Accrued interest – The interest due on a bond since the last interest payment was made. The buyer of the bond pays the market price plus accrued interest.
Acquisition – The acquiring of control of one corporation by another. In “unfriendly” takeover attempts, the potential buying company may offer a price well above current market values, new securities and other inducements to stockholders. The management of the subject company might ask for a better price or try to join up with a third company.
American Petroleum Institute – (API) An industry group representing more than 400 oil and gas firms operating in America. API is involved with equipment certification, research and development, industry statistics, standards and lobbying.
API Gravity – Is a commonly used standard for oil grading. The API gravity system is expressed in degrees, with 10° being equal to water. The higher the API gravity, the lighter the oil.
Annual report – The formal financial statement issued yearly by a corporation. The annual report shows assets, liabilities, revenues, expenses and earnings – how the company stood at the close of the business year, how it fared profit-wise during the year, as well as other information of interest to shareowners.
Ask – the price at which a dealer offers to sell.
Assay – a test to ascertain the fineness and weight of a precious metal.
Assets – Everything a corporation owns or that is due to it: cash, investments, money due it, materials and inventories, which are called current assets; buildings and machinery, which are known as fixed assets; and patents and goodwill, called intangible assets. (See: Liabilities)
Auditor’s report – Often called the accountant’s opinion, it is the statement of the accounting firm’s work and its opinion of the corporation’s financial statements, especially if they conform to the normal and generally accepted practices of accountancy.
Balance sheet – A condensed financial statement showing the nature and amount of a company’s assets, liabilities and capital on a given date.
Barrel – A measure of volume equivalent to 42 gallons or just under 159 litres. Abbreviated bbl.
Bbl – An abbreviation for barrel.
Bear – Someone who believes the market will decline.
Bear market – A declining market.
Bid – the price at which a dealer is willing to buy.
Bitumen- Is the viscous hydrocarbon compound that is extracted from oil sands. It is upgraded before transport.
Block – A large holding or transaction of stock, often 10,000 shares or more.
Boiler room – an enterprise that uses high pressure sales tactics, false or misleading information, and scare tactics, generally over the telephone, to sell overpriced or worthless investments to unsophisticated investors.
Bond – Evidence of a debt on which the issuing company promises to pay the bondholders a specified amount of interest for a specified length of time, and to repay the loan on the expiration date.
British Thermal Unit – (BTU) A unit measuring heat energy. One BTU is the amount of heat necessary to heat a pound of water by one degree Fahrenheit.
Broker – An agent who handles the public’s orders to buy and sell securities, commodities or other property in exchange for a commission charged for the service.
Bull – Someone who believes the market will rise.
Bullion – precious metals in the form of bars that are at least 99.5% pure.
Bull market – A rising market.
Call – the right, but not an obligation, to buy a commodity or a financial security on a specified date in the future.
Capital gain or capital loss – Profit or loss from the sale of a capital asset.
Cash flow – Reported net income of a corporation plus amounts charged off for depreciation, depletion, amortization, and extraordinary charges to reserves.
Cash sale – A transaction on the floor of the stock exchange that calls for delivery of the securities the same day.
Commission broker – An agent who executes the public’s orders for the purchase or sale of securities or commodities.
Common stock – Securities that represent an ownership interest in a corporation. If the company has also issued preferred stock, both common and preferred have ownership rights. Common stockholders assume more risk, but usually get more control and could collect more awards in the form of dividends and capital appreciation.
Contract-specified price – The delivery price determined when a contract is signed. It can be a fixed price or a base price escalated according to a given formula.
Correction – a decline in prices following a rise in a market.
Crude oil – Refers to the unprocessed hydrocarbon compounds extracted from the ground. Can be heavy or light, sweet or sour.
Cubic metre: Along with cubic feet, cubic metres are the standard measurement for a quantity of natural gas.
Current assets – Those assets of a company that are reasonably expected to be realized in cash, sold or consumed during one year. These include cash, government bonds, receivables and money due usually within one year, as well as inventories.
Current liabilities – Money owed and payable by a company, usually within one year.
