In the oil and gas industry, depth in a well is the measurement, for any point in that well, of the distance between a reference point or elevation, and that point. It is the most common method of reference for locations in the well, and therefore, in oil industry speech, “depth” also refers to the location itself.
Because wells are not always drilled vertically, there may be two “depths” for every given point in a wellbore: the measured depth (MD) measured along the path of the borehole, and the true vertical depth (TVD), the absolute vertical distance between the datum and the point in the wellbore. In perfectly vertical wells, the TVD equals the MD; otherwise, the TVD is less than the MD measured from the same datum. Common datums used are ground level (GL), drilling rig floor (DF), rotary table (RT), kelly bushing (KB) and mean sea level (MSL). 
Terms and Abbreviations:
The common references used in operations include:
- Kelly Bushing Height (KB): The height of the drilling floor above the ground level. Many wellbore depth measurements are taken from the Kelly Bushing. The Kelly bushing elevation is calculated by adding the ground level to the Kelly bushing height.
- Rotary Table (RT): e.g. MDBRT or TVDBRT. MDBRT stands for Measured Depth Below Rotary Table (MDBRT),
- Rig Floor (RF),
- Driller’s Depth below rotary table (DDbrt): The depth of a well or features within the wellbore as measured while drilling. The measured length of each joint of drillpipe or tubing is added to provide a total depth or measurement to the point of interest. Drillers depth is the first depth measurement of a wellbore and is taken from the rotary table level on the rig floor. In most cases, subsequent depth measurements, such as those made during the well completion phase, are corrected to the wellhead datum that is based on drillers depth (reference: Schlumberger Oilfield Glossary).
- Ground Level (GL),
- Casing Bowl Flange (CBF),
- Tubing Hanger Flange (THF),
- Mean Sea Level (MSL),
- Subsea Level (SS),
- Sea Bottom (SB),
- Measured Depth (MD),
- True Vertical Depth (TVD).
Although depth calculation is an intuitive concept, it is the source of much confusion because it is frequently not specified correctly. Absolute depth should always be specified with three components:
- a unit (e.g. ft for feet, m for meter,…),
- a path (e.g. TVD for True Vertical Depth, MD for measured depth)
- and the reference or datum they refer to (e.g. SS for Subsea Level, RT for Rotary Table…),
Any combination of unit, path, and reference can be used, as long as they result in fully specified, unambiguous depths.
How to determine the true vertical depth?
True vertical depth is obtained from a record of the deviation survey report. These surveys are generally run on deviated wellbores. It records measured depth (MD), inclination (deviation angle), azimuth angle, true vertical depth, and dogleg severity at various increments. To obtain a TVD, simply obtain a measured depth, go to the survey, and read off the TVD. If the desired measured depth is not in the survey, then extrapolate between the two closest points.
NB: Inclination is taken to be the angle of the well course from the vertical. Azimuth is taken clockwise from geographic north. In other words, the inclination angle measures the vertical direction and the azimuthal angle examines the horizontal direction.