analysis ! !Market capitalisation (local) !Cash !Debt !Enterprise value !Proved reserves !Probable reserves !Possible reserves !EV/Proved Reserves !EV/Proved + Probable Reserves !EV/Proved + Probable + Possible Reserves |- |Pantheon Resources Plc | | | | | | | | | | |- |88 Energy Limited | | | | | | | | | | |- |Brookside Energy Limited | | | | | | | | | | |- |Diversified Gas & Oil PLC | | | | | | | | | | |- |ConocoPhillips | | | | | | | | | | |} {| class="wikitable" |+Local peers - BICS Best Fit (Algorithm) !Name !Ticker !2Y Corr !Mkt Cap (USD) !BF P/E !BF EV/EBITDA !BF EV/EBIT !BF EV/Rev !LF P/BV |- |Pantheon Resources PLC |PANR LN | |248763255.1 | -- | -- | -- | -- |0.8599 |- |EnQuest PLC |ENQ LN |0.2638 |342484769.1 |1.3755 |1.4467 |2.0561 |0.9302 |0.7375 |- |Harbour Energy PLC |HBR LN |0.2596 |2362103778 |6.4952 |0.9316 |1.8074 |0.6763 |1.6824 |- |Serica Energy PLC |SQZ LN |0.223 |1227222775 | -- | -- | -- | -- |1.7056 |- |Gulf Keystone Petroleum Ltd |GKP LN |0.2189 |250637412.4 |2.1706 |0.9949 |1.756 |0.6632 |0.453 |- |OKEA ASA |OKEA NO |0.2091 |372011265.3 |3.0588 |0.3939 |0.5296 |0.2736 |1.8361 |- |BLUENORD ASA |BNOR NO |0.2079 |1243069610 |7.3107 |2.866 |3.71 |1.9001 |1.7456 |- |Tullow Oil PLC |TLW LN |0.1981 |666476192.9 |2.2878 |2.685 |3.7652 |2.0689 | -- |- |DNO ASA |DNO NO |0.1976 |921463861.7 |5.3441 |1.3689 |1.9461 |0.8614 |0.7003 |- |Genel Energy Plc |GENL LN |0.1923 |287304379.2 |0.4852 |1.2792 |9.3474 |0.8072 |0.6281 |- |Capricorn Energy PLC |CNE LN |0.0962 |283070688.1 | -- | -- | -- | -- |0.2424 |- | colspan="3" |Mean (Including PANR LN) |745873453.2 |4.0061 |1.4958 |3.1147 |1.0226 |1.0214 |- | colspan="4" |Current Premium to Comps Mean | -- | -- | -- | -- | -15.8058 |} {| class="wikitable" |+North America peers - BICS Best Fit (Algorithm) !Name !Ticker !2Y Corr !Mkt Cap (USD) !BF P/E !BF EV/EBITDA !BF EV/EBIT !BF EV/Rev !LF P/BV |- |Pantheon Resources PLC |PANR LN | |249401660.5 | -- | -- | -- | -- |0.8621 |- |Bonterra Energy Corp |BNE CN |0.2145 |201202900.1 |5.7932 | -- | -- |5.3528 |0.5485 |- |Canacol Energy Ltd |CNE CN |0.2055 |291229291.5 |4.4749 |3.991 |6.2457 |2.7131 |0.8688 |- |Journey Energy Inc |JOY CN |0.1826 |250649018.6 |10.0903 |3.2022 | -- | -- |1.1123 |- |Gran Tierra Energy Inc |GTE US |0.1772 |242916614 |3.0209 |1.6716 |2.4108 |1.0112 |0.5344 |- |Reconnaissance Energy Africa L |RECO CN |0.1628 |201636539 | -- | -- | -- | -- |3.7743 |- |Evolution Petroleum Corp |EPM US |0.1535 |298752800.3 |9.5026 |5.339 |5.8633 |2.5077 |3.1245 |- |Alvopetro Energy Ltd/CA |ALV CN |0.149 |258641189.1 |5.3166 | -- |5.022 |3.4221 |2.8451 |- |Amplify Energy Corp |AMPY US |0.1002 |277732974.3 |1.8069 |4.1816 |6.8549 |1.2493 |0.7737 |- |CGX Energy Inc |OYL CN |0.099 |239180966.5 | -- | -- | -- | -- |4.342 |- |Global Tech Industries Group I |GTII US |0.0407 |290690567.5 | -- | -- | -- | -- |24.9919 |- |Mean | | |254730411.1 |4.407 |3.991 |5.6339 |2.3821 |1.4639 |- |Current Premium to Comps Mean | | | | -- | -- | -- | -- | -41.1063 |} {| class="wikitable" |+Global peers - Global Industry Classification Standard !Name !Ticker !2Y Corr !Mkt Cap (USD) !BF P/E !BF EV/EBITDA !BF EV/EBIT !BF EV/Rev !LF P/BV |- |Pantheon Resources PLC |PANR LN | |248743297.3 | -- | -- | -- | -- |0.8599 |- |Jadestone Energy PLC |JSE LN |0.2226 |256103808.5 |12.1425 |0.8699 |1.7002 |0.3279 |1.7301 |- |Gulf Keystone Petroleum Ltd |GKP LN |0.2189 |250617304.2 |2.1706 |0.9949 |1.756 |0.6632 |0.4529 |- |Genel Energy Plc |GENL LN |0.1924 |287281329.3 |0.4852 |1.2792 |9.3474 |0.8072 |0.6281 |- |Journey Energy Inc |JOY CN |0.1826 |250722843.5 |10.0903 |3.2022 | -- | -- |1.1123 |- |Gran Tierra Energy Inc |GTE US |0.1772 |242916614 |3.0209 |1.6716 |2.4108 |1.0112 |0.5344 |- |Alvopetro Energy Ltd/CA |ALV CN |0.149 |258717367.9 |5.3166 | -- |5.022 |3.4221 |2.8451 |- |Touchstone Exploration Inc |TXP CN |0.1276 |199349168.4 |16.338 |3.3236 |5.7614 |2.0963 |2.5903 |- |La Francaise De L'energie SACA |FDE FP |0.1153 |227020391.8 |11.7018 |7.3477 |9.0049 |4.3978 |2.8113 |- |Amplify Energy Corp |AMPY US |0.1002 |277732974.3 |1.8069 |4.1816 |6.8549 |1.2493 |0.7737 |- |CGX Energy Inc |OYL CN |0.099 |239251413.6 | -- | -- | -- | -- |4.342 |- |Capricorn Energy PLC |CNE LN |0.0962 |283047977.8 | -- | -- | -- | -- |0.2423 |- |Coelacanth Energy Inc |CEI CN |0.0954 |260548386.6 | -- | -- | -- | -- |3.7122 |- |Kistos Holdings PLC |KIST LN |0.0891 |253019056.7 | -- | -- | -- | -- |2.2992 |- |Cohen Development Gas & Oil Lt |CDEV IT |0.0795 |211048552.1 | -- | -- | -- | -- |6.5187 |- |Hindustan Oil Exploration Co L |HOE IN |0.0428 |255827680.6 | -- | -- | -- | -- |2.2394 |- | colspan="3" |Mean (Including PANR LN) |250121760.4 |9.0748 |2.7631 |5.3661 |2.0603 |1.4934 |- | colspan="4" |Current Premium to Comps Mean | -- | -- | -- | -- | -42.4215 |} {| class="wikitable" |+North America - Global Industry Classification Standard !Name !Ticker !2Y Corr !Mkt Cap (USD) !BF P/E !BF EV/EBITDA !BF EV/EBIT !BF EV/Rev !LF P/BV |- |Pantheon Resources PLC |PANR LN | |248743297.3 | -- | -- | -- | -- |0.8599 |- |Saturn Oil & Gas Inc |SOIL CN |0.2403 |289188348.4 |1.6041 |0.8074 | -- |0.6336 |0.6728 |- |Bonterra Energy Corp |BNE CN |0.2145 |201232526.3 |5.7932 | -- | -- |5.3528 |0.5485 |- |Canacol Energy Ltd |CNE CN |0.2055 |291272173.8 |4.4749 |3.991 |6.2457 |2.7131 |0.8688 |- |Journey Energy Inc |JOY CN |0.1826 |250685925.6 |10.0903 |3.2022 | -- | -- |1.1123 |- |Gran Tierra Energy Inc |GTE US |0.1772 |242916614 |3.0209 |1.6716 |2.4108 |1.0112 |0.5344 |- |Reconnaissance Energy Africa L |RECO CN |0.1628 |201666229.1 | -- | -- | -- | -- |3.7743 |- |Evolution Petroleum Corp |EPM US |0.1535 |298752800.3 |9.5026 |5.339 |5.8633 |2.5077 |3.1245 |- |Alvopetro Energy Ltd/CA |ALV CN |0.149 |258679272.9 |5.3166 | -- |5.022 |3.4221 |2.8451 |- |Lucero Energy Corp |LOU CN |0.132 |324574582.1 |6.5686 |2.2905 |4.647 |1.4365 |0.9152 |- |Touchstone Exploration Inc |TXP CN |0.1276 |199319815.1 |16.338 |3.3236 |5.7614 |2.0963 |2.5903 |- |Amplify Energy Corp |AMPY US |0.1002 |277732974.3 |1.8069 |4.1816 |6.8549 |1.2493 |0.7737 |- |CGX Energy Inc |OYL CN |0.099 |239216184.9 | -- | -- | -- | -- |4.342 |- |Coelacanth Energy Inc |CEI CN |0.0954 |260510022 | -- | -- | -- | -- |3.7122 |- |San Juan Basin Royalty Trust |SJT US |0.08 |309016317.5 | -- | -- | -- | -- |81.0503 |- |Empire Petroleum Corp |EP US |0.0627 |181790240 | -- | -- | -- | -- |9.6501 |- |Mean (Including PANR LN) | | |254706082.7 |8.384 |2.7073 |5.6339 |1.945 |1.5358 |- |Current Premium to Comps Mean | | | | -- | -- | -- | -- | -44.0125 |} ==== Sensitivity analysis ==== The main inputs that result in the greatest change in the expected return of the Pantheon Resources investment are, in order of importance (from highest to lowest): # The compound annual growth rate of the Pantheon Resources book value (the default figure is 46.37%); # The price-to-book value multiple (the default multiple 1.57x); and # Pantheon Resources most recent book value figure (the default figure is $248,178,354, or £198,542,683 at the current exchange rate of $1.25). The impact of a 50% change in those main inputs to the expected return of the Pantheon Resources investment is shown in the table below. {| class="wikitable sortable" |+Pantheon