Legal Definitions - bottom-hole agreement

A bottom-hole agreement is a type of support agreement in the oil and gas industry. It involves one party agreeing to provide cash or other resources to another party in exchange for geological or drilling information if a well is drilled to a certain depth.

For example, Company A may agree to contribute money to Company B if Company B drills a well on a lease that it holds and provides Company A with information from tests conducted. If the well is drilled to the agreed depth, Company B will receive the contribution from Company A.

This type of agreement is beneficial for both parties. Company A gets access to valuable information that can help with future drilling operations, while Company B receives financial support that can help offset the costs and risks of drilling.