Commercial Well

AAA

DEFINITION of 'Commercial Well'

Any oil or gas drilling site that produces enough oil or gas so as to be commercially viable. All wells that investors are willing to put money into are considered to be commercial wells. Sites with non-producing wells fall outside this category, as do sites with only one or two wells (unless their production is extremely high on a consistent basis).

BREAKING DOWN 'Commercial Well'

Limited partnerships typically will syndicate a share of a commercial well. As well, owners of working interests and those who receive royalties also invest in commercial wells. Investment interest in viable commercial wells is often high, due to their inherent profitability.

RELATED TERMS
  1. Farmout

    The assignment of part or all of an oil, natural gas or mineral ...
  2. Primary Recovery

    The first stage of oil and gas production, in which natural reservoir ...
  3. BP Oil Spill

    A 2010 oil spill that occurred in the Gulf of Mexico as a result ...
  4. 3P

    The total amount of reserves that a company estimates having ...
  5. Oil Field

    A tract of land used for extracting petroleum, or crude oil, ...
  6. Sweet Crude

    A type of oil that meets certain content requirements, including ...
Related Articles
  1. Active Trading

    Oil And Gas Industry Primer

    Before jumping into this hot sector, learn how these companies make their money.
  2. Investing

    Can a Venezuela Revolt Impact Oil Prices?

    How a social crisis in Venezuela could affect West Texas Intermediate crude oil and Brent crude oil prices.
  3. Mutual Funds & ETFs

    ETF Analysis: iShares US Oil&Gas Explor&Prodtn

    Learn about the iShares U.S. Oil & Gas Exploration & Production ETF, which provides an efficient way to invest in the exploration and production sector.
  4. Stock Analysis

    The 3 Energy Stocks You'll Wish You Bought in 2015

    Learn about the energy sector and the types of companies that operate within the sector. Find out about some of the best-performing energy stocks in 2015.
  5. Stock Analysis

    The 4 Worst Oil and Gas Stocks of 2015

    Learn about the energy sector and the type of companies that operate within the sector. Find out about the four worst performing oil and gas stocks of 2015.
  6. Chart Advisor

    Traders Step Back to Assess Commodities Damage

    Traders are turning to these exchange-traded notes and exchange-traded funds to analyze key commodities and determine what could be coming next.
  7. Economics

    These 5 Countries Move the Supply of Oil

    Learn which countries are the largest source of change in the global supply of oil. Oil prices crashed in 2014 as supply increased and demand dropped.
  8. Investing News

    Oil or Gold: Which Will Recover First?

    Not sure where oil and gold are headed? The answer is complex.
  9. Investing

    How Petro Economies Are Coping with $40 Oil

    Will petro economies be able to cope with a $40 per barrel oil price?
  10. Fundamental Analysis

    Watch Airline Stocks For Takeoff Potential

    Airline stocks have taken a hit but they show potential for takeoff as a result of low fuel prices, reduced competition and an improving economy.
RELATED FAQS
  1. How much oil must be produced to maintain inventory levels in the United States?

    Domestic energy investors should track the reserve inventory of crude oil for the United States, which is released in a weekly ... Read Full Answer >>
  2. To what extent is the oil and gas sector dominated by a few major companies?

    Oil and gas are two expansive and highly diverse product lines, with active competition domestically and internationally. ... Read Full Answer >>
  3. How do the costs of oil sands producers compare to traditional drillers?

    The oil sands of Canada are some of the most expensive crude oil assets in the world to produce. Each asset type, such as ... Read Full Answer >>
  4. Do all oil companies received the quoted price of West Texas Intermediate for their ...

    The quoted, or spot, price of West Texas Intermediate, or WTI, crude oil is just one of several benchmark oil prices. The ... Read Full Answer >>
  5. How do the average costs compare for the different types of oil drilling rigs?

    Average costs vary widely between different types of oil rigs, starting at around $20 million and ranging as high as close ... Read Full Answer >>
  6. How long does it take an oil and gas producer to go from drilling to production?

    Depending on the depth of drilling required and the type of drilling method used, a standard oil well can commonly advance ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
  2. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock Exchange is a nonprofit organization run by the China Securities ...
  3. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. A dead cat bounce ...
  4. Bear Market

    A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment ...
  5. Alligator Spread

    An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market ...
  6. Tiger Cub Economies

    The four Southeast Asian economies of Indonesia, Malaysia, the Philippines and Thailand. Tiger cub economy indicates that ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!