When is a Well a Company Asset

Oil & Gas Operations and Exploration companies have many different interpretations of when a well becomes an asset of the company.  While this question seems simplistic, it is an essential component of a Well Life Cycle Framework to establish clarity on the answer.  

The answer to this question is really based on how a company views land positions, PUDs, Probable, and Possible locations and also yet to be determined opportunities within the budget process and the reserve process. 

The biggest key to identifying a well asset is to do it at the earliest point that a well or potential well enters an annual budget cycle   By identifying early, the entire process of tracking concept to reality becomes possible.  As an idea matures to the point of requiring AFE approval and accounting function, the information surrounding the well concept can evolve and serve a cumulative requirement to all functions, as well as give retrospective insight to the accuracy of planning forecasts to actual performance. 

This identification process combined with a data warehouse able to absorb key information elements from each functional application in the well life cycle framework will position a company to much greater insights as to the actual functional and physical performance of the company.  

The following diagram aids in understanding this dynamic.