LSU PETE 3025 Final Exam Questions
& Answers (Grade A+)
WTI, Brent, and others are oil _____ _____ -
correct answer ✅price benchmarks
In the United States, ____________________ is the preferred
measure and pricing model. -
correct answer ✅West Texas Intermediate (WTI)
what 4 factors make the oil and gas business so risky? -
correct answer ✅1. price uncertainty and fluctuations (risky
industry)
2. geological uncertainty
3. large upfront investment
4. long project life
WTI is typically slightly _____ in price than Brent -
correct answer ✅lower
What type of events/factors affect oil prices? -
correct answer ✅supply/demand, politics, war, geography,
recessions/depressions, etc.
,LSU PETE 3025 Final Exam Questions
& Answers (Grade A+)
What major event happened with the price of oil in 2020? -
correct answer ✅The price of WTI went negative. US was stock
piling oil during the pandemic (while demand was low). Demand
was so low, and the stockpile was so large we didn't have anywhere
to store the oil, so we lost money storing the oil on barges at sea
tanks, underground facilities, etc., which made the price go
negative.
Most countries in the world have _____ ownership of minerals and
mineral rights (minerals and mineral rights are vested in the public
and administered by the government) -
correct answer ✅public
The United States has _____ ownership of minerals and mineral
rights (Mineral ownership overwhelmingly reside with the private
landowner of the land containing or overlying the mineral deposits
or with the private owner of the mineral rights) -
correct answer ✅private
Minerals and mineral rights are vested in the public and
administered by the government. -
correct answer ✅Public Ownership
,LSU PETE 3025 Final Exam Questions
& Answers (Grade A+)
_____ _____: Mineral ownership overwhelmingly reside with the
private land owner of the land containing or overlying the mineral
deposits or with the private owner of the mineral rights (Alaska is
one exception). -
correct answer ✅Private Ownership
Mineral ownership includes _____ minerals -
correct answer ✅solid
Two theories of ownership regarding ownership of oil and gas -
correct answer ✅1. Ownership-in-place theory
2. Non-ownership theory
Most states adhere to the ____________ (Texas, New Mexico,
Colorado, Kansas), but Louisiana adheres to the _____________
theory (along with Oklahoma, California, and Wyoming) -
correct answer ✅ownership-in-place, non-ownership
Louisiana adheres to the ___________ theory -
correct answer ✅non-ownership
, LSU PETE 3025 Final Exam Questions
& Answers (Grade A+)
Hydrocarbons are _____ (i.e. they can migrate across property
lines) -
correct answer ✅fugitive (fugacious)
The owner of the oil or gas is the person on whose land it is
located. However, if the oil or gas migrates -moves - to another
person's property, then the original owner no longer owns it. -
correct answer ✅Ownership-in-place theory
Under the non-ownership theory no one owns the oil and gas until
it is produced and reduced to possession. Whoever removes the oil
or gas and reduces it to possession from the land is the person who
owns it, but you can't trespass to remove it. -
correct answer ✅Non-ownership theory
Minerals are "_____ to possession" when they are under physical
control that permit delivery to another. -
correct answer ✅reduced
Oil and gas deposits may stretch over several pieces of property
with different owners. Whoever taps into a reservoir of oil or gas
will be removing these resources from all the land, not just his or
& Answers (Grade A+)
WTI, Brent, and others are oil _____ _____ -
correct answer ✅price benchmarks
In the United States, ____________________ is the preferred
measure and pricing model. -
correct answer ✅West Texas Intermediate (WTI)
what 4 factors make the oil and gas business so risky? -
correct answer ✅1. price uncertainty and fluctuations (risky
industry)
2. geological uncertainty
3. large upfront investment
4. long project life
WTI is typically slightly _____ in price than Brent -
correct answer ✅lower
What type of events/factors affect oil prices? -
correct answer ✅supply/demand, politics, war, geography,
recessions/depressions, etc.
,LSU PETE 3025 Final Exam Questions
& Answers (Grade A+)
What major event happened with the price of oil in 2020? -
correct answer ✅The price of WTI went negative. US was stock
piling oil during the pandemic (while demand was low). Demand
was so low, and the stockpile was so large we didn't have anywhere
to store the oil, so we lost money storing the oil on barges at sea
tanks, underground facilities, etc., which made the price go
negative.
Most countries in the world have _____ ownership of minerals and
mineral rights (minerals and mineral rights are vested in the public
and administered by the government) -
correct answer ✅public
The United States has _____ ownership of minerals and mineral
rights (Mineral ownership overwhelmingly reside with the private
landowner of the land containing or overlying the mineral deposits
or with the private owner of the mineral rights) -
correct answer ✅private
Minerals and mineral rights are vested in the public and
administered by the government. -
correct answer ✅Public Ownership
,LSU PETE 3025 Final Exam Questions
& Answers (Grade A+)
_____ _____: Mineral ownership overwhelmingly reside with the
private land owner of the land containing or overlying the mineral
deposits or with the private owner of the mineral rights (Alaska is
one exception). -
correct answer ✅Private Ownership
Mineral ownership includes _____ minerals -
correct answer ✅solid
Two theories of ownership regarding ownership of oil and gas -
correct answer ✅1. Ownership-in-place theory
2. Non-ownership theory
Most states adhere to the ____________ (Texas, New Mexico,
Colorado, Kansas), but Louisiana adheres to the _____________
theory (along with Oklahoma, California, and Wyoming) -
correct answer ✅ownership-in-place, non-ownership
Louisiana adheres to the ___________ theory -
correct answer ✅non-ownership
, LSU PETE 3025 Final Exam Questions
& Answers (Grade A+)
Hydrocarbons are _____ (i.e. they can migrate across property
lines) -
correct answer ✅fugitive (fugacious)
The owner of the oil or gas is the person on whose land it is
located. However, if the oil or gas migrates -moves - to another
person's property, then the original owner no longer owns it. -
correct answer ✅Ownership-in-place theory
Under the non-ownership theory no one owns the oil and gas until
it is produced and reduced to possession. Whoever removes the oil
or gas and reduces it to possession from the land is the person who
owns it, but you can't trespass to remove it. -
correct answer ✅Non-ownership theory
Minerals are "_____ to possession" when they are under physical
control that permit delivery to another. -
correct answer ✅reduced
Oil and gas deposits may stretch over several pieces of property
with different owners. Whoever taps into a reservoir of oil or gas
will be removing these resources from all the land, not just his or