Cutoff grade – The lowest grade, in percent yield, of oil at a minimum that can be mined at specified cost.
Delayed opening – The postponement of trading of an issue on a stock exchange beyond the normal opening of a day’s trading because of specific market conditions, such as an imbalance of buyers and sellers or corporate news that needs time to circulate.
Development drilling – Drilling done to determine more precisely size, grade, and configuration of an oil deposit subsequent to the time the determination is made that the deposit can be commercially developed.
Dilbit – Abbreviation of diluted bitumen. The pipeline-ready combination of heavy oil/bitumen and naptha.
Diversification – Spreading investments among different types of securities and various companies in different fields.
Dividend – The payment designated by the board of directors to be distributed pro rata among the shares outstanding.
Earnings report – A statement, also called an income statement, issued by a company showing its earnings or losses over a given period. The earnings report lists the income earned, expenses and the net result.
Enhanced Oil Recovery – (EOR) Methods that increase the yield of an oil-bearing formation. Includes gas injection, water injection, steam assisted gravity drainage, toe-to-heel air injection and a number of steam-injection techniques.
Equity – The ownership interest of common and preferred stockholders in a company.
Exploration drilling – Drilling done in search of new mineral deposits, on extensions of known oil deposits, or at the location of a discovery up to the time when the company decides that sufficient oil reserves are present to justify commercial exploitation. Assessment drilling is reported as exploration drilling.
Face value – The value of a bond that appears on the face of the bond, unless the value is otherwise specified by the issuing company.
Fineness – the purity of a precious metal measured in 1,000 parts of an alloy: a gold bar of .995 fineness contains 995 parts gold and 5 parts of another metal. The American Gold Eagle is .9167 fine, which means it is 91.67% gold. A Canadian Maple Leaf has a fineness of .999, meaning that it is 99.9% pure.
Fiscal year – A corporation’s accounting year.
Forward costs – The operating and capital costs that will be incurred in any future production of a commodity from in-place reserves. Included are costs for labor, materials, power and fuel, royalties, payroll taxes, insurance, and general and administrative costs that are dependent upon the quantity of production and, thus, applicable as variable costs of production.
Free and open market – A market in which supply and demand are freely expressed in terms of price. Contrasts with a controlled market in which supply, demand and price may all be regulated.
Futures contract – an agreement made on an organized exchange to take or make delivery of a specific commodity or financial instrument at a set date in the future
Gold standard – a monetary system based on convertibility into gold; paper money backed and interchangeable with gold.
Hedge – a transaction initiated with the specific intent of protecting an existing or anticipated physical market exposure from unexpected or adverse price fluctuations.
Heavy Oil – Though standards vary, heavy oil can be roughly defined as those crudes with API gravities of < 22° API. Oil sands are sometimes included in the definition of heavy oils and sometimes placed in a different category.
Holding company – A corporation that owns the securities of another, in most cases with voting control.
Hydrocarbons – Organic chemicals comprised of hydrogen and carbon. Methane, propane, butane, natural gas and crude petroleum are all hydrocarbons.
In situ – From the Latin for “ in place” denotes oil sand extraction techniques that pump crude bitumen from a well rather than surface mine the raw oil sand. There are many methods of in situ extraction.
Institutional investor – An organization whose primary purpose is to invest its own assets or those held in trust by it for others. These include pension funds, investment companies, insurance companies, universities and banks.
Interest – Payments borrowers pay lenders for the use of their money. A corporation pays interest on its bonds to its bondholders.
Inverted market – a situation in which prices for future deliveries are lower than the spot price. Also known as backwardation.
Investment – The use of money for the purpose of making more money.
Investment company – A company or trust that uses its capital to invest in other companies.
Liabilities – All the claims against a corporation, including payable accounts, wages, salaries, dividends, taxes and fixed or long-term liabilities.
Liquidation – The process of converting securities or other property into cash.
Liquidity – The ability of the market in a particular security to absorb a reasonable amount of buying or selling at reasonable price changes.
Liquidity – the quality of being readily convertible into cash.
Listed stock – The stock of a company that is traded on a securities exchange.
Locked in – Investors are said to be locked in when they have profit on a security they own but do not sell because their profit would immediately become subject to the capital gains tax.