Resources investment expected return sensitivity analysis !Main input !50% worse !Unchanged !50% better |- |The compound annual growth rate of the Pantheon Resources book value between one year ahead and the most recent value |113% |185% |266% |- |The price-to-book value multiple |42% |185% |327% |- |Pantheon Resources most recent book value figure |42% |185% |327% |} === Significant holdings === {| class="wikitable" |+Significant holdings as of 15th June 2023<ref>As of 23 June 2022, CHONS LLC was the registered holder of 38,068,993 shares, representing 4.95% of the share capital of the Company. These shares were held through one or more nominees accounts which may or may not be wholly in the top shareholder list presented above. Pantheon has been advised by Farallon Capital Management LLC, the discretionary investment manager of CHONS LLC that it qualifies for an investment manager exemption pursuant to DTR 5.1.5 R (1)(a) in the FCA Rules. The practical effect of the investment manager exemption is that, where a person is acting as investment manager to another person, the applicable disclosure thresholds under the DTRs are only at 5%, 10% and 1% increments above 10%. Accordingly, the referenced shareholdings are subject to change without additional notification and therefore cannot be considered accurate apart from on the referenced date. On 3 August 2021, Mr Michael Spencer and IPGL Limited advised they were the registered holder of 25,888,710 shares representing 3.7% of the share capital of Pantheon on that date, and were the holder of 7,816,200 Financial instruments of similar economic effect, representing 1.13% of the registered share capital of Pantheon at that time. These shares were held through one or more nominees accounts which may or may not be wholly in the top shareholder list presented above. The referenced shareholdings are only considered accurate on the referenced data and are not expected to be updated until the next reporting threshold (higher or lower) is crossed. On 1 April 2022, Mr Sanjay Motwani notified of a direct holding in 3,271,788 ordinary shares and an indirect holding in 19,851,474 ordinary shares, collectively representing 3.05% of the share capital of Pantheon on that date. These shares were held through one or more nominees accounts which may or may not be wholly in the top shareholder list presented above. The referenced shareholding(s) are only considered accurate on the referenced data and are not expected to be updated until the next reporting threshold (higher or lower) is crossed. </ref><ref>https://www.pantheonresources.com/investors/significant-holdings</ref> ! !Number of Ordinary Shares !% of Share Capital |- |Vidacos Nominees Limited |100,084,318 |11.34 |- |Interactive Brokers LLC |80,121,067 |9.08 |- |Lynchwood Nominees Limited |67,134,041 |7.60 |- |Vidacos Nominees Limited |38,521,840 |4.36 |- |Vidacos Nominees Limited |34,549,659 |3.91 |- |Barnard Nominees Limited |29,352,283 |3.32 |- |Barnard Nominees Limited |27,714,204 |3.14 |} === Capital structure === The Company has 919,111,769 ordinary fully paid shares in issue.<ref name=":12" /> The number of ordinary shares not in public hands amounts to 6,956,691<ref name=":5">https://www.pantheonresources.com/investors/capital-structure</ref>, equivalent to 0.76% of the issued allotted and fully paid ordinary shares.<ref>The calculation here is 6,956,691 divided by 919,111,769.