Afe acronym oil and gas
AFE has two possible meanings in accounting, depending where it crops up. If it's referring to proposed or reviewed budgets or projects, it most likely means "authorization for expenditures. When you're using it in this context, an AFE is a document that lays out the projected expenses for a particular project and authorizes an individual or group to spend a certain amount of money for that project. You can use this format in any organization, to allocate money to projects or members for any purpose that falls within your organization's guidelines. For example, a club might use an AFE to authorize renovations for its meeting space.
Oilfield Abbreviations and Acronyms
You must log in to edit PetroWiki. Help with editing. Content of PetroWiki is intended for personal use only and to supplement, not replace, engineering judgment. SPE disclaims any and all liability for your use of such content. More information. Preparing cost estimates for a well and getting management approval in the form of an AFE is the final step in well planning.
The AFE is often accompanied by a projected payout schedule or revenue forecast. Although an essential part of well planning, the cost estimate is often the most difficult to obtain with any degree of reliability. A properly prepared well cost estimate may require as much engineering work as the well design. The costs should address dry holes and completed wells.
In addition, accounting considerations such as tangible and intangible items must be taken into account. The cost estimate is the last item to be considered in the well plan, because it is heavily dependent on the technical aspects of the projected well.
After the technical aspects are established, the expected time required to drill the well must be determined. The actual well cost is obtained by integrating expected drilling and completion times with the well design.
Accounting and tax principles treat tangible and intangible costs in different ways. As a result, they must be segregated in the cost estimate. Although intangible costs are difficult to define precisely, they include expenditures incurred by the operator for:. The fundamental test is defining the salvage value of the item. If the item does not have a salvage value, it is an intangible. It is usually desirable to provide more cost detail than the general summary in Fig. A sample of a detailed summary is shown in Fig.
Factors considered in the detailed cost analysis will be presented in the AFE page. The cost divisions presented in Fig. These factors are heavily dependent on company drilling philosophy and, as such, may not apply to all companies.
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The AFE is often accompanied by a projected payout schedule or to or necessary for the drilling of wells, such as structures for storing oil. An AFE is a budgeting and approval form used during the planning process for The AFE form represents: (1) a budget for the project against which Leveraging Unconventional Assets for Oil and Gas - November 12,
The definitions provide an introduction to each term and may raise complex legal issues on which specific legal advice is required. The terms are also subject to change as applicable laws and customary practice evolve. This glossary is an essential tool to help readers talk the talk of the oil and gas industry. Drill into this reservoir of terminology. In the case of a Well, Abandonment may be temporary i.
This particular term is used in order to drilling and completion costs. Business can incur this expenditure only when the proposal is approved and mandate is provided.
An AFE is a budgeting and approval form used during the planning process for a well about to be drilled and for other projects. It includes an estimate of costs to be incurred during the IDC intangible drilling cost category and in the tangible equipment category.
What is an Authorization for Expenditure?
Very often abbreviations have multiple common meanings depending on the context they are used. From upstream and midstream we cover virtually every technical discipline. For downstream we cover a limited number of the more commonly used terms. The use of abbreviations and acronyms can be highly beneficial to technical publications where written content can be shortened. Technical Authors should always be aware that their publications are not just referenced by a peer group who will readily understand the acronyms they have included. Experienced Authors will always include a list of abbreviations used, either as an appendix or more appropriately at as an introduction to the main body of their publication.
What Does AFE Mean in Accounting?
You must log in to edit PetroWiki. Help with editing. Content of PetroWiki is intended for personal use only and to supplement, not replace, engineering judgment. SPE disclaims any and all liability for your use of such content. More information. Preparing cost estimates for a well and getting management approval in the form of an AFE is the final step in well planning. The AFE is often accompanied by a projected payout schedule or revenue forecast. Although an essential part of well planning, the cost estimate is often the most difficult to obtain with any degree of reliability. A properly prepared well cost estimate may require as much engineering work as the well design. The costs should address dry holes and completed wells.
The oil and gas industry uses many acronyms and abbreviations.
