Common use of Authorization for Expenditure Clause in Contracts

Authorization for Expenditure. “AFE”) Procedure (A) Prior to incurring any commitment or expenditure for the Project Account not pre-approved in the Annual Work Program and Budget, the Operator will issue an AFE for items of a capital nature and for work, of the original annual budgeted amounts, if such amounts have changed. The above will apply to exploration or appraisal, development and production Work Programs and Budgets. Notwithstanding the above, Operator shall not be obliged to furnish an AFE to the Parties with respect to any Minimum Work Obligations, approved in the Annual Budget. (B) All AFEs shall be for informational purposes only. Approval of an operation in the current Work Program and Budget shall authorize Operator to conduct the operation (subject to Article 6.7) without further authorization from the Parties.