This oil and gas glossary defines 62 terms that owners of mineral rights meet on leases, deeds, check stubs and regulator records, in plain English. Where a definition changes by state, it names the state, and where a deeper guide exists, the term links to it.
Definitions draw on the U.S. Energy Information Administration (EIA) glossary, state regulators and university sources listed at the end. Use this oil and gas glossary alongside your own documents, which control.
Ownership and interests: who owns what
Ownership terms describe which slice of the mineral rights you hold and what it lets you do.
Mineral rights
The EIA glossary defines mineral rights as ownership of the minerals beneath the surface with the right to remove them. For oil and gas, that usually means the right to lease, a bonus and a royalty.
OGM (oil, gas and minerals)
OGM is a common abbreviation for "oil, gas and other minerals", the phrase deeds and leases use for the mineral rights conveyed, reserved or leased. What "other minerals" covers depends on the wording and state law; in April 2026 the Supreme Court of Ohio held that a 1953 Ohio reservation written in mining language did not include oil and gas.
Split estate
A split estate exists when one party owns the surface and another owns the mineral rights. The Bureau of Land Management notes that the mineral rights often take precedence.
Severed mineral rights
Minerals are severed when a deed separates them from the surface, for example when a seller keeps them while selling the land, which Texas A&M AgriLife Extension calls a severance by reservation.
Executive right
The executive right is the right to negotiate and sign an oil and gas lease. In Texas, its holder owes non-participating royalty owners a duty of utmost good faith and fair dealing.
Working interest
A working interest pays the costs of drilling and operating a well and takes its share of production after royalties, per the EIA glossary. Owners who lease usually hold royalty instead.
Net revenue interest
Net revenue interest is the share of revenue an owner actually receives: a working interest minus the royalties it carries, or, for a royalty owner, the decimal on the check.
Overriding royalty interest (ORRI)
An overriding royalty is carved out of the working interest, on top of the landowner's royalty, and lasts only as long as that lease, per EIA. Compare it in mineral rights vs royalty interests.
Non-participating royalty interest (NPRI)
An NPRI is a share of production carved from the mineral estate with no right to lease and no bonus. The owner is paid only when oil or gas is produced.
Gross acres
Gross acres are the total acres in a tract or unit, however many owners share it.
Net mineral acre (NMA)
A net mineral acre is one full acre of mineral rights: gross acres × your fraction, so 160 × 1/4 = 40 NMA. See net mineral acres vs net royalty acres.
Net royalty acre (NRA)
A net royalty acre is a buyer's pricing unit that adjusts NMA to a 1/8 royalty: NMA × royalty ÷ 1/8. It is a convention, not a legal unit.
Decimal interest
Your decimal interest is your share of a well's production as a decimal. The Oklahoma Corporation Commission's 2022 booklet shows it: 40 NMA × 3/16 royalty ÷ 640-acre unit = 0.011719.
Correlative rights
Correlative rights are each owner's fair chance to produce its just and equitable share of a common pool, the wording of New Mexico rule 19.15.2.7 NMAC. Spacing rules exist partly to protect them.
Leasing: what your lease means
Leasing terms describe the deal you make when a company leases your mineral rights. Our oil and gas lease basics guide shows how the clauses fit together.
Lessor and lessee
The lessor is the owner of the mineral rights who grants the lease; the lessee is the oil company that takes it, as the Kansas Geological Survey puts it.
Lease bonus
The bonus is the up-front payment for signing, usually quoted per net mineral acre. You keep it whether or not a well is drilled.
Primary term
The primary term is the period in which the lessee must drill or produce or lose the lease. The Kansas Geological Survey says it is usually five or 10 years.
Delay rental
A delay rental is an annual payment that kept an older lease alive during the primary term without drilling. Many modern leases are paid-up, with none.
Held by production (HBP)
A lease is held by production when it continues past the primary term because oil or gas is produced. One well can hold the whole lease unless a Pugh or depth clause limits it.
Shut-in royalty
A shut-in royalty is a payment that keeps a lease alive while a well that can produce is shut in, for example waiting on a pipeline. Your lease sets the amount and timing.
Pugh clause
A Pugh clause releases acreage outside a pooled unit or producing area, so one well cannot hold all your acreage. It is a vertical severance.
Depth clause
A depth clause releases the depths below the formations being produced. It is a horizontal severance that stops one shallow well holding every formation.
Surface use agreement
A surface use agreement sets where an operator's roads, pads and pipelines go and what damages it pays the surface owner. It matters most in a split estate.
Pooling
Pooling combines your lease with neighboring leases into one unit that meets state spacing rules, per the Texas Real Estate Research Center. See pooling and unitization.
Forced pooling
Forced pooling is a regulator's order bringing owners who have not agreed into a unit. In Oklahoma, the Corporation Commission's order lets an owner participate in the well or take a bonus and royalty option.
Spacing unit
A spacing unit is the area allocated to a well under a spacing order. In Oklahoma, only one well can initially be drilled in it, and its royalty owners share production.
Unitization
Unitization combines many leases, often a whole reservoir, under one operator, usually for a waterflood or enhanced recovery. The share of owners who must agree varies by state.
Drilling and production: where your well stands
Drilling and production terms track a well from permit to plugging.
Operator
The operator is the company with legal authority to drill and produce, per the glossary of Colorado's Energy and Carbon Management Commission (ECMC). It usually pays the royalty owners.
Permit
A drilling permit is the regulator's approval for one well at one location. Oklahoma requires a Notice of Intention to Drill under Corporation Commission Rule 165:10-1-7(b); in Texas, the Railroad Commission issues permits.
