Memo No. IC-002 · Rev B · Live Working Copy

Investment Committee · Technology Portfolio

Memorandum

money has a time value. so does a decision.
To
Technology Investment Committee
Re
SPC-1042 · AFE Approval Automation
From
M. B. Thompson · Enterprise Architecture
Date
July 2026

Committee case for the well-pad AFE approval workflow committed in the special-project pipeline: governed routing on the delegation-of-authority matrix, ERP-integrated commitments, and a real audit trail. Benefit streams reflect committee diligence on the pipeline's $1.45M screening estimate.

Case under review

Scenario

The committee’s view

Proceed.

Positive net present value with discounted payback inside the analysis horizon.

M. B. Thompsonfor the Committee
Net present value
$884,624
Internal rate of return
50.4%
Discounted payback
2.2 yrs

everything below is live. move a slider; the verdict above recalculates.

Cost & rate assumptions

Discount rate10%
Benefit realization75%
Analysis horizon5 yrs
Ongoing opex delta / yr$130,000
Implementation cost$520,000
Capex$60,000

Benefit & cost-saving streams

Editable line items: set the annual value, the year benefits begin, the ramp period, and the one-time flag.

Supporting measures

MIRR

Reinvested at the discount rate

32.4%

Profitability index

PV benefits ÷ PV costs

1.82

Return on investment

Undiscounted, lifetime

115.5%

Discounted payback

Interpolated

2.2 yrs

PV of benefits

$1,957,427

PV of costs

$1,072,802

Summary of the case

The SPC-1042 · AFE Approval Automation base case supports proceeding with the investment. Over a 5-year horizon it produces a net present value of $884,624 at a 10% discount rate, an internal rate of return of 50.4%, and a profitability index of 1.82 (every $1 of cost returns $1.82 in present-value benefit). On a discounted basis it pays back in 2.2 years, assuming 75% of modeled benefits are realized. Committee case for the well-pad AFE approval workflow committed in the special-project pipeline: governed routing on the delegation-of-authority matrix, ERP-integrated commitments, and a real audit trail. Benefit streams reflect committee diligence on the pipeline's $1.45M screening estimate.

M. B. Thompson

Prepared by · Enterprise Architecture

Reviewed by · Committee Chair

Prepared as a portfolio demonstration. Figures are illustrative and do not represent an actual investment. Method: discounted cash flow over the stated horizon; IRR by bisection; MIRR reinvested at the discount rate; sensitivity by one-at-a-time ±20% flex; risk by Monte Carlo sampling of benefit magnitude, realization, discount rate, and implementation cost. Companion document: DWG IE-001, the Innovation Engine, where cases earn the right to a memorandum. Built by Matthew Thompson.