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.
A Phoenix Arizona Farm out Agreement Providing For Single Well, with Dry Hole Earning An Assignment is a contractual arrangement between two parties in the oil and gas industry. Generally, this type of agreement is formed when an experienced operator (the armor) agrees to assign a portion of their working interest in an oil or gas well to another party (the farmer) in exchange for the farmer's financial and operational contribution to drilling and completion activities. In a Farm out Agreement Providing For Single Well, with Dry Hole Earning An Assignment, the key terms and conditions typically include: 1. Working Interest Assignment: The armor grants a portion of their working interest in the identified well to the farmer. The working interest represents the ownership share in oil or gas production and related costs. 2. Exploration and Development Commitments: The farmer agrees to drill, complete, and test a single well within a specified timeframe. The drilling location and target formation are predetermined. The obligation to drill usually involves substantial financial investment, including both initial drilling costs and ongoing operational expenses. 3. Dry Hole Provision: In the event that the well drilled by the farmer is determined to be a "dry hole," meaning it does not yield commercial amounts of oil or gas, the farmer may be entitled to earn an assignment of a portion of the armor's interest in a different well within an agreed area or field. This provision provides the farmer with an opportunity to recoup their investment by participating in a potentially more promising well. 4. Earning and Assignment: Should the farmer drill a successful well, the armor may assign a portion of their working interest to the farmer, proportionate to the farmer's investment and in accordance with agreed terms. The assignment serves as a reward for the farmer's successful drilling efforts and acts as compensation for their financial commitments. It's worth noting that variations of Phoenix Arizona Farm out Agreement Providing For Single Well, with Dry Hole Earning An Assignment might exist, differing in specific conditions and provisions tailored to the needs of the parties involved and the geographic location of the well. These variations reflect unique circumstances and considerations, such as different drilling targets, geography, and geological conditions. Furthermore, other types of farm out agreements might also be formed, such as those providing for multiple wells, offset wells, or specific zones within a field. These agreements would have their own set of terms and conditions, including provisions related to earning assignments and potential dry holes.A Phoenix Arizona Farm out Agreement Providing For Single Well, with Dry Hole Earning An Assignment is a contractual arrangement between two parties in the oil and gas industry. Generally, this type of agreement is formed when an experienced operator (the armor) agrees to assign a portion of their working interest in an oil or gas well to another party (the farmer) in exchange for the farmer's financial and operational contribution to drilling and completion activities. In a Farm out Agreement Providing For Single Well, with Dry Hole Earning An Assignment, the key terms and conditions typically include: 1. Working Interest Assignment: The armor grants a portion of their working interest in the identified well to the farmer. The working interest represents the ownership share in oil or gas production and related costs. 2. Exploration and Development Commitments: The farmer agrees to drill, complete, and test a single well within a specified timeframe. The drilling location and target formation are predetermined. The obligation to drill usually involves substantial financial investment, including both initial drilling costs and ongoing operational expenses. 3. Dry Hole Provision: In the event that the well drilled by the farmer is determined to be a "dry hole," meaning it does not yield commercial amounts of oil or gas, the farmer may be entitled to earn an assignment of a portion of the armor's interest in a different well within an agreed area or field. This provision provides the farmer with an opportunity to recoup their investment by participating in a potentially more promising well. 4. Earning and Assignment: Should the farmer drill a successful well, the armor may assign a portion of their working interest to the farmer, proportionate to the farmer's investment and in accordance with agreed terms. The assignment serves as a reward for the farmer's successful drilling efforts and acts as compensation for their financial commitments. It's worth noting that variations of Phoenix Arizona Farm out Agreement Providing For Single Well, with Dry Hole Earning An Assignment might exist, differing in specific conditions and provisions tailored to the needs of the parties involved and the geographic location of the well. These variations reflect unique circumstances and considerations, such as different drilling targets, geography, and geological conditions. Furthermore, other types of farm out agreements might also be formed, such as those providing for multiple wells, offset wells, or specific zones within a field. These agreements would have their own set of terms and conditions, including provisions related to earning assignments and potential dry holes.
