This lease rider form may be used when you are involved in a lease transaction, and have made the decision to utilize the form of Oil and Gas Lease presented to you by the Lessee, and you want to include additional provisions to that Lease form to address specific concerns you may have, or place limitations on the rights granted the Lessee in the “standard” lease form.
The Arizona Pugh Clause, also known as the Pugh Clause in Arizona, is a legal provision commonly used in oil and gas leases to determine how the termination or expiration of a lease affects the retention of mineral rights. This clause plays a crucial role in Arizona's oil and gas industry as it ensures clarity and efficiency in lease agreements. In Arizona, the Pugh Clause typically operates by requiring lessees to release certain portions of the leased premises upon termination or expiration of the lease that are not actively producing or held by production. This means that if a lessee fails to adhere to the requirements outlined in the Pugh Clause, they may lose their rights to any undeveloped areas within the leased property. The Arizona Pugh Clause is especially important when dealing with oil and gas leases that cover large areas or multiple formations. It allows for the separation of rights, preventing the lessee from holding onto unproductive acreage and tying up potential development opportunities for an extended period. One variant of the Arizona Pugh Clause is called the "Horizontal Pugh Clause." This type of clause specifically addresses horizontal drilling operations where oil and gas exploration occurs at multiple depths and formations. The Horizontal Pugh Clause stipulates the release of depths or formations unrelated to the producing well, thereby granting the lessor the freedom to lease those areas to other potential operators. Another example is the "Vertical Pugh Clause," which focuses on vertical drilling operations. It requires the lessee to release subterranean depths or formations that are not part of an actively producing well, allowing the lessor to explore potential development options for unused areas. Overall, the Arizona Pugh Clause ensures that leases remain in line with industry standards and practices, promoting efficient utilization of land resources. It protects the rights of both the lessee and lessor, preventing unnecessary delays in exploration and development while providing clarity regarding the retention of mineral rights.
