Out of water -- area reduced to dust (7)
I believe the answer is:
aground
'out of water' is the definition.
(I've seen this before)
'area reduced to dust?' is the wordplay.
'area reduced' becomes 'a' (maths abbreviation; 'reduced' suggests a short form).
'to dust?' becomes 'ground' (dust is a kind of ground).
'a'+'ground'='AGROUND'
(Other definitions for aground that I've seen before include "(Of a ship) stuck on the seabed" , "(Of ship) not floating" , "on rocks, perhaps" , "having hit rock bottom, perhaps" , "Like a stranded ship" .)