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Area Of Mutual Interest (AMI)

Area Of Mutual Interest (AMI)

What Does Area Of Mutual Interest Mean?

Area of mutual interest (AMI) is a defined geographic location wherein at least two oil or natural gas companies have a stake. An area of mutual interest (AMI) contract depicts the geographic area contained in the AMI, the rights of each party, (for example, the percentage interest allocated to each company), the agreement's term, and the way that contract provisions are to be carried out.

Figuring out Area Of Mutual Interest (AMI)

Area of mutual interest (AMI) contracts may likewise characterize how the gatherings in the agreement are permitted to investigate for or separate oil and natural gas an in the subject area. If any party to an AMI contract needs to seek after a venture in the predefined area, it must do as such related to or with the permission of different gatherings to the contract.

The primary purpose of an AMI is to guarantee that the companies mutually profiting from the exploration and development of the contract area are doing so jointly and proportionately. The AMI subsequently prevents one of the gatherings from using the data acquired through the joint development for its own gain. Moreover, the AMI advances cooperative behavior between companies by restricting competition among them to get extra rents encompassing the contract area.

Litigation Issues in AMI Agreements

AMI contracts are common devices for sharing risks of development, alongside the associated ownership and profits, among companies who need to investigate for oil and gas in a specific area jointly.

AMI contracts will generally be high quality by the gatherings engaged with the deal, and accordingly, frequently have accidental defects and results. AMI agreements commonly require any party that procures interest in the defined area to advise different gatherings about the acquisition. The notice permits the non-acquirers to choose to take part in the purchase.

Consenting to take part requires the non-acquirers to pay their percentage of the costs in exchange for a percentage of ownership. This means that even subsequent purchases of land, or interest on land, may bring about a company owing obligations to [investors](/financial backer) from AMI deals in the past.

Furthermore, courts have decided that land subject to an AMI agreement be adequately depicted inside the contract to recognize it to fulfill the Statute of Frauds. Companies must note that an area of mutual agreement must terminated in compose.


  • An area of mutual interest (AMI) agreement is a pact between at least two oil or natural gas companies.
  • AMI agreements will likewise explain the job of each party, their percentage ownership, and how contract provisions are to be carried out.
  • An AMI agreement covers a defined geographic location for a defined period of time.