Drilling & WellsVerified
farm out meaning in oil and gas
farm out means Jargon, not a TLA. Commercial arrangement where a licence holder contracts with a third party for the third part to carry out work on the licence e.g. drill an exploration well and by so doing the third…
Definition
Jargon, not a TLA
Commercial arrangement where a licence holder contracts with a third party for the third part to carry out work on the licence e.g. drill an exploration well and by so doing the third parties earns an interest in the licence. From the perspective of the existing licence holder he is "farming out" an interest in the licence; the third party is "farming in"