A farmout agreement is used when the "farmor" agrees to assign acreage to the "farmee" in return for the "farmee" performing specified drilling and testing obligations, with the "farmor" also reserving an interest in the acreage assigned and in the production from the wells drilled by the second company.
Cook Illinois Farm out Agreement Providing For Single Well, with Dry Hole Earning An Assignment: The Cook Illinois Farm out Agreement Providing For Single Well, with Dry Hole Earning An Assignment is a contractual agreement commonly used in the oil and gas industry. This specific type of farm out agreement focuses on the drilling and exploration of a single well, with the provision for the earning of an assignment in case of a dry hole. In this agreement, the "armor" (the owner of the oil and gas lease or property) grants the "farmer" (the party seeking to drill and explore the well) the right to drill and operate a single well on the designated property. The farmer assumes the risks and costs associated with drilling, completion, and operation of the well. However, a distinguishing feature of the Cook Illinois Farm out Agreement Providing For Single Well, with Dry Hole Earning An Assignment is the provision for earning an assignment if the drilled well turns out to be a dry hole. A dry hole refers to a well that does not encounter any commercially viable quantities of oil or gas. In case of a dry hole, the farmer may earn an assignment, which means they can acquire a percentage of the working interest or ownership in the underlying property. The specific terms and conditions for earning this assignment are typically outlined within the agreement, including the percentage of working interest or ownership to be offered and the timeframe for exercising the option. Different variations or types of the Cook Illinois Farm out Agreement Providing For Single Well, with Dry Hole Earning An Assignment may include additional clauses or provisions, such as: 1. Commercial Discovery Clause: This clause specifies the criteria for a commercially viable discovery, determining the quantity and quality of oil or gas necessary for the well to be considered productive. 2. Dry Hole Assignment Terms: This section outlines the terms and conditions for earning the assignment in case of a dry hole, including the percentage of working interest to be acquired and any additional financial obligations. 3. Obligations and Responsibilities: The agreement may include a detailed description of the responsibilities and obligations of each party involved, such as the farmer's obligations to drill the well in a timely manner and the armor's obligations to provide necessary legal access and title documentation. 4. Title and Leasehold Interest: The agreement may address the transfer and verification of title and leasehold interest, ensuring that the farmer has the legal right to explore and operate the well. Overall, the Cook Illinois Farm out Agreement Providing For Single Well, with Dry Hole Earning An Assignment is a customized contractual arrangement designed to facilitate the exploration and drilling of a single well, while offering the potential for the farmer to earn an assignment in the event of a dry hole.Cook Illinois Farm out Agreement Providing For Single Well, with Dry Hole Earning An Assignment: The Cook Illinois Farm out Agreement Providing For Single Well, with Dry Hole Earning An Assignment is a contractual agreement commonly used in the oil and gas industry. This specific type of farm out agreement focuses on the drilling and exploration of a single well, with the provision for the earning of an assignment in case of a dry hole. In this agreement, the "armor" (the owner of the oil and gas lease or property) grants the "farmer" (the party seeking to drill and explore the well) the right to drill and operate a single well on the designated property. The farmer assumes the risks and costs associated with drilling, completion, and operation of the well. However, a distinguishing feature of the Cook Illinois Farm out Agreement Providing For Single Well, with Dry Hole Earning An Assignment is the provision for earning an assignment if the drilled well turns out to be a dry hole. A dry hole refers to a well that does not encounter any commercially viable quantities of oil or gas. In case of a dry hole, the farmer may earn an assignment, which means they can acquire a percentage of the working interest or ownership in the underlying property. The specific terms and conditions for earning this assignment are typically outlined within the agreement, including the percentage of working interest or ownership to be offered and the timeframe for exercising the option. Different variations or types of the Cook Illinois Farm out Agreement Providing For Single Well, with Dry Hole Earning An Assignment may include additional clauses or provisions, such as: 1. Commercial Discovery Clause: This clause specifies the criteria for a commercially viable discovery, determining the quantity and quality of oil or gas necessary for the well to be considered productive. 2. Dry Hole Assignment Terms: This section outlines the terms and conditions for earning the assignment in case of a dry hole, including the percentage of working interest to be acquired and any additional financial obligations. 3. Obligations and Responsibilities: The agreement may include a detailed description of the responsibilities and obligations of each party involved, such as the farmer's obligations to drill the well in a timely manner and the armor's obligations to provide necessary legal access and title documentation. 4. Title and Leasehold Interest: The agreement may address the transfer and verification of title and leasehold interest, ensuring that the farmer has the legal right to explore and operate the well. Overall, the Cook Illinois Farm out Agreement Providing For Single Well, with Dry Hole Earning An Assignment is a customized contractual arrangement designed to facilitate the exploration and drilling of a single well, while offering the potential for the farmer to earn an assignment in the event of a dry hole.
