---
title: "Flag farmout clauses against the federal lease transfer rules"
url: "https://ailawframework.com/practice/energy-resources-and-mining/review-a-joa-or-farmout-for-ai-flagged-anomalies/united-states"
type: "task_jurisdiction_version"
site: "AI Law Framework"
id: "A13-B6-4-US"
practice_area: "Energy, Resources & Mining"
tier: "yellow"
lawyer_review: "required"
jurisdictions: ["US"]
last_reviewed: "2026-10-22"
---

# Flag farmout clauses against the federal lease transfer rules

> In the joint operating agreement or farmout, flag a clause that assigns a separate zone, deposit, depth, formation, specific well, or part of a legal subdivision, or that states the transferee's rights are recognized…

Canonical page: https://ailawframework.com/practice/energy-resources-and-mining/review-a-joa-or-farmout-for-ai-flagged-anomalies/united-states  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Energy, Resources & Mining](https://ailawframework.com/practice/energy-resources-and-mining.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| How AI is used | In the joint operating agreement or farmout, flag a clause that assigns a separate zone, deposit, depth, formation, specific well, or part of a legal subdivision, or that states the transferee's rights are recognized before the authorized officer approves the transfer. Quote the clause and the page. Do not say the clause is effective. |
| What the lawyer must review | 43 C.F.R. 3106.10(c) provides that an assignment of a separate zone, deposit, depth, formation, specific well, or of part of a legal subdivision will be denied. Paragraph (f) provides that the rights of the transferee to a lease or an interest in it will not be recognized by the Department until the transfer has been approved by the authorized officer. Section 3106.71 provides that the BLM will not approve an assignment of record title or a transfer of operating rights if any party in interest is not a qualified lessee or if the bond is insufficient, and that approval is for administrative purposes only and does not warrant or certify title. 30 U.S.C. 226 is the leasing statute for the federal oil and gas lease the instrument may affect. The lawyer decides whether any flagged clause is a transfer that must be filed and whether it matches the regulation. The flag does not decide that. |
| Written for | United States |
| Applies to | [Review a JOA or farmout for AI-flagged anomalies](https://ailawframework.com/practice/energy-resources-and-mining/review-a-joa-or-farmout-for-ai-flagged-anomalies.md) |

## Checking plan

- What the AI does: In the joint operating agreement or farmout, flag a clause that assigns a separate zone, deposit, depth, formation, specific well, or part of a legal subdivision, or that states the transferee's rights are recognized before the authorized officer approves the transfer. Quote the clause and the page. Do not say the clause is effective.
- Basis: Checked against the linked sources on 22 October 2026. Confirm the current instrument before reliance.

## Notes

- A flag is not a statement that the BLM will deny or approve the instrument.
- The fee in 43 C.F.R. 3000.120 was not opened and is not stated.

## Sources

- [43 C.F.R. subpart 3106, Transfers by assignment, sublease, or otherwise](https://www.ecfr.gov/current/title-43/subtitle-B/chapter-II/subchapter-C/part-3100/subpart-3106) (checked 2026-10-22)
- [30 U.S.C. 226, Leasing of oil and gas parcels](https://www.law.cornell.edu/uscode/text/30/226) (checked 2026-10-22)

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*