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Definitions

BBL Barrel of oil
A unit of volume for crude oil and petroleum products. Oil production is often given in numbers of barrels per day. One barrel of oil = 159 litres

BOE Barrel of oil equivalent
A unit of energy based on the approximate energy released when burning a single barrel of crude oil. The BOE is used by oil and gas companies as a way of combining oil and natural gas reserves and production into a single measure. Roughly equivalent to 5,800 cubic feet of natural gas or 1,700 kWh.

BOPD
Barrels of Oil per Day

API gravity
A measure developed by the American Petroleum Institute (API) of how heavy or light a petroleum liquid is compared to water. If its API gravity is greater than 10, it is lighter and floats on water, if less than 10, it is heavier and sinks. The measure was designed so that most values would fall between 10° and 70° API gravity. As an example Brent is a light crude and has a gravity of 38,06° API.

Appraisal well
A well drilled as a part of an appraisal drilling program which is carried out to determine the physical extent, reserves and likely production rate of a field.

Block
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. (Also referred to as Concession(s) or Licence(s)).

Blowout
Uncontrolled release of oil, gas or water from an oil well.

Brent
A reference oil for the various types of oil in the North Sea, used as a basis for pricing. API gravity of around 38°. West Texas Intermediate (WTI) and Dubai are other reference oils.

Concession
Agreement entered into with a host country granting the company the right to explore and produce oil and gas in a designated area, in return for paying to the government license fees and royalties on production. (Also referred to as Block(s) or Licence(s)).

Condensate
A low-density mixture of hydrocarbon liquids that are present as gaseous components in the raw natural gas produced from many natural gas fields. Its presence as a liquid depends on temperature and pressure conditions in the reservoir allowing condensation of liquid from vapor.

Cost oil
A share of oil produced used to cover ongoing operations costs and to recover past exploration, appraisal and development expenditures.

Crude oil
The oil produced from a reservoir, after the gas is removed in separation. Crude oil is a fossil fuel formed by plant and animal matter several million years ago.

Development well
A well drilled in a proven producing area for the production of oil or gas.

Downstream
The part of oil industry that include refining and distribution of oil as fuel, heating oil or as raw material for the petrochemical industy.

Dry hole
Any exploratory or development well that does not find commercial quantities of hydrocarbons.

EPSA
Exploration and Production Sharing Agreement

Exploration well
Drilling carried out to determine whether hydrocarbons are present in a particular area or structure.

Fault
A fracture within rock structures where relative motion has occurred across the fracture surface.

Farm out/ farm in
The holder of shares in an oil licence may transfer (farm out) shares to another company in exchange for this company taking over some of the work commitments in the licence, such as paying for a drilling or a seismic investigation within a certain period. In return, the company brought in receives a share in any future revenues. If the conditions are met the company may retain the licence shares if not the shares are taken back by the original holder. This is known as ”farm-in” and ”farm-out”.

Fracturing
Propagation of fractures in a rock layer by a pumping fluid at very high pressure.

Heavy oil
Heavy crude oil is any type of crude oil which does not flow easily. It is referred to as “heavy” because its density or specific gravity is higher than that of light crude oil. Heavy crude oil has been defined as any liquid petroleum with an API gravity less than 20°. It is therefore more difficult to produce than lighter oil and its combustion is more polluting.

Hydrocarbons
Naturally occurring organic substances composed of hydrogen (H) and carbon (C). If an occurrence primarily contains light hydrocarbons, they are most often in gas form in the reservoir, and are then called a gas field. If it is primarily heavy hydrocarbons, they are in liquid form in the reservoir, and called an oil field. Under certain conditions both can exist in the reservoir where a gas cap lies above the oil. Oil always contains a certain element of light hydrocarbons that are freed in production, also known as associated gas.

HSE
Health, Safety and Environment

Injection wells
Wells to be used for injection of fluids into reservoir for enhancement of hydrocarbon recovery. By injecting gas or water (or both) the degree of recovery can be increased.

Leads
Leads are possible accumulations of hydrocarbons where more geological data needs to be gathered and evaluations need to be performed before they can be called prospects, where drilling is considered to be feasible.

License
A permit to search for and produce oil and gas. Oil and natural gas assets are usually owned by the country in which the accumulation is discovered. The oil companies obtain permission from the respective country’s government to explore for and extract oil and natural gas. These permits can be called concessions, permits, production sharing agreements or licenses depending on the country in question. A license usually consists of two parts: an exploration permit and a production license.

Logs
The result of surveys which gather information from the wellbore and surrounding formations which typically consist of traces and curves. These can be interpreted to give information about oil, gas and water.

Onshore
Designation for operations on land.

Offshore
Designation for operations at sea.

Operator
The member of a joint venture, designated to lead the work on an oil or gas license or field. The company needs approval from the authorities in the country.

Porosity
The porosity of a rock is determined by measuring the amount of cavities inside, and determining what percentage of the total volume that consists of cavities.

Profit oil
The remaining share of oil produced after royalties have been paid and cost recovery has been deducted. The profit oil is shared according to the production sharing agreement and working interests.

Prospect
A geographical area which exploration has shown contains sedimentary rocks and structures that may be favourable for the presence of oil or gas.

PSA
Production Sharing Agreement

Reserves and resources

Reservoir
An accumulation of oil or gas in a porous type of rock with good porosity, such as sandstone or limestone.

Seismic data
Seismic investigations are made to be able to describe geological structures in the bedrock. A source, such as a vibrator, unit, dynamite, shot or an air gun generates acoustic or elastic vibrations that are transmitted from the ocean surface or the surface of the ground. The echoes are captured by special measurement instruments and analysed to localise occurrences of hydrocarbons.

Spud
To initiate drilling.

Sandstone
Sandstone is a sedimentary rock composed mainly of sand-sized minerals or rock grains. Most sandstone is composed of quartz, but also often consists of feldspar, rock fragments, mica and numerous other mineral grains held together with silica or another type of cement. The relatively high porosity and permeability of sandstone makes it to a valuable rock in reservoirs.

Upstream
Operations in the oil industry which includes exploration and production of crude oil and natural gas.

WTI
West Texas Intermediate – the primary reference oil used as a basis for pricing of oil in North America. API gravity of around 39.6°

About Tethys Oil

Tethys Oil is a mid sized Swedish oil company with focus on onshore areas with known oil discoveries. Tethys Oil's core area is Oman, where the company holds 2P reserves of 21.4 mmbo and has an oil production of about 12,000 barrels per day from Blocks 3&4. Tethys Oil also has onshore exploration licences in Lithuania and France and some production in Lithuania. The head office is located in Stockholm and the company's shares are listed on Nasdaq Stockholm (TETY).