AG-1 Well Cost Allocations and Adjustments

Provides a guide to an equitable basis for determination of values to be used with well cost adjustments required as a result of ownership changes occurring as a result of expansion or contraction of a unit, recompletion of a well, multiple completions, completion of a well in a zone of different ownership, or creation of a field wide or reservoir unit. 27 pages. Revised April 2003.




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Table of Contents

  1. Introduction
  2. New Well Cost Apportionments
    1. Allocation of Intangible Drilling Costs
    2. Allocation of Tangible Costs
    3. Surface Equipment
    4. Drilling Overhead
  3. Well Cost Adjustments and Other Payments – Existing Wellbores
    1. Intangible Drilling Costs
    2. Compensation for Surface and Subsurface Tangible Equipment
  4. Allocation of Operating Expenses
    1. Direct Operating Costs
    2. Indirect Operating Costs
  5. Workover Operations
    1. Allocation of Costs for Workover Operations
    2. Damages
  6. Abandonment
    1. Partial Abandonment-Non-Productive Formation
    2. Partial Abandonment after Completion of Well in Multiple Formations
    3. Abandonment in all Formations
  7. Conclusion

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