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.
Travis Texas Farm out Agreement Providing for Single Well, with Dry Hole Earning an Assignment The Travis Texas Farm out Agreement Providing for Single Well, with Dry Hole Earning an Assignment is a contractual agreement between an oil and gas operator (the "Assignor") and a third party (the "Assignee") for the exploration and development of specific oil and gas leasehold interests in Travis County, Texas. This agreement outlines the terms and conditions that govern the drilling and subsequent activities related to a single well, while also addressing the possibility of the well-being deemed a dry hole. In this farm out agreement, the Assignor grants the Assignee the right to drill a single well on a designated tract of land within the leased premises. The Assignee assumes the responsibility for all costs associated with drilling and completing the well, as well as any subsequent production operations, subject to the provisions outlined in the agreement. One key aspect of this agreement is the provision for a dry hole. In the event that the well is determined to be a dry hole, meaning it does not yield any commercially viable quantities of oil or gas, the Assignee may request an assignment of a portion of the Assignor's interest in the leasehold. This assignment allows the Assignee to earn a portion of the Assignor's working interest in the original lease, providing them with the opportunity to recoup some costs incurred during the drilling phase. It is important to note that there may be variations of the Travis Texas Farm out Agreement Providing for Single Well, with Dry Hole Earning an Assignment. These variations may include different terms related to cost allocation, drilling obligations, earning thresholds for assignment, timing requirements, and other specific provisions that can be negotiated between the Assignor and Assignee. The Travis Texas Farm out Agreement Providing for Single Well, with Dry Hole Earning an Assignment is a commonly used agreement in the oil and gas industry, allowing operators to mitigate the financial risks associated with drilling a single well by sharing the costs and potential upside with a third party.Travis Texas Farm out Agreement Providing for Single Well, with Dry Hole Earning an Assignment The Travis Texas Farm out Agreement Providing for Single Well, with Dry Hole Earning an Assignment is a contractual agreement between an oil and gas operator (the "Assignor") and a third party (the "Assignee") for the exploration and development of specific oil and gas leasehold interests in Travis County, Texas. This agreement outlines the terms and conditions that govern the drilling and subsequent activities related to a single well, while also addressing the possibility of the well-being deemed a dry hole. In this farm out agreement, the Assignor grants the Assignee the right to drill a single well on a designated tract of land within the leased premises. The Assignee assumes the responsibility for all costs associated with drilling and completing the well, as well as any subsequent production operations, subject to the provisions outlined in the agreement. One key aspect of this agreement is the provision for a dry hole. In the event that the well is determined to be a dry hole, meaning it does not yield any commercially viable quantities of oil or gas, the Assignee may request an assignment of a portion of the Assignor's interest in the leasehold. This assignment allows the Assignee to earn a portion of the Assignor's working interest in the original lease, providing them with the opportunity to recoup some costs incurred during the drilling phase. It is important to note that there may be variations of the Travis Texas Farm out Agreement Providing for Single Well, with Dry Hole Earning an Assignment. These variations may include different terms related to cost allocation, drilling obligations, earning thresholds for assignment, timing requirements, and other specific provisions that can be negotiated between the Assignor and Assignee. The Travis Texas Farm out Agreement Providing for Single Well, with Dry Hole Earning an Assignment is a commonly used agreement in the oil and gas industry, allowing operators to mitigate the financial risks associated with drilling a single well by sharing the costs and potential upside with a third party.