</ref> ==== Share options ==== {| class="wikitable" |+Share options<ref name=":5" /> !Exercise price (£) !Number of share options exercisable into ordinary shares on issue !Expiry Date !Share options as a % of issued shares |- |0.30 |4,825,000 |30 September 2024 |0.62% |- |0.27 |7,000,000 |6 July 2030 |0.90% |- |0.33 |12,430,000 |27 January 2031 |1.60% |- |0.671 |21,705,000 |18 January 2027 |2.80% |} ==== Share warrants ==== {| class="wikitable" |+Share warrants<ref>The share options are exercisable into ordinary shares upon exercise, whereas the warrants are convertible on a 1:1 basis into non-voting shares upon exercise. Non voting shares are further convertible into ordinary shares on a 1:1 basis. The Ordinary Shares of the Company have not been nor will they be registered under the United States Securities Act of 1933, as amended ("Securities Act"), or under the securities laws of any state of the United States or under the applicable securities laws of Australia, the Republic of South Africa, the Republic of Ireland, Japan or Canada. Accordingly, subject to certain exceptions, the Ordinary Shares may not, directly or indirectly, be offered, sold, transferred, taken up or delivered, directly or indirectly, in the United States, Australia, the Republic of South Africa, the Republic of Ireland, Japan or Canada or for the benefit of any US person (as defined in Regulation S under the Securities Act).</ref><ref name=":5" /> !Exercise price (£) !Number of share warrants exercisable into non-voting shares !Expiry date !Share options as a % of issued shares |- |0.30 |4,803,921 |30 September 2024 |1.29% |} === Beta risk profile === {| class="wikitable" |+ !Beta value !Risk rating |- |style="background: green; color: white;" |0 to 0.50 |style="background: green; color: white;" | Low |- |style="background: orange; color: white;" | 0.50 to 1.50 |style="background: orange; color: white;" | Medium |- |style="background: red; color: white;" | 1.50 to 3.00 |style="background: red; color: white;" | High |- |style="background: purple; color: white;" | 3.00 and above |style="background: purple; color: white;" | Extremely high |} === Pantheon Resources beta calculation === {| class="wikitable" |+Pantheon Resources beta calculation !Date !iShares MSCI World ETF unit price (USD) !Pantheon Resources plc share price (GBP) !iShares MSCI World ETF unit price change (%) !Pantheon Resources plc share price change (%) |- |01/10/2018 |85.25 |16.24 | | |- |01/11/2018 |86.21 |17.1 |1% |5% |- |01/12/2018 |78.87 |16 | -9% | -6% |- |01/01/2019 |84.96 |23.375 |8% |46% |- |01/02/2019 |87.49 |24.75 |3% |6% |- |01/03/2019 |88.79 |28.6 |1% |16% |- |01/04/2019 |92.09 |21.425 |4% | -25% |- |01/05/2019 |86.76 |21.25 | -6% | -1% |- |01/06/2019 |91.02 |21.25 |5% |0% |- |01/07/2019 |91.86 |18.68 |1% | -12% |- |01/08/2019 |89.84 |17.9 | -2% | -4% |- |01/09/2019 |91.78 |16.03 |2% | -10% |- |01/10/2019 |94.12 |16.25 |3% |1% |- |01/11/2019 |96.76 |16.5 |3% |2% |- |01/12/2019 |98.78 |16.5 |2% |0% |- |01/01/2020 |97.73 |16.5 | -1% |0% |- |01/02/2020 |89.67 |11.95 | -8% | -28% |- |01/03/2020 |77.93 |13 | -13% |9% |- |01/04/2020 |86.36 |13.75 |11% |6% |- |01/05/2020 |90.7 |15.95 |5% |16% |- |01/06/2020 |92.14 |13.775 |2% | -14% |- |01/07/2020 |96.65 |21.15 |5% |54% |- |01/08/2020 |102.96 |22.35 |7% |6% |- |01/09/2020 |99.52 |37.2 | -3% |66% |- |01/10/2020 |96.53 |31 | -3% | -17% |- |01/11/2020 |108.94 |37.4 |13% |21% |- |01/12/2020 |112.41 |43.5 |3% |16% |- |01/01/2021 |111.49 |36.3 | -1% | -17% |- |01/02/2021 |114.27 |39.1 |2% |8% |- |01/03/2021 |118.49 |35.7 |4% | -9% |- |01/04/2021 |123.61 |34.25 |4% | -4% |- |01/05/2021 |125.6 |29.4 |2% | -14% |- |01/06/2021 |126.57 |41.25 |1% |40% |- |01/07/2021 |128.83 |55.3 |2% |34% |- |01/08/2021 |132.02 |59.7 |2% |8% |- |01/09/2021 |126.46 |71.6 | -4% |20% |- |01/10/2021 |133.84 |77.6 |6% |8% |- |01/11/2021 |131.1 |69.6 | -2% | -10% |- |01/12/2021 |135.32 |77.3 |3% |11% |- |01/01/2022 |128.32 |79.6 | -5% |3% |- |01/02/2022 |124.58 |142 | -3% |78% |- |01/03/2022 |128.16 |117.6 |3% | -17% |- |01/04/2022 |117.42 |123.2 | -8% |5% |- |01/05/2022 |117.94 |100.6 |0% | -18% |- |01/06/2022 |106.88 |89.4 | -9% | -11% |- |01/07/2022 |115.57 |117 |8% |31% |- |01/08/2022 |110.28 |133.7 | -5% |14% |- |01/09/2022 |99.95 |104.1 | -9% | -22% |- |01/10/2022 |107.42 |100.1 |7% | -4% |- |01/11/2022 |115.44 |72.95 |7% | -27% |- |01/12/2022 |109.25 |42.52 | -5% | -42% |- |01/01/2023 |117.01 |50.15 |7% |18% |- |01/02/2023 |113.98 |57.1 | -3% |14% |- |01/03/2023 |117.67 |23.64 |3% | -59% |- |01/04/2023 |119.79 |18.67 |2% | -21% |- |01/05/2023 |118.6 |15.74 | -1% | -16% |- |01/06/2023 |124.52 |12.71 |5% | -19% |- |01/07/2023 |128.54 |10.8 |3% | -15% |- |01/08/2023 |125.7 |25 | -2% |131% |- |01/09/2023 |125.91 |22.42 |0% | -10% |} {| class="wikitable" |+Pantheon Resources beta and adjusted beta ! !Pantheon Resources |- |Beta |0.3262 |- |Adjusted beta |0.5508 |} === Glossary === ccc {| class="wikitable" |+Glossary !Term !Definition |- |/Net pay |The net thickness of an <abbr>oil</abbr> <abbr>reservoir</abbr> which is capable of producing <abbr>hydrocarbons</abbr>. |- |AMI |Area of mutual interest. |- |Anticline |A <abbr>structure</abbr> in the subsurface in which rock layers have been folded to produce an arch or dome. |- |Appraisal well |A well drilled to evaluate the extent of a discovery made by a previous well drilled on the same <abbr>trap</abbr>. |- |Barrel (BBL) |A unit of measurement commonly used in quoting liquid hydrocarbon volumes. * 1 barrel _ 42 U.S. gallons * 35 imperial gallons (approx) * 159 liters (approx) |- |Basin |A depression in the earth's surface containing relatively thick deposits of sedimentary rocks. |- |BCF |Billion cubic feet, or 28.317 cubic meters. A unit commonly used in quoting volumes of natural gas. |- |BCFG |Billion cubic feet of gas. |- |Behind pipe |A productive <abbr>reservoir</abbr> which is isolated from the well bore by the <abbr>casing</abbr>. |- |BHL |Bottom hole location. |- |BO |Barrel of <abbr>oil</abbr>. |- |BOE |Barrel of <abbr>oil</abbr> equivalent. Used when converting oil and gas into an equivalent unit of volume. Typically, a figure of 6000 <abbr>CFG</abbr> per BBLO is used. |- |BOPD |Barrels of <abbr>oil</abbr> per day, a unit commonly used to describe daily rates of liquids production from a flowing well. |- |BTU |British Thermal Unit. A unit index of energy content in gas. |- |Casing |Steel pipe which lines the well bore from surface. The <abbr>casing</abbr> isolates subsurface fluids from the well bore and prevents rock material from sloughing off the sides of the well bore. |- |CFG |Cubic feet of gas |- |Charge risk |A general term for <abbr>risk</abbr> that a source rock exists, that it has been is or still is generating <abbr>hydrocarbons</abbr>, that a <abbr>trap</abbr> was in place before generation , and that a conduit exists between the source rock and the <abbr>reservoir</abbr>. |- |Clastic |A modifier describing rocks that were deposited by the mechanical action of water, i.e., being carried in suspension and then dropped when the energy in the flow becomes too weak to support the material. Typically, <abbr>sandstone</abbr> and <abbr>shale</abbr>. |- |Closure |On an isolated structural high, the area enclosed by the lowest closing contour. |- |Condensate |A hydrocarbon phase which separates out from natural gas and condenses into liquids