Choose Your Own Adventure: Farmouts of International Oil & Gas Interests and the AIPN 2019 Model Form -
When I teach about the Association of International Petroleum Negotiator’s (AIPN) Model International Farmout Agreement at AIPN’s courses, I tell the attendees that farmouts (and the model form) are a lot like a “choose your own adventure” book. For those of you who are not familiar with this literary genre, a “choose your own adventure” book is a style of children’s literature (particularly popular in the 1980s) written in the second person (i.e., from your viewpoint) that allows the reader to make decisions throughout the story for the protagonist and at each decision point the reader is directed to a different page (and a different outcome) depending on their answer.
Unlike other types of international oil & gas agreements, where, more or less, a standard scheme exists that one could study and apply best practices to in order to map out a reasonably straight-line approach, farmouts are for the imaginative and brave. They are a puzzle that can be put together in a hundred different ways, depending on country of operation, governing law of the agreement, terms of consideration, allocations of liability, timing of transfer(s), etc.
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