Analysis of the widely used Farmout Agreement and how it is typically distinguished from other agreements and relationships. Topics include undivided interests, farmouts combined with other agreements, limitations as to depth or formation, assignments, drilling requirements, “back- in” provisions, and carried interests. Costs recoverable by the Farmee are discussed such as blowout expenses, interest on expenditures for mineral exploration expenses, and key definitions such as “payout” are discussed. We will look at the history of the AAPL model form operating agreements, including limitations and ways of avoiding problems with their use. We will cover joint operations, duties of the operator, relationship and duties to non-operators, joint operations under pooling and unitization, property provisions including preferential purchase rights, general joint operations provisions, liabilities of the parties, cost overruns, COPAS overhead litigation, loss of lease rights, non-consent issues, insurance, and other risk management issues.