Farmout
When someone strikes economic gold on their land (oil, natural gas, or celebrity minerals), the owner can lease out the area to a company to extract all of those old dinosaur bones or what-have-you, via a “farmout.”
The owner is the “farmor,” who gets money from the extraction company, called the “farmee.” Usually, the farmor gets a wad of cash up front, as well as interest (think: royalty payments). The farmee gets a certain percentage after other costs are taken into account (like the costs of drilling a well or fracking or whatever extraction method). All of these details are laid out in the farmout agreement.
Besides the value from the things extracted, both farmors and farmees share risk and gain geological knowledge of the area, which can help both of them (the farmor because it’s their land, and the farmee since it could help them identify other potential farmors sitting on untapped dino bones/gassy gas/minerals).
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Finance: What is a windfall?2 Views
Finance Allah Shmoop What is Ah windfall Waterfall snowfall pratfall
that none of those are what we're talking about here
So what's a windfall Well it's an incredible unexpected sudden
fortune usually of the dolla dolla bill variety like you're
at the blackjack table and you think you're only about
to win fifteen bucks for that hand But it turns
out you just won the casinos one million hand and
suddenly you're surrounded by streamers and confetti and heavily made
up women in rhinestone studded dresses And well you're being
handed a massive check for one million dollars Yeah you
should probably not double down or you bought a Powerball
ticket on a whim You usually never waste your money
on these things But you had a single that was
just burning a hole in your pocket And you were
bored while you were waiting in line at the Quickie
Mart there So you took a shot and you scored
and now you're set for life Huge windfall Yeah Final
example You were employee number eight at Google and you
decide to finally cash in your stock options Less of
a windfall and more of a sky fall there but
well it might be time to do a Google search
for how much does it cost to buy your own 00:01:17.84 --> [endTime] island Yeah that's a good one