In the complex world of oil and gas drilling, few documents are as essential—or as underutilized—as the Daily Drilling Report (DDR). It’s supposed to be the real-time pulse of a drilling operation. But according to a recent survey we conducted, one of the most persistent challenges operators face is tied to what DDRs often don’t capture well enough: accurate cost tracking.

Cost Tracking Isn’t Just a Reporting Issue—It’s a Financial One

Survey participants consistently flagged that daily cost tracking is either siloed, inconsistent, or still largely manual. This is more than just an administrative headache. When real-time cost data isn’t properly captured and organized, it introduces a ripple effect that impacts the entire lifecycle of the well.

One of the biggest consequences? Inaccurate AFE (Authorization for Expenditure) estimates.

AFE estimates are built on the assumption that historical cost data and real-time tracking will serve as a reliable benchmark. But when those assumptions are based on fragmented or delayed DDR entries, they quickly fall apart.

When the Numbers Don’t Add Up: EOW vs. AFE

Here’s how the problem compounds:

AFE estimates are created based on assumed costs and timelines.
DDR reports throughout the drilling process fail to capture daily costs accurately or in a standardized format.
At end-of-well (EOW) review, the actual spend often exceeds estimates.
The result: budget overruns, strained capital planning, and project post-mortems full of finger-pointing.

In some cases, the discrepancy between AFE and EOW costs can be enough to derail investor confidence or delay future capital deployment. It’s not a small issue—it’s a systemic risk.

Why This Problem Persists

So why haven’t most teams fixed it yet?

Manual Reporting: Too many operators still rely on handwritten or emailed DDRs, which are prone to errors and delays.
Lack of Integration: Cost data is often not synced with drilling activity logs in a centralized platform.
Time Pressure: Drilling engineers are focused on operational performance, not daily cost detail entry.

The Case for Real-Time DDR Systems with Built-In Cost Tracking

The industry is overdue for change. Newer DDR platforms and SaaS tools are emerging that:

Allow real-time, standardized cost entries tied directly to rig activity.
Integrate with accounting and AFE systems to auto-update projections.
Generate end-of-day cost snapshots for proactive decision-making.

By shifting from a reactive to a proactive cost management model, operators can regain control of their budgets and drastically reduce EOW cost surprises.

Final Thoughts

AFE accuracy starts with the DDR. It’s not just about knowing how much pipe you ran or mud you pumped—it’s about tying those actions to actual dollars, day by day.

Inaccurate AFE estimates aren’t just a reporting flaw—they’re a sign that your cost tracking system is broken at the root. Fixing this starts with empowering drilling teams with the right tools and real-time visibility they need to deliver both performance and predictability.