Alberta Farmout Agreement

Prepare a Farmout Agreement for oil and gas properties in Alberta with this template document.

• The farmor will commence drilling of the test well at its sole cost and risk. The farmee will then continue drilling to the contract depth, log and test, and either complete, equip or abandon the test well in accordance with the agreement.
• If the interest of a party becomes encumbered, such encumbrance will be charged to and paid by that party.
• The farmee will reimburse the farmor on a per diem basis for rentals and penalties payable under the title document.
• The farmee's earned interest in the farmout lands is calculated as 100% of the farmor's interest in the producing zones, and 50% of the remainder of the lands.
• Rights and remedies of each party in the event of default.