when the <abbr>hydrocarbons</abbr> are produced. |- |Cretaceous |Late Mesozoic time; roughly 140 to 65 million years ago. |- |Darcy |1000 millidarcies (see definition for <abbr>mD</abbr> below). |- |Deposition |The process of depositing unconsolidated <abbr>sediments</abbr>, usually in a <abbr>basin</abbr>. |- |DHC |<abbr>Dry hole</abbr> cost. The cost of an unsuccessful well. |- |Dip |The angle that a rock surface forms with respect to the horizontal. Can be referenced as degrees, in the case of depth, or, in the case of <abbr>seismic reflection</abbr> data, in time (e.g. milliseconds per km ). |- |Dipmeter |A tool used in logging a well which measures the <abbr>dip</abbr> of rock surfaces in the borehole of the well. |- |DMO |<abbr>Dip</abbr> Moveout . A correction applied to seismic trace processing to account for dip. (See dip above). |- |DOGGR |California Department of Conservation/Division of <abbr>Oil</abbr>, Gas, and Geothermal Resources |- |Dry hole |A well in which no commercial <abbr>hydrocarbons</abbr> were discovered. |- |Exploration well |A well drilled into a previously undrilled or noncommercial <abbr>trap</abbr> to test for the presence of a new hydrocarbon accumulation. |- |Facies |An association of rock types which share a common trait. In the case of sedimentary rocks, usually used with reference to the environment in which the <abbr>sediments</abbr> were deposited (for example, deltaic). |- |Fault |Any brittle failure of rock layers along which rocks are displaced on one side relative to the other. |- |Fault trap |A <abbr>structural trap</abbr> where at least one of the components of <abbr>closure</abbr> is formed by offset of rock layers across a <abbr>fault</abbr>. |- |Fold |Deformation of a rock surface. |- |Formation |A formal term used to reference a genetically related rock unit (e.g. the Monterey <abbr>Formation</abbr>). |- |Four way dip |A simple <abbr>structure</abbr> in which rock surfaces <abbr>dip</abbr> in all four directions, thus creating structural <abbr>closure</abbr>. Often forms a hydrocarbon <abbr>trap</abbr>. |- |Geology |The study of the earth and the processes affecting its crust. |- |Geophysics |The study of rock properties and <abbr>stratigraphy</abbr> through the use of analytical methods involving various types of data collection and interpretation. |- |GIP |Gas in place. The volume of natural gas stored in a subsurface accumulation . Differs from recoverable <abbr>reserves</abbr> in that some of this gas will not be recovered to the surface due to properties of the rock and/or gas, and in situ pressure. |- |GOR |Gas-<abbr>oil</abbr> ratio: the volume of dissolved gas per barrel of oil. |- |Horizon |A term describing a layer of rock, most typically associated with a <abbr>seismic reflection</abbr>. |- |Hydrocarbons |A compound of the elements hydrogen and carbon, in either liquid or gaseous form. Natural gas and <abbr>petroleum</abbr> are mixtures of <abbr>hydrocarbons</abbr>. |- |Lithology |The physical, sedimentary, or mineralogical characteristics of a rock. |- |Marine |Used as a modifier of sedimentary rock to denote <abbr>deposition</abbr> in the ocean. |- |Mature |Used in association with source rock. A description applied to organic rich rock which is capable, because of sufficient temperature and burial depth, of generating <abbr>hydrocarbons</abbr>. |- |mD |Millidarcy , a unit of measurement used to describe <abbr>permeability</abbr>, i.e., the tendency for liquids to flow through a rock unit. A high permeability indicates a good <abbr>reservoir</abbr>. |- |Migration |The movement of <abbr>hydrocarbons</abbr> from the source rock to the <abbr>reservoir</abbr>. |- |MMBLS |Million barrels. |- |MMBO |Million barrels of <abbr>oil</abbr>. |- |MMBTU |Million British Thermal Units. |- |MMCFD |Million cubic feet of gas per day. A measure of gas flow rates from a producing well. |- |Monte Carlo |A methodology for estimating a given quantity based on the statistical distribution of input values on which the quantity depends. Typically, the output quantity is calculated several thousand times (each calculation is called a trial), for each trial using input parameter values extracted randomly according to their statistical distributions. The result is a statistical distribution of output values. |- |MSCF |Thousand standard cubic feet at atmospheric conditions. |- |N/G |Net to gross ratio. The percentage of a gross thickness of <abbr>reservoir</abbr> with sufficient <abbr>permeability</abbr> such that it is capable of flowing <abbr>hydrocarbons</abbr>. |- |Oil |Liquid <abbr>hydrocarbons</abbr>, generally more viscous and darker in color than <abbr>condensates</abbr>. |- |oil field |A subsurface accumulation of <abbr>hydrocarbons</abbr>. |- |oil window |The depth interval in which source rock can actively generate mobile <abbr>oil</abbr>. |- |OIP |<abbr>Oil</abbr> in place. The volume of oil held in a <abbr>reservoir</abbr> in the subsurface . Not all of this oil can be recovered. |- |OWC |Oil-water contact, which marks the base of an <abbr>oil</abbr> accumulation. |- |P10 |In a <abbr>Monte Carlo</abbr> simulation, a measure of the high end expectation of a particular parameter's occurrence. For example, a <abbr>P10</abbr> net pay of 150 ft means that there is a 10 per cent. probability that at least 150 ft of net pay will be encountered in a given trial in the simulation. |- |P50 |In a <abbr>Monte Carlo</abbr> simulation, the median value of a particular parameter's occurrence. For example, a <abbr>P50</abbr> net pay of 50 ft means that half of the trials in the simulation encountered a value less than 50 ft. |- |P90 |In a <abbr>Monte Carlo</abbr> simulation, a measure of the low end expectation of a particular parameter's occurrence. For example, a <abbr>P90</abbr> net pay of 25 ft means that there is a 90 per cent. probability that at least 25 ft of net pay will be encountered in a given trial in the simulation. |- |Permeability |A measure of the ability of liquids to flow through a porous solid. (See <abbr>mD</abbr> ). |- |Petroleum |(See <abbr>Hydrocarbons</abbr>). |- |PINS |Padre Island National Seashore. |- |Pipeline |A pipe through which any hydrocarbon or its products is delivered to an end user. |- |Porosity |The percentage of open pore space in a rock. |- |POS |Probability of success (technical, as opposed to commercial). |- |Potentially Recoverable Hydrocarbons |The volume of <abbr>hydrocarbons</abbr> that are estimated to be producible from a given <abbr>trap</abbr>. Used in the context of a <abbr>prospect</abbr> or an undeveloped hydrocarbon accumulation. |- |Prospect |An undrilled or poorly understood, and therefore hypothetical, hydrocarbon <abbr>trap</abbr>. |- |PSDM |Pre-stack depth <abbr>migration</abbr>. A seismic processing technique which utilises rock velocity models to iteratively arrive at a depth converted seismic data volume. |- |PSTM |Pre-stack time <abbr>migration</abbr>. A seismic processing technique which approximates <abbr>PSDM</abbr> but does not build a depth model. The seismic data volume is in two way travel time. |- |Reflector |An event observed on a seismic section that usually corresponds to a buried rock