Farmin / Farmout
An agreement under which the owner of a working interest in an oil and gas lease assigns a share of that interest to a third party in exchange for the third party's commitment to cover a portion of the capital expenditures. Generally, the assignee is required to perform seismic surveys or drill one or more wells in order to earn interest in the acreage. The assignee is said "to farmin" while the assignor is said "to farmout".
