What is an Authorization for Expenditure?

December 4, 2012

Authorization for Expenditure (AFE)

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.  Costs are shown in total with accompanying breakdowns.  The AFE form represents: (1) a budget for the project against which actual expenditures are compared and (2) a joint venture form for evidencing agreement by joint interest owners to participate in the budgeted project.

How it’s important to us

The term “AFE” is used extremely frequently across departments in O&G organizations.  Before almost any well-related cost is incurred, it must be accounted for in an AFE.  Supplemental AFEs are often tied to initial authorizations for unplanned, but related work.

Knowledge Base

image description

BLOG: How custom software ages | Application Development Video Series, Episode 1

Not unlike hardware, custom-built software applications can age over time. There are a variety of ways that a business can outgrow a software application, and those aging applications can become more...

Read More »

image description

PAGE: Top 5 Oil and Gas Software Trends of 2014

What Oil and Gas Companies Can Expect in the Coming Wave of Master Data Management, Integration, and Digitization The new frontier of the North American oil and gas boom is being...

Read More »

image description

VIDEO: Three Information Management Best Practices For Reducing Your Land Litigation Expenses

During a recent lunch and learn presentation, Entrance president Nate Richards covered, “Three Information Management Best Practices For Reducing Your Land Litigation Expenses.” Fore more, download our lease jeopardy white...

Read More »




Corporate Office
2500 E TC Jester Suite 500
Houston, TX 77008

Entrance Software: Custom Software and SharePoint Soutions - Houston - Dallas - Denver