A Flask is a Drinking Vessel used to gather and store store up 1 liter of any liquid. This Vessel can be equipped to the left hand slot and used to Drink and Sip liquids.
A Drinking Vessel can be filled with Consumable Liquids. There are currently 3 different Drinking Vessels in the New World; Barkcups which can hold .2 liters, Flasks which can hold 1 liter, and Goat Horns which hold up to 1.5 liters. Drinking Vessels can be equipped to the left hand slot and used to Drink or Sip consumable liquids.
Right clicking on an equipped Drinking Vessel will give you the option to either Sip, Drink, or Empty. Choosing Sip will take one pull off the Vessel, reducing the amount by .10 liters. Choosing the Drink option will cause you to Sip over and over again until the action is interrupted or the Vessel is empty. Choosing Empty will dump the entire contents of the Drinking Vessel.
To fill a Vessel with Potable Water, click it to pick it up from your inventory and right-click The Shallows. Note: Do not left-click otherwise you will lose your Vessel!
To fill or empty your Vessel into a Barrel, Press, or another Vessel, select it from your inventory and right-click the other Vessel. You can get rid of the contents of a Vessel by right-clicking it and selecting "Empty". An empty Vessel, or one containing the same liquid must be in your inventory when Draining any Animal Hearts, Honeycomb, Leeches, Cracking Any Poultry Egg, or Melting Packed Snow otherwise the liquid will be lost. Liquids of the same type can be combined so long as there is room in the Vessel, but generally, liquids of differing types cannot.