AFE – Authorization for Expenditure

The AFE or Authorization for Expenditure is the anticipated drilling costs for the drilling and completion of a proposed well. Prior to the drilling or work over of a prospect well, the operator will provide the working interest owners with the estimated well drilling costs or estimated work over costs (AFE) outlining the anticipated expenditures. Costs may be identified as dry hole costs which are costs incurred to drill up the the casing point in addition to the costs to drill, test and complete the well is completion is deemed necessary.