surface. |- |Reserves |The volume of <abbr>oil</abbr> or gas that can be recovered from the subsurface. Generally used in the context of commerciality. |- |Reservoir |A porous rock unit in which <abbr>hydrocarbons</abbr> occur in an <abbr>oil</abbr> field. |- |Risk |A measure of uncertainty relating to the likelihood of finding <abbr>hydrocarbons</abbr>, or, the likelihood that any or all of the individual geological elements required for the accumulation of hydrocarbons is met. |- |Sandstone |A sedimentary rock composed primarily of sand sized grains, usually quartz. A common hydrocarbon <abbr>reservoir</abbr> rock. |- |SCF |Standard cubic feet. See <abbr>MSCF</abbr> |- |Seal |An impermeable rock unit that prevents <abbr>hydrocarbons</abbr> from escaping from the <abbr>reservoir</abbr>. |- |Sediment |Generally, water borne debris that settles out of suspension. |- |Sediment rock |A type of rock formed by aggregation of <abbr>sediments</abbr>. |- |Seismic reflection |An event observed on seismic data that corresponds to a given rock layer in the subsurface. |- |Seismic survey |A tool employing an energy source, such as dynamite, and recording devices used to measure the travel time from a rock layer to the surface. The primary tool used to detect hydrocarbon <abbr>traps</abbr>. |- |Shale |A very fine grained rock often thinly layered. An important <abbr>seal</abbr> rock. |- |Show |An indication while drilling that <abbr>hydrocarbons</abbr> are present in the well. |- |Silt/siltstone |A rock whose grain size is intermediate between sand and <abbr>shale</abbr>. |- |Source/source rock |An organic rich rock (typically <abbr>shale</abbr>) capable of generating <abbr>hydrocarbons</abbr> under certain conditions of temperature and pressure. |- |STB |Stock tank barrel, the volume of a barrel of <abbr>oil</abbr> at the earth's surface as opposed to the corresponding volume in the subsurface. |- |Stratigraphy |The study of the vertical and horizontal distribution of stratified rocks, with respect to their age, lateral equivalence, and environment of <abbr>deposition</abbr>. |- |Structural trap |Generally, a hydrocarbon <abbr>trap</abbr> formed by dipping rock layers and/or <abbr>faults</abbr>. |- |Structure |A geological feature usually higher in elevation than the surrounding rock, formed by local deformation of the rock layers. |- |TCF |Trillion cubic feet of gas. |- |Tertiary |A period of geological time from approximately 2 to 65 million years ago. Subdivided into the Pliocene, Miocene, Oligocene, Eocene, and Paleocene. |- |Total depth (TD) |The final depth reached when drilling a well. |- |Trap |A <abbr>structure</abbr> capable of retaining <abbr>hydrocarbons</abbr>. |- |Trend |A particular direction in which similar geological features are repeated. |- |TVD |True vertical depth. The vertical depth below a given datum. |- |Unconformity |A break in the succession of sedimentary <abbr>deposition</abbr>, commonly associated with erosion of underlying rock units. Often marked by rock surfaces which are non-parallel above and below the <abbr>unconformity</abbr>. |- |Unrisked |Associated with an estimate of possible <abbr>hydrocarbons</abbr> for which a discount attributable to <abbr>risk</abbr> has not been applied. |- |Updip |Toward a higher elevation on a rock surface. |- |Uplift |Elevation by means of geological activity of one surface or area relative to another. |- |Well log |A device which records rock physical parameters in the well bore during or after drilling, or, the data obtained by these devices. |}
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