What’s in a Barrel: Energy Company Production Terminology

Energy companies talk about production in terms that can seem big and abstract – thousands of barrels per day, billions of cubic feet.

For example, Southwestern Energy Co. of Houston reported peak production of about 100 barrels per day from its test well in the Brown Dense.

Here’s a little context: At peak times, Murphy Oil Corp. of El Dorado can gather more than 50,000 barrels of oil per day from its 19 producing wells in the Malaysian Kikeh field. A barrel is the international standard for oil, and it equals 42 gallons of crude oil. A 42-gallon barrel can be refined into about 44 gallons of petroleum products. Last week, one barrel was worth $86.68, down from nearly $110 as recently as February.

When energy companies talk about cubic feet, it’s a measure of natural gas. Southwestern was drawing an average of 2.2 billion cubic feet of gas from the Fayetteville Shale during its first 2012 quarter, and has extracted about 2 trillion cubic feet total over its eight years in the shale play. Currently, natural gas prices are hovering around $2.50 per thousand cubic feet, far lower than their high near $11 in 2008.

Ed Ratchford, senior petroleum geologist at the Arkansas Geological Survey, said he expected some gas production along with the oil from the Brown Dense wells.

"We have seen that historically in south Arkansas," he said. "It’s what we call ‘associated gas’ with the oil, but the principle commodity for this play is the oil itself. Our nation has an abundance of natural gas resources right now."