RE: Farm IN not OUT16 Mar 2026 08:52
Key Aspects of Farm-In/Farm-Out
Farmor (Seller): Typically an owner of a lease who wants to reduce costs, spread risk, or obtain technical knowledge without paying for drilling.
Farmee (Buyer): A company that "farms in" to a project, providing cash or technical services (like drilling a well) in exchange for ownership interest.
Why they do it: This method allows companies to share high exploration risks, reduce financial exposure, and allow operators to develop fields when they lack the immediate capital.
Mechanism: Often, a farmor with 100% interest will transfer a 50% interest to a farmee, who then pays for a "drilling carry" to drill a well on that land.