CHAPTER 7 Glossary of Key Bankruptcy, Oil and Gas Terms

• Jurisdiction: United States

CHAPTER 7 Glossary of Key Bankruptcy, Oil and Gas Terms³⁹⁹

Administrative Claims	Fees of court-authorized pro- fessionals, trustee's com- missions and claims of trade creditors and others for credit extended after bankruptcy fil- ing. Administrative Claims generally must be paid before any pre-petition unsecured creditors.
AMI (Area of Mutual Interest)	An agreement between or among parties by which the parties attempt to describe a geographical area within which they agree to share certain additional leases or other interests acquired by any of them in the future.
Automatic Stay	When a chapter 11 petition is filed, creditors are automati- cally prohibited from attempt- ing to collect their pre-petition claims from the debtor or pro- ceeding against property of the debtor without first obtaining permission from the bankrupt- cy court to do so.
APO	After payout of drilling expenses.
Barrel	A unit of volume measurement used for petroleum and its products (7.3 barrels = 1 ton; 6.29 barrels = 1 cubic meter).
Bbl	One barrel of oil; 1 barrel = 35 Imperial gallons (approx.), or 159 liters (approx.); 7.5 barrels = 1 ton (approx.); 6.29 barrels = 1 cubic meter.
Bcf	Billion cubic feet; 1 bcf = 0.83 million tons of oil equivalent.
Bcfe	Billion cubic feet equivalent.
Block	An acreage subdivision mea- suring approximately 10 x 20 kms, forming part of a quad- rant (e.g., Block 9/13 is the 13th block in Quadrant 9).
Boepd	Barrels of oil equivalent per day.
Bopd	Barrels of oil per day.
BPO	Before payout of drilling expenses.
Brent Price	A major index price used to price the majority of world- wide oil purchases. Brent crude is a blend of the U.K.'s two North Sea oils: Shell Oil Co.'s Brent-field crude and British Petroleum Co.'s Ninian-field crude. The term "Brent" is an acronym for the differing lay- ers of an oil field: Broom, Ran- noch, Etieve, Ness and Tarbat. In terms of crude oil indexes, investors follow one of two in- dexes: Brent oil or West Texas Intermediate (WTI) oil.
Cash Collateral	Cash and cash equivalents that serve as collateral for a secured creditor's claim. Included in this category is cash, bank de- posits, proceeds from the sale of assets, accounts receivable collections and rents.
Class of Creditors	Creditors are normally divided into classes in a plan of reorga- nization. The claims of general unsecured creditors are usually grouped together as one class, although there are on occasion sufficient distinctions among the general unsecured credi- tors so as to justify dividing them into two or more classes.
Condensate	Hydrocarbons that are in the gaseous state under reservoir conditions and that become liquid when temperature or pressure is reduced; a mix- ture of pentanes and higher hydrocarbons.
Confirmation	The approval by the bank- ruptcy court of a plan of reorganization.
Cramdown	Confirmation of a plan of re- organization over the objec- tion of a class of creditors or equity-holders. A cramdown can occur only if at least one class of creditors whose claims are adversely affected by the plan of reorganization vote to accept it. The bank- ruptcy court will cram down a plan of reorganization on a dissenting class only if it finds that the plan of reorganization does not discriminate unfairly against that class and it is fair and equitable as to that class.
Creditors' Committee	A representative group of un- secured creditors appointed by the Office of the U.S. Trustee which is the unsecured credi- tors' bargaining and negotiat- ing arm in a chapter 11 bank- ruptcy case.
Debtor	The entity undergoing reorga- nization, also called the "Debt- or-in-Possession" or "DIP" in most cases.
Delay Rental	A payment to a mineral-rights owner by a lessee during the primary term of an oil and gas lease for the privilege of delay- ing commercial development.
Development Well	A well drilled to a known pro- ducing formation in a previ- ously discovered field. The legal duty to drill development wells is sometimes expressly set out in the lease, but more often depends on the im- plied covenant of reasonable development.
Discharge	The release of claims against the debtor, which occurs upon confirmation of a plan of reorganization.
Disclosure Statement	When creditors vote on a plan of reorganization, they will receive the plan of reorgani- zation, a ballot and a disclo- sure statement. The disclosure statement is a fairly substan- tial document intended to give creditors sufficient informa- tion about the debtor and the plan of reorganization to per- mit them to make an informed judgment as to whether to vote for or against the plan of reor- ganization. The debtor cannot send the disclosure statement to creditors until it has been approved by the court after notice and a hearing.
Division Order	Instrument signed by owners of production by which they approve their proportional in- terest in a well or oil and gas lease.
Enhanced Oil Recovery	A process whereby oil is recovered by means other than the natural pressure in a reservoir.
Executive Right	The right to execute an oil and gas lease.
Executory Contracts	Contracts with obligations by both parties remaining under the contract, of...