Investor's wiki

Christmas Tree (oil and gas)

Christmas Tree (oil and gas)

What Is a Christmas Tree (oil and gas)?

A Christmas tree is a piece of equipment that gives flow control on a [oil or gas well](/business well). Christmas trees are a vertical assembly of valves with checks and gags that consider changes in flow control as well as injections to invigorate production. Christmas trees are purported on the grounds that the assortment of parts can look like a Christmas tree assuming you have the right amount of creative mind. The valves that involve a portion of the designs on the Christmas tree are opened when the oil or gas well is ready to create and the processing and storage facilities are ready to receive. Different designs are gadgets that work with pressure relief, monitoring and substance injection.

How Christmas Trees Work

Christmas trees are utilized in oil exploration and production in surface and underwater oil and gas wells. Christmas trees on surface wells are otherwise called surface trees, as they interface with the wellhead that is noticeable on the surface of a well.

Christmas trees utilized in offshore drilling and extraction are called subsea trees. Subsea trees can be vertical or horizontal in view of how the master valves - the valves set on the flow path and equipped for closing off production - are planned. Subsea trees have even to a lesser extent a likeness to a Christmas tree, however the name continues out of custom.

The Wellhead Versus the Christmas Tree

The Christmas tree is once in a while mistaken for the wellhead of an oil well. The Christmas tree sits on the wellhead, however it is a separate piece of equipment. There is no Christmas tree on the wellhead during drilling operations. Rather a victory prevention gadget sits on the wellhead as the well is penetrated and packaging/it are embedded to tube strings. At the point when the well is moved to production, the Christmas tree is fastened for flow control. So the wellhead is available all along though the Christmas tree is an extra piece of equipment that becomes an integral factor when the well moves from drilling to production.

Technical Terms

For most investors, knowing the definition of a Christmas tree won't change their approach to oil and gas companies. Investors basically center around universal company metrics like return on invested capital (ROIC) and earnings before depreciation, interest, taxes and amortization (EBITA). Past this, oil and gas investors can rapidly master concepts like proven and probable reserves and net acres.

So there is sketchy value in consuming too a significant part of the technical data around oil and gas production. All things considered, for investors that need to spend significant time in oil and gas investing, mastering the jargon is part of the cycle as the vast majority of the data is exceptionally technical once you move past the essential public filings.


  • A separate piece of hardware interfaces with the wellhead after the drilling has stopped and the well starts pumping oil or gas.
  • In the oil and gas industry, a Christmas tree is a piece of heavy equipment that controls the flow delivered by a well.
  • Frequently involved on offshore apparatuses as subsea trees, surface wells are additionally generally employed.