Farmout Agreements Explained (with 4 examples)

farmoutFarmout agreements (also known as farm-out agreements) are type of agreement that specific to the oil and gas industry wherein an owner (the “farmor”) of a mineral lease (or multiple mineral leases) agrees to give a percentage of said ownership to another company (the “farmee”) in exchange for providing services. It is important to note that farmout agreements are distinct from conventional transactions between lessees in the oil and gas industry because the consideration is the rendering of services, not money. Another similar agreement is a Purchase and Sale Agreement, however, here again, the farmout agreement is distinct because the transfer of assets (in exchange for services) may not happen until a later date, usually when an agreed upon “earning barrier” has been met.

 

Here are 4 farm-out agreements currently available on RealDealDocs.com:

1) Farm-Out agreement

IVANHOE ENERGY INC

RICHFIRST HOLDINGS LIMITED

PAN-CHINA RESOURCES LTD.

SUNWING ENERGY LTD

 

2) Farm-Out Agreement

LA CORTEZ ENERGY, INC.

Emerald Energy Plc

 

3) Farm-Out Agreement

AMERICAN EAGLE ENERGY CORP

American Eagle Energy Corporation

American Eagle Energy Inc

AMZG, Inc

USG Properties Bakken I, LLC

 

4) Seismic Data Acquisition and Farm Out Agreement

TRANS ENERGY INC

 

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