MFI-48 Application & Calculation of Drilling Overhead

This document discusses which projects qualify for overhead under the various Model Forms for both fixed rate and percentage overhead, how to calculate the proper overhead due, the various equipment types qualifying for drilling overhead, what is meant by “commence,” “suspension of operations” and “Force Majeure.”  Numerous examples are provided explaining the concepts so users can properly calculate overhead. Recent update provides guidance on what is meant by “spud” date, clarifies “suspension of operations” in situations such as multi-stage fracing where completion operations require long periods of activity and inactivity, incorporates the COPAS 2005 Accounting Procedure provisions, and provides additional examples to aid users in applying the MFI.  35 pages.  Published April 2012.

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Description

Table of Contents

  1. INTRODUCTION
  2. COMBINED FIXED RATE OVERHEAD
    1. Commencement and Termination of Drilling Overhead – Drilling Wells
    2. Workovers and Recompletions Qualifying for Drilling Overhead
    3. Suspension of Operations
    4. Force Majeure Events
    5. Commencement of Drilling Overhead – Workover Operations
    6. Equipment Type Qualifying for Drilling Overhead
  3. PERCENTAGE BASED OVERHEAD
    1. Overhead on Plugging Back and Sidetracking Operations
    2. Overhead on Workover/Remedial Operations
    3. Consecutive Remedial Operations
  4. EXAMPLES – SPUD DATE DETERMINATION
  5. EXAMPLES – DRILLING OVERHEAD CALCULATIONS
  6. EXHIBIT 1
  7. EXHIBIT 2