AFE | Energy Glossary

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authorization for expenditure (AFE)

1. n. [Oil and Gas Business]

A budgetary document, usually prepared by the operator, to list estimated expenses of drilling a well to a specified depth, casing point or geological objective, and then either completing or abandoning the well. Such expenses may include excavation and surface site preparation, the daily rental rate of a drilling rig, costs of fuel, drillpipe, bits, casing, cement and logging, and coring and testing of the well, among others. This estimate of expenses is provided to partners for approval prior to commencement of drilling or subsequent operations. Failure to approve an authority for expenditure (AFE) may result in delay or cancellation of the proposed drilling project or subsequent operation.

Alternate Form: authority for expenditure