Long-term contract – One or more deliveries to occur after a year following contract execution.
Manipulation – An illegal operation.
Market price – The last reported price at which the stock or bond sold.
Merger – Combination of two or more corporations.
Methane – The primary component of natural gas.
Naphtha: A light hydrocarbon that is used to dilute heavy oils before pipeline transport.
Natural Gas – Is a hydrocarbon compound used primarily for generating electricity and domestic use (such as ranges and heating/cooling). Methane is the primary and most valuable component.
Natural gas is measured in cubic metres or cubic feet.
New York Futures Exchange (NYFE) – A subsidiary of the New York Stock Exchange devoted to the trading of futures products.
New York Mercantile Exchange – (NYMEX) Is the predominant commodity futures exchange.
New York Stock Exchange (NYSE) – The largest organized securities market in the United States, with prices determined by public supply and demand.
NYSE Composite Index – The composite index covering price movements of all common stocks listed on the New York Stock Exchange.
Offer – The price at which a person is ready to sell. Opposed to bid, the price at which one is ready to buy.
Oil Sand/Tar Sand – The source material from which bitumen is separated composed of a combination of sand, water and bitumen.
Organization of the Petroleum Exporting Countries – (OPEC) is an international organization of major oil producers.
Oversold – The reverse of overbought. A single security or a market believed to have declined to an unreasonable level.
Paper Barrel – Oil futures contracts that are bought and sold without actually intending to accept delivery of the oil. Speculative trading such as this accounts for some of the price per barrel of oil.
Penny stocks – Low-priced issues, often highly speculative, selling at less than $1 a share.
Petroleum: A combination of hydrocarbons from which gasoline, diesel and kerosene can be derived.
Rally – A brisk rise following a decline in the general price level of the market, or in an individual stock.
Reclamation – The process of restoring the surface environment to acceptable pre-existing conditions.
Restoration – The returning of all affected groundwater to its pre-mining quality for its pre-mining use.
Speculation – The employment of funds by a speculator. Safety of principal is a secondary factor.
Speculator – One who is willing to assume a relatively large risk in the hope of gain.
Spin off – The separation of a subsidiary or division of a corporation from its parent company by issuing shares in a new corporate entity.
Spot contract – A one-time delivery of the entire contract to occur within one year of contract execution.
Spot market – a market in which delivery and payment have to be made within two working days of the transaction date.
Spot-market price – A transaction price concluded on the spot, usually involving a specific quantity of product. This contrasts with a term-contract sale price, which obligates the seller to deliver a product at an agreed frequency and price over an extended period.
Steam Assisted Gravity Drainage – (SAGD) is an enhanced oil recovery method that involves steam injection wells and a deeper, horizontal production well. The injected steam thins the bitumen so it flows to the lower well where it can be pulled out.
Synthetic crude – Is the product of combining bitumen with other hydrocarbons in an upgrader to facilitate transport.
Tailings – A water-based byproduct of oil sands extraction that is diverted into tailings ponds for settling.
Toronto Stock Exchange (TSX) – The largest stock exchange in Canada, the third largest in North America and the seventh largest in the world by market capitalization. Based in Toronto, it is owned and operated by TSX Group for the trading of senior equities.
Trader – Individuals who buy and sell for their own accounts for short-term profit.
Turnover rate – The volume of shares traded in a year as a percentage of total shares listed on an exchange, outstanding for an individual issue or held in an institutional portfolio.
Unlisted stock – A security not listed on a stock exchange.
Volume – The number of shares or contracts traded in a security or an entire market during a given period.
West Texas Intermediate – (WTI) Is a grade of crude oil that is of high API gracity and low sulfur content. Whenever you hear that oil is at $X per barrel, it usually refers to West Texas Intermediate.
When issued – A short form of “when, as and if issued.” The term indicates a conditional transaction in a security authorized for issuance but not as yet actually issued.
Working control – Theoretically, ownership of 51% of a company’s voting stock is necessary to exercise control.
Yield – Also known as return. The dividends or interest paid by a company expressed as a percentage of the current price.