Legal Definitions - acreage-contribution agreement

An acreage-contribution agreement is a type of support agreement in the oil and gas industry. It involves one party promising to grant leases or interests in leases in the area of a test well to the party who drills the test well. In exchange, the drilling party provides drilling or geological information if the test well is drilled to a certain depth.

For example, Company A may agree to contribute money or property to Company B if Company B will drill a well on leases that Company A holds. If Company B drills the well to the agreed-upon depth, they will provide Company A with information from the tests conducted. This agreement lessens the cost or risk of drilling operations for Company B, while Company A gains valuable geological or technological information.

Another example could be a group of investors agreeing to contribute funds to a drilling company in exchange for a share of the leases or interests in the area of the test well.

Overall, an acreage-contribution agreement is a way for parties in the oil and gas industry to work together to promote exploratory operations and share the risks and rewards of drilling.