Farmout

Farmout

The assignment of part or all of an oil, natural gas or mineral interest to a third party. The interest may be in any agreed-upon form, such as exploration blocks or drilling acerage. The third party, called the "farmee," pays the farmor a sum of money up front for the interest and also commits to spending money to perform a specific activity related to the interest, such as operating oil exploration blocks, funding expenditures, testing or drilling. Income generated from the farmee’s activities will partly go to the farmor and partly go to the farmee in percentages determined by the agreement.

A company may decide to enter into a farmout agreement with a third party if it wants to maintain its interest but wants to reduce its risk or doesn't have the money to undertake the operations that are desirable for that interest. Farmout agreements give farmees a potential profit opportunity that they would not otherwise have access to. Government approval may be necessary before a farmout deal can be finalized.


Investment dictionary. . 2012.

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Look at other dictionaries:

  • farmout agreement — Under Title 11 U.S.C. Section 101: (21A) The term farmout agreement means a written agreement in which (A) the owner of a right to drill, produce, or operate liquid or gaseous hydrocarbons on property agrees or has agreed to transfer or assign… …   Glossary of Bankruptcy

  • farmout agreement — An agreement by which one who owns an oil and gas lease agrees to assign to another an interest in the lease in return for drilling and testing operations on the lease. Under standard farmout agreement farmout operator drills at his own expense… …   Black's law dictionary

  • farmout agreement — An agreement by which one who owns an oil and gas lease agrees to assign to another an interest in the lease in return for drilling and testing operations on the lease. Under standard farmout agreement farmout operator drills at his own expense… …   Black's law dictionary

  • farmout — /fahrm owt /, n. 1. an act or instance of farming out or leasing, as land for oil exploration. 2. something farmed out. [n. use of v. phrase farm out] * * * …   Universalium

  • farmout — ˈ ̷ ̷ˌ ̷ ̷ noun ( s) Etymology: farm out : a sublease granted by an oil company to another for drilling on partially proven ground * * * /fahrm owt /, n. 1. an act or instance of farming out or leasing, as land for oil exploration. 2. something… …   Useful english dictionary

  • разновидность соглашения о фармауте — Оно предусматривает, что фарми приобретает право на скважину и на добываемые углеводороды, однако лицензионное право остается за фармором; фармор имеет право бурить на лицензионной территории другие скважины или углублять скважину (см. farmout… …   Справочник технического переводчика

  • Premier Oil — is an independent UK oil company with gas and oil interests in the UK,Asia and Africa. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. It is a relatively small company, devoted entirely to the upstream sector …   Wikipedia

  • Rednex — en concert Pays d’origine …   Wikipédia en Français

  • арендуемый участок — — [http://slovarionline.ru/anglo russkiy slovar neftegazovoy promyishlennosti/] Тематики нефтегазовая промышленность EN farmout …   Справочник технического переводчика

  • двухэтапный фармаут — Контракт, согласно которому сторона, выполняющая работы на первом этапе, напр. сейсмические исследования или бурение, имеет право далее переуступить свои права (юр.) [http://slovarionline.ru/anglo russkiy slovar neftegazovoy promyishlennosti/]… …   Справочник технического переводчика

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