Arizona Farmout - Horizontal Wells

State:
Multi-State
Control #:
US-OG-704
Format:
Word; 
Rich Text
Instant download

Description

Should any Party elect not to participate in any Horizontal Exploratory Well, other than the Initial Well proposed under the terms of the Agreement, the non-participating Party agrees to farmout to the participating Parties its interest.

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FAQ

A farmout is when a resource-producing property is outsourced for development to a third party or farmee. The farmee pays the owner (farmor) royalties on income generated from the outsourced activities. Farmouts are most common in natural resources exploration and extraction, such as with oil, gas, or minerals mining.

One example is where it is projected that the farmee will pay for 75% of the drilling costs, the parties may agree that upon meeting the earning barrier, the farmee will obtain a 75% interest in the acreage committed to the well, or even the entire contract area. Farmout Agreements: Key Decisions and Negotiation Points Oil and Gas Law Digest ? primers-insights ? far... Oil and Gas Law Digest ? primers-insights ? far...

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Arizona Farmout - Horizontal Wells