UC-779
Forecast AFE Overrun Against a Tolerance Ladder
Projects final well cost against the AFE while the well is drilling and escalates at set tolerance steps rather than at the reforecast.
TBDBuild Duration
XXXXIndicative ROI
XXXXBuild Cost
XXXXValue
The Challenge
Cost against AFE is reviewed on a monthly cycle, so an overrun is usually named after the money is committed. There is no agreed ladder that says which variance triggers which conversation, so escalation depends on who notices.
How It Works
- The engine tracks committed and actual cost against the AFE phase by phase as the well progresses.
- It forecasts cost at completion with a range and compares it against a tolerance ladder agreed up front.
- It escalates at each step of the ladder to the named owner, with the drivers of the variance attached.
What It Removes
- Overruns named at the monthly reforecast
- No agreed trigger for escalating a variance
- Commitments made before the variance is visible
Input Data RequirementsThe AFE and its phasing, committed cost and purchase orders, actual cost postings, daily drilling reports and section progress, the contract rate book.
Output FormatCost at completion forecast with range, tolerance ladder position, and an escalation pack naming the drivers.
“Show me the AFE that will miss while I can still move the money.”