‘And Abraham set seven ewe lambs of the flock by themselves. And Abimelech said to Abraham “What do these seven ewe lambs which you have set by themselves mean?” And he said, “You will take these seven ewe lambs of my hand that it may be a witness to me that I have dug this well”.'
The well is so important that Abraham wants it confirmed by a specific ceremony. The ceremony does not necessarily mean that Abimelech does not know the significance of the seven lambs. Indeed we are probably to recognise that he does. There is no point in a ceremony if it is not understood. They are going through the formal ceremony in a generally recognised procedure with stereotyped questions and answers. Abraham sets aside the ewe lambs, Abimelech asks what they mean, then Abraham confirms their significance.
So a solemn agreement is concluded within the larger covenant. It was an ancient custom that the acceptance of a gift included recognition of the just claim of the giver.
The seven ewe lambs were probably intended to signify the whole price paid by Abraham in Genesis 21:27, seven being the number of divine perfection and completeness. Alternately they may have been the price paid for use of the specific well. From now on both sides will recognise that the well has been dug by, and its use officially guaranteed to, Abraham and his group.