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Article | Resource

Why Do Oil & Gas Companies Do Farm-Out and Farm-In Agreements?

Fasken
Reading Time 1 minute read
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Overview

A farm-in has four basic characteristics. Firstly, one company (the seller) has a licence interest. Secondly, another company (the buyer) agrees to pay the seller’s costs for a particular activity, usually a well, perhaps a seismic programme. Thirdly, in return the seller transfers to the buyer part of the seller’s interest. Fourthly, the seller retains part of its interest.

Find out about:

  • What comprises a farm-in / farm-out agreement?
  • What motivates a company to create a farming-in or farming-out agreement? 
  • What are the main types of farm-ins?

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