Analysis of Authority for Expenditure in Oil and Gas Operations

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Discussion Assignment 2
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Discussion
Generally, the report discusses the Authority for Expenditure which budgeting and an approval
form that can be used at the time of the planning process and for another project. This may
include an estimation of cost which is incurred at the time of intangible drilling cost category or
category of tangible equipment. AFE is mainly used by the oil and gas companies and who are
having interest in the joint ventures (Authority, 2019). This term is used for calculating the
drilling and completion cost. Geoscientist uses computer modeling and technology for finding
natural gas and oil. Typically AFE is generated by several engineers.
There are various steps that are involved while driving for oil and gas. The company needs to
focus on initial interest, leasing and geophysical survey. A geologist can find the oil and gas
through measuring and calculating the density of the underground rocks through using the radio
waves and sends into the ground. This will help in measuring the speed that reflects back to the
surface. Geologists can find the information about the wells that are drilled already or not
through taking the geophysical survey or through analyzing the effort of draining the specific
configuration of hydrocarbons (Turley, et. al., 2018).
In oil and gas sector surface or subsurface plays a very crucial role as it helps in determining the
coral beds and oil and gas accumulation, the concentration of important minerals, a deposit of
non-metallic minerals, recoverable groundwater, a different type of depth for engineering
planning, geothermal reserves and archaeological features. The seismic survey is explained as an
important component that is used for exploration of oil and gas. This will help in allowing
visualize the subsurface of the earth through using waves. The different oil companies in Alberta
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that provide seismic data are included ACE oilfield, A&B Concrete Pumping, Alberta
Directional Boring Ltd. And so on.
AFE is a term and process that is used for large capital expenditure that is related to the
development, production, and exploration. Large companies such as Husky uses AFE to track the
details of Oil and gas drill. As the expenditures of the gas industry and upstream oil are very
huge and there is inventive quite capital, so it needs an operator that incurs and documented all
the details. This requires associated partners in the joint ventures before starting the project.
Business can incur this expenditure to approve this proposal and to provide mandate (McIntyre
& Lacombe, 2015).
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References
Authority, G. L. (2019). GLA Expenditure over£ 250.
McIntyre, S., & Lacombe, D. (2015). Local Authority Personal Social Services Expenditure in
England: a Spatial Econometric Approach. Ageing and the Economy.
Turley, G., McNena, S., & Robbins, G. (2018). Austerity and Irish local government expenditure
since the Great Recession. Administration, 66(4), 1-24.
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