API number
An API number is a well's unique ID under the American Petroleum Institute standard, starting with state and county codes. Use it on the state regulator's site.
Spud date
The spud date is the day drilling begins, what Colorado's ECMC calls spud-in. A spud date near your mineral rights means the well is real.
Horizontal well
A horizontal well turns sideways through the target rock; EIA defines it as deviating more than 80 degrees from vertical. One can drain several tracts.
Lateral
The lateral is the horizontal section of a horizontal well. Its path helps decide whose mineral rights share in the well.
Frac (hydraulic fracturing)
A frac pumps fluid and a proppant into rock at high pressure to create fractures the proppant holds open, per EIA. Water is the most common fluid.
Completion
Completion turns a drilled hole into a producing well, ending with permanent wellhead equipment, per Colorado's ECMC.
First production
First production is the first month a well's output is sold. In Texas, Natural Resources Code section 91.402 (checked October 2026) requires payment within 120 days after the end of that month.
Decline curve
A decline curve graphs a well's production falling over time. Buyers project royalty income from the curve, not from your first checks.
Stripper well
A stripper well produces at low rates: EIA's glossary says usually 5 to 15 barrels of oil a day, or under 60 Mcf of gas. Federal tax law (26 U.S.C. 613A) uses 15 barrel equivalents or less per well per day.
Enhanced oil recovery (EOR)
Enhanced oil recovery injects heat, gas or chemicals to recover oil left after primary and secondary recovery. The U.S. Department of Energy (checked October 2026) puts primary recovery at about 10 percent of original oil, and EOR prospects at 30 to 60 percent.
Saltwater disposal well (SWD)
A saltwater disposal well injects brine produced with oil and gas back underground. The EPA classes it as a Class II injection well.
Plugged and abandoned (P&A)
A plugged and abandoned well has been sealed under state rules and will not produce again, so its royalties stop.
Mcf
Mcf is one thousand cubic feet of gas, per EIA; MMcf is one million.
BOE
BOE means barrels of oil equivalent, adding oil and gas into one figure. Check the gas conversion ratio before comparing reports.
NGLs (natural gas liquids)
NGLs are ethane, propane, butane and natural gasoline separated from gas, per EIA. Statements often list them separately.
Condensate
Condensate is light liquid recovered from gas at the lease, which EIA notes normally enters the crude oil stream.
Residue gas
Residue gas is the gas left after a processing plant removes the liquids, per EIA, delivered for sale at the plant tailgate.
Payments and taxes: how production becomes a check
Payment and tax terms explain how production becomes a check and what comes off it first.
Royalty
A royalty is your share of production or proceeds, normally free of drilling and operating costs but not production taxes, per EIA. See oil and gas royalties.
Division order
A division order states the percentage of royalty you own and is how the company pays you, in the Oklahoma Corporation Commission's words. See how to read a royalty check.
Suspense
Suspense is royalty the operator holds instead of paying, often over a title question or missing address. Texas Natural Resources Code section 91.402 lets payors withhold without interest during a title dispute.
Take or pay
Take or pay is a gas purchase contract term: the buyer, typically a pipeline, pays for a minimum volume whether it takes the gas or not. EIA notes take-or-pay percentages in contracts from before the Natural Gas Policy Act of 1978 exceeded 80 percent on average.
Post-production costs
Post-production costs make oil or gas marketable and move it to market. Whether they come off your royalty depends on the lease wording and state law.
Severance tax
Severance tax is a state tax on production. Texas charges 4.6 percent on oil and 7.5 percent on gas market value (Tax Code 202.052 and 201.052, checked October 2026). See severance tax by state.
Ad valorem tax
Ad valorem tax is a local property tax on the value of mineral rights in some states, including Texas. See ad valorem tax on mineral rights.
Depletion allowance
The depletion allowance is a federal tax deduction for using up a mineral property; 26 U.S.C. 613A lets royalty owners take 15 percent percentage depletion, within limits. See royalty income taxes.
Title and transfers: how mineral rights change hands
Title terms come up when an interest is inherited, sold or checked before a well pays. See how to transfer mineral rights.
Landman
A landman researches who owns the minerals in county records and negotiates leases. Texas A&M AgriLife Extension notes owners can hire one too.
Runsheet
A runsheet is a landman's dated list of every recorded document in a tract's chain of title.
Title opinion
A title opinion is an attorney's written opinion of who owns the mineral rights in a tract and in what shares. Operators set each owner's decimal from it.
Mineral deed
A mineral deed transfers mineral rights, normally including the right to lease, bonus and royalty.
Royalty deed
A royalty deed transfers only a share of royalty, with no right to lease or collect bonus.
Transfer order
A transfer order tells the operator an interest changed hands so it pays the new owner, usually with the recorded deed or probate papers.
Affidavit of heirship
An affidavit of heirship is a recorded sworn statement of a deceased owner's heirs. In Texas, Estates Code section 203.001 makes it prima facie evidence after five years in the deed records. See inherited mineral rights in Texas.
Dormant mineral act
A dormant mineral act lets unused severed minerals pass to the surface owner. Under Ohio Revised Code 5301.56, an interest can be deemed abandoned if no savings event occurred in the prior 20 years. An oil and gas attorney can review any notice.
Using this oil and gas glossary when you sell
Most of these terms come back when you sell mineral rights. Buyers ask for your net mineral acres, decimal, lease terms and recent checks. GoSellMineralRights sends one request to up to three independent buyers active in your county, with no fees, no commissions and no obligation. Get free cash offers on your mineral rights.
This is general information, not legal or tax advice. Your deed, lease and state law control what your mineral rights include.