This ia a provision that states that any Party receiving a notice proposing to drill a well as provided in Operating Agreement elects not to participate in the proposed operation, then in order to be entitled to the benefits of this Article, the Party or Parties electing not to participate must give notice. Drilling by the parties who choose to participate must begin within 90 days of the notice.
Virgin Islands Farm out by Non-Consenting Party: A Virgin Islands Farm out by Non-Consenting Party refers to a specific agreement or arrangement in the oil and gas industry, particularly in the Virgin Islands region, where a non-consenting party (individual or company) is allowed to acquire an interest in an existing petroleum lease or development but is not actively involved in the exploration or production activities. This arrangement is common when a party, either due to financial constraints or other reasons, decides not to participate in the drilling operations of a well. In a Virgin Islands Farm out, the non-consenting party essentially sells or assigns a portion of its working interest to a third party, typically referred to as the farmer. The farmer agrees to drill and develop an allocated portion of the lease or development area in exchange for acquiring the non-consenting party's interest. The Virgin Islands Farm out by Non-Consenting Party can have different types, such as: 1. Voluntary Farm out: This occurs when a non-consenting party willingly decides not to participate in a drilling operation and offers its interest to a farmer. The farmer, in return, assumes the financial and operational responsibilities to explore and develop the agreed-upon area. 2. Involuntary Farm out: In some cases, when a non-consenting party fails to participate in an operation within a specified timeframe or does not meet certain obligations, the operator of the lease or development area has the right to force a farm out. This type of farm out ensures that the lease or development progresses without delay and maximizes the potential of the project. 3. Carry Farm out: A carry farm out is a type of arrangement where the farmer not only acquires the non-consenting party's interest but also covers all costs associated with the exploration, drilling, and development activities. In return, the farmer receives a higher share of the revenue generated from the production. 4. Partial Farm out: In a partial farm out, the non-consenting party sells or assigns only a portion of its working interest to the farmer. This allows the non-consenting party to retain some involvement in the project while sharing the financial burden and risks with the farmer. Virgin Islands Farm out by Non-Consenting Party plays a crucial role in the efficient utilization of oil and gas leases or development areas by allowing willing participants to acquire interests and assume responsibilities for exploration and production activities. It also provides an opportunity for non-consenting parties to monetize their interests without actively participating or incurring the associated risks and costs.
