Natural resources development, an agreement between a government and a company in which the government awards to the company the right to extract and develop a natural resource (for example, mineral ore or oil). Under a PSA, the company bears the financial risk of exploring and extracting the resource. If no oil or mineral ore is found, the company receives no compensation for any work it may have done or costs it may have incurred. If the company is successful in extracting the resource, it is entitled to recoup its capital and operational expenditures. Once these costs are recouped, any profit is shared between the government and the company at a pre-agreed percentage.

US oil & gas operations, an agreement between an oil & gas operator and interest owners in one or more horizontal wells that produce from multiple oil & gas leases or pooled units. In this context, PSAs specify how oil and gas are allocated to each lease or pooled unit. They may also address other subjects including surface use rights, perpetuation of oil & gas leases, and implied covenants. For more information on permitting PSA wells in Texas, see Practice Note, Railroad Commission of Texas Regulation of Oil & Gas Drilling and Production: Allocation and Production Sharing Wells.