Definitions |
| API | (American Petroleum Institute) gravity is a standard for expressing the density of liquid petroleum products. The higher the API gravity, the lighter the crude oil. |
| bitumen | is a tar-like form of crude oil, often found in deposits containing significant amounts of sand, that must be headed or diluted before it will flow, and that typically contains more sulphur, metals and heavier hydrocarbons than conventional crude oil. |
| butane or C4 | is extracted from NGLs and is used as a household fuel, refrigerant, and aerosol propellant and in the manufacture of synthetic rubber. |
| call option | is an option that gives the holder the right to buy a certain quantity of a commodity at a specified price within a specific term. |
| collar | is a combination of put and call options which limits both dowside and upside exposure. |
| condensate or C5 | is a mixture of hydrocarbons consisting primarily of pentanes and heavier liquids extracted from natural gas. Condensate is used as a diluent to blend with heavy oil or bitumen. |
| crude oil | is a naturally occurring liquid mixture of hydrocarbons trapped in underground rock. |
| diluent | means a lower density fluid used to blend with heavy oil or bitumen to reduce viscosity and density. Condensate is the most commonly used diluent for pipeline transportation of heavy oil or bitumen. |
| ethane or C2 | is extracted from NGLs and used by the petrochemical industry for the manufacture of ethylene. |
| extraction | in the NGL extraction industry, refers to the process of removing NGLs, such as ethane, propane, butane and pentane-plus from the natural gas stream. The extracted liquids are generally removed in mixes, which must be further processed in subsequent steps to separate the individual products. |
| fixed for floating swap | is an agreement between two parties in which one party pays or receives a fixed rate, while the other pays or receives a floating rate on a certain quantity of a commodity. |
| frac spread | A measure of commodity prices of oil to gas ratio expressed as C$WTI/C$AECO. Relevant to the Midstream business unit. |
| fractionation or fractionate | refers to the context of the NGL extraction industry, the process of using temperature and pressure to separate a mixture of NGL with differing boiling points into individual products such as ethane, propane and butane. |
| heavy crude oil | has an API gravity of less than 20 API degrees. It is dark or black and flows like molasses. |
| hedging | refers to derivative contracts entered into to mitigate the effects of commodity price volatility on cash flow. |
| light crude oil | has an API gravity of greater than 40 API degrees. It is light in colour and flows like water. Light crude oil has a high evaporation rate and is usually flammable. Light crude oil is an ideal feedstock for a refinery. |
| liquefied natural gas (LNG) | is supercooled natural gas that is maintained as a liquid at or below -160C. LNG in this state occupies 1/640th of its original volumes and is therefore easier to transport if pipelines cannot be used. |
| medium crude oil | is denser than light crude oil, with an API gravity of 20 to 40 API degrees. It does not flow as easily as light crude oil. |
| midstream | is the processing, storage and transportation sector of the petroleum industry. |
| natural gas liquids (NGL) | are obtained during natural gas production and processing; they include ethane, propane, butane and condensate. |
| participating swap | is an agreement between two parties in which Provident sells a certain quantity of a commodity at a floor price and participates on a percentage basis when the market price exceeds the floor price. |
| propane or C3 | is extracted from NGLs and used in a number of applications, including residential heating, crop drying, automotive fuels and for petrochemicals. |
| propane-plus | collectivley refers to propane, butane and condensate |
| put option | is an option that give the holder the right to sell a certain quantity of commodity at a specified price within a specified term. |
| recycle ratio | equals operating income (field netback) divided by finding, development and acquisition (FD&A) costs. This is a common way to measure the value created for every dollar invested in the upstream industry |
| shallow gas | is natural gas produced from formations within 3,000 feet (900 metres) of the earth’s surface. |
| straddle plants | are extraction plants located near or on a gas transmission line. The natural gas liquids (NGLs) are extracted from the natural gas before re-injecting the natural gas into the pipeline. |
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