Authorization for Expenditure (AFE)
Authorization for Expenditure (AFE) : A document used to estimate the cost of drilling, completing a well or installing major equipment facilities in an oil field. The AFE is submitted to management and/or participants in the activity for their authorization and approval of the expenditure. The AFE is a budgetary device; when the project is complete, the operator collects invoices of actual work done and compares it to the AFE, should the project come in under budget, he refunds the balance. If the project has cost overruns, the operator submits additional invoices to the participants
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