Natural gas production is measured in cubic feet. The term Mmcf, like the term oil, refers to one million cubic feet of gas.
FREMONT, CA: Natural gas and crude oil are substances found in the earth's crust made up of hydrocarbons. These organic raw materials are formed by compressing plant and animal remains in sedimentary rocks such as sandstone, limestone, and shale.
The sedimentary rock is a byproduct of ancient oceans and other water bodies. The decaying remains of animals and plants were integrated into the forming rock as layers of sediment were deposited on the ocean floor. After being exposed to specific temperature and pressure ranges deep within the earth's crust, the organic material eventually transforms into oil and gas.
Because gas and oil are less denser than water, they migrate toward the earth's surface through porous sedimentary rock. An oil and gas reservoir is formed when hydrocarbons are trapped beneath less porous cap rock. These oil and gas reservoirs are our primary crude oil and gas sources.
Drilling into the reservoir through the cap rock brings hydrocarbons to the surface.
Once the drill bit has penetrated the reservoir, a productive oil or gas well can be built, and the hydrocarbons pumped to the surface.
When drilling does not yield commercially viable quantities of hydrocarbons, the well is classified as a dry hole and is typically plugged and abandoned.
Upstream, midstream, and downstream are the three different oil and gas industry segments. Upstream companies, also known as exploration and production (E&P) firms, locate reservoirs and drill oil and gas wells. Midstream companies are in charge of transporting crude oil from wells to refineries, while downstream companies are in charge of refining and selling finished products. Drilling companies subcontract their services to oil and gas extraction companies. On well sites, well-servicing companies perform related construction and maintenance activities.
After a well is drilled, various activities are required to generate and sustain its production over time. Servicing activities include logging, cementing, casing, perforating, fracturing, and maintenance. Thus, oil drilling and oil servicing are two different business activities within the oil and gas industry.