This form is used to document the estimated total costs for tangibles and intangibles as it relates to the exploration and/or development of oil, gas, and minerals work project. It also provides formal approval for the act or process of paying out or disbursement.
New Mexico Cost Estimate and Authorization For Expenditure (AFE) — Detailed Description and Types The Cost Estimate and Authorization For Expenditure (AFE) is a crucial document used in the oil and gas industry, particularly in New Mexico, to outline the estimated costs and gain approval for expenditures associated with a specific project. It serves as a comprehensive tool to forecast expenses, manage budgets, and track the financial aspects of oil and gas operations. This article will provide an in-depth explanation of the New Mexico AFE and its various types. 1. New Mexico Cost Estimate and Authorization For Expenditure (AFE): The New Mexico AFE is a standardized document that encompasses a comprehensive breakdown of costs and a detailed explanation of the project it pertains to. It often includes expenses for drilling, completion, equipment, labor, infrastructure development, permits, compliance, and other essential materials and services required for oil and gas operations in New Mexico. 2. Types of New Mexico AFE: 2.1. Drilling AFE: A drilling AFE focuses on estimating the costs associated with the drilling phase of an oil or gas well. It includes expenses related to well site preparation, drill rig mobilization, drill bit rentals, casing, cementing, drilling fluids, directional drilling services, and other drilling-specific technologies and services. 2.2. Completion AFE: A completion AFE highlights the expected costs linked to the completion phase of an oil or gas well. It covers expenses for completing the well bore, such as perforating, fracturing, gravel packing, running production tubing, installing wellhead equipment, and establishing flow connections to the surface facilities. 2.3. Work over AFE: A work over AFE focuses on costs associated with production well intervention, maintenance, or enhancements. Work over activities include well servicing, stimulation treatments, remedial cementing, mechanical repairs, artificial lift installation or repair, and any other activities required to optimize or restore production. 2.4. Infrastructure AFE: An infrastructure AFE details the costs related to developing necessary facilities and infrastructure to support oil and gas operations. It covers expenses for constructing access roads, installing pipelines, building gas processing plants, designing and setting up centralized production facilities, and establishing storage tanks or facilities. 2.5. Environmental Compliance AFE: An environmental compliance AFE outlines the costs associated with meeting regulatory requirements and ensuring environmental sustainability. It includes expenses for obtaining permits, performing environmental impact assessments, conducting wildlife surveys, implementing mitigation measures, and any other activities necessary to comply with environmental regulations. In conclusion, the New Mexico Cost Estimate and Authorization For Expenditure (AFE) is a comprehensive document used in the oil and gas industry to estimate and gain approval for project expenses. Its various types, including drilling, completion, work over, infrastructure, and environmental compliance Ages, enable accurate financial management and budgeting for different phases and aspects of oil and gas operations in New Mexico.
