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.
The Lima Arizona Farm out Agreement — Short Form is a legal document that outlines the terms and conditions of a farming-out arrangement between two parties for the exploration and development of an oil or gas property located in Lima, Arizona. Keywords: Lima Arizona, farm out agreement, short form, legal document, exploration, development, oil, gas, property. 1. Introduction: The Lima Arizona Farm out Agreement — Short Form is a legally binding document that formalizes the arrangement between the armor (property owner) and the farmer (explorer) for the transfer of a portion of the working interest in the oil or gas property. 2. Purpose: The primary objective of this agreement is to define the rights, obligations, and responsibilities of both parties involved in the exploration and development of the Lima, Arizona property. 3. Scope: This short form of the Lima Arizona Farm out Agreement is specifically designed for a streamlined and concise representation of the key terms and conditions, suitable for straightforward and uncomplicated farm out transactions. 4. Key Terms and Conditions: The agreement covers essential aspects such as the description of the property, the percentage of working interest being farmed out, the obligations of the armor and the farmer, the timeline for the exploration and development activities, and the payment structure, including any upfront consideration, carry obligations, and royalties. 5. Consideration: The farmer typically provides consideration to the armor, which may include cash payments, drilling obligations, seismic operations, or other valuable consideration in exchange for the opportunity to explore and exploit the oil or gas reserves on the property. 6. Duration and Termination: The agreement specifies the duration of the farm out arrangement and the conditions under which either party can terminate the agreement, including defaults, non-performance, or breaches of the agreed-upon terms. Types of Lima Arizona Farm out Agreement — Short Form: a) Simple Farm out Agreement: This type of short-form agreement is suitable for basic farm out transactions that involve minimal complexities or additional provisions. b) Modified Farm out Agreement: This variation includes modifications or additional clauses tailored to specific circumstances or unique requirements of the parties involved, which may not be covered in the simple form. c) Multi-Party Farm out Agreement: In cases where multiple parties are involved, a separate short form is often used that accounts for the interests, obligations, and responsibilities of each party, providing a clear framework for a complex farm out arrangement. In summary, the Lima Arizona Farm out Agreement — Short Form is a concise legal document that outlines the terms and conditions of a farming-out arrangement for the exploration and development of an oil or gas property in Lima, Arizona. Whether simple or modified, this agreement governs the rights and obligations of both the armor and the farmer, providing a clear framework to facilitate the efficient and successful execution of the farm out transaction.The Lima Arizona Farm out Agreement — Short Form is a legal document that outlines the terms and conditions of a farming-out arrangement between two parties for the exploration and development of an oil or gas property located in Lima, Arizona. Keywords: Lima Arizona, farm out agreement, short form, legal document, exploration, development, oil, gas, property. 1. Introduction: The Lima Arizona Farm out Agreement — Short Form is a legally binding document that formalizes the arrangement between the armor (property owner) and the farmer (explorer) for the transfer of a portion of the working interest in the oil or gas property. 2. Purpose: The primary objective of this agreement is to define the rights, obligations, and responsibilities of both parties involved in the exploration and development of the Lima, Arizona property. 3. Scope: This short form of the Lima Arizona Farm out Agreement is specifically designed for a streamlined and concise representation of the key terms and conditions, suitable for straightforward and uncomplicated farm out transactions. 4. Key Terms and Conditions: The agreement covers essential aspects such as the description of the property, the percentage of working interest being farmed out, the obligations of the armor and the farmer, the timeline for the exploration and development activities, and the payment structure, including any upfront consideration, carry obligations, and royalties. 5. Consideration: The farmer typically provides consideration to the armor, which may include cash payments, drilling obligations, seismic operations, or other valuable consideration in exchange for the opportunity to explore and exploit the oil or gas reserves on the property. 6. Duration and Termination: The agreement specifies the duration of the farm out arrangement and the conditions under which either party can terminate the agreement, including defaults, non-performance, or breaches of the agreed-upon terms. Types of Lima Arizona Farm out Agreement — Short Form: a) Simple Farm out Agreement: This type of short-form agreement is suitable for basic farm out transactions that involve minimal complexities or additional provisions. b) Modified Farm out Agreement: This variation includes modifications or additional clauses tailored to specific circumstances or unique requirements of the parties involved, which may not be covered in the simple form. c) Multi-Party Farm out Agreement: In cases where multiple parties are involved, a separate short form is often used that accounts for the interests, obligations, and responsibilities of each party, providing a clear framework for a complex farm out arrangement. In summary, the Lima Arizona Farm out Agreement — Short Form is a concise legal document that outlines the terms and conditions of a farming-out arrangement for the exploration and development of an oil or gas property in Lima, Arizona. Whether simple or modified, this agreement governs the rights and obligations of both the armor and the farmer, providing a clear framework to facilitate the efficient and successful execution of the farm out transaction.
