Farm-out and cost oil allocation
Does anyone know how farming-out affects the cost and profit oil split between the partners?
More specifically, we have an E&P company with a PSC in a block containing several fields. The company uses the full-cost method and the fields are not ring-fenced, i.e. the CapEx are accumulated and reimbursed through the cost oil on a block, not field by field scale.
And then we have a partner farming in and acquiring a 50% working interest in one field in exchange for providing 100% of projected CapEx on this field. Is a separate CapEx pool is created for a new partner, and if yes, how the cost oil share of a new partner will be determined? Even if cost oil will be calculated separately for this field, it cannot be spli 50-50, because the original partner doesn't have CapEx at all on this field. And if the field remains not ring-fenced can the new partner claim a priority for the reimbursement of his CapEx over the rest of the block?
I see, it is a rather highly specialized question, but doesn't anyone know some resources where O&G specialized analysts communicate? Thanks in advance.