Authorization For Expenditure
What this document covers
The Authorization for Expenditure (AFE) is a legal document used to obtain approval for costs and expenses related to drilling operations or development projects. This form is essential for planning and controlling project budgets, ensuring that all expenditures are documented and approved by relevant parties. Unlike general expense forms, the AFE provides detailed breakdowns of projected costs and facilitates better financial management in the oil and gas industry.
What’s included in this form
- AFE number for tracking
- Details of the company and well, including location and estimated drilling depth
- Breakdown of intangible and tangible costs associated with the project
- Approval signatures from company and joint operator representatives
- Total estimated costs to complete the project
When to use this document
This form should be used when seeking financial approval for expenditures in oil and gas projects. It is crucial for securing funding and ensuring that all stakeholders agree on the anticipated costs before any work begins. This form also helps maintain accountability throughout the project lifecycle.
Who can use this document
This form is intended for:
- Operators in the oil and gas industry
- Financial managers overseeing project budgets
- Joint venture partners requiring transparency in project expenses
- Contractors involved in drilling or development operations
How to complete this form
- Identify the AFE number and the company details.
- Enter the well information, including proposed depth and location.
- Break down the projected costs into intangibles and tangibles.
- Calculate the total costs and ensure they are accurately reflected.
- Obtain signatures from the required approving parties, indicating their consent to the expenditures.
Does this document require notarization?
Notarization is generally not required for this form. However, certain states or situations might demand it. You can complete notarization online through US Legal Forms, powered by Notarize, using a verified video call available anytime.
Typical mistakes to avoid
- Failing to include all anticipated costs, which can lead to budget overruns.
- Omitting required signatures or approvals, rendering the form invalid.
- Using outdated AFE numbers, causing confusion in tracking expenditures.
- Not reviewing state-specific regulations prior to submission, which can delay approval.
Why complete this form online
- Quick access to editable templates with pre-drafted legal language.
- Easy submission and sharing with stakeholders for faster approval.
- Convenient tracking of costs and approvals in one centralized document.
- Streamlined process without the need for physical paperwork.
Form popularity
FAQ
AFEs are typically circulated between all concerned parties for review and approval prior to capital expenses being accrued. The process of managing AFEs also includes the working interests of partners in joint ventures which are so typical in the upstream sector of the oil and gas industry.
Authorization for Expenditure (AFE) Authorization for Approval.
WBS is a part of the Authorization for Expenditure (AFE). The database input data were obtained from AFE which is submitted by the PSC Contractor after approval; and the results AFE close-out. It is expected that by using standardized WBS, all PSC contractors will adopt this standard in their submitting AFE.
Authorizations For Expenditure (AFEs) are typically raised by companies to provide a draw down against the broader capital budgets in relation to specific projects and account for the budget, projected field costs and actual costs based on a standard chart of accounts which depends on the type of project.
AFE Costs means the actual costs incurred, which are itemized on the AFE form for that well. These costs shall include all expenses incurred for drilling and completing a well through to the tank batteries, pipeline or other point of sale.
