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 Georgia Pugh Clause, also known as the Pugh Escalation Clause, is a legal provision often included in oil and gas leases in the state of Georgia. It determines how the termination of a lease affects the acreage covered by the lease. Keywords: Georgia, Pugh Clause, Pugh Escalation Clause, oil and gas lease, termination, acreage. In Georgia, the Pugh Clause is utilized to address the issue of partial termination in oil and gas leases. This clause helps in determining which portions of the lease will be terminated while allowing the remaining portions to continue. The primary purpose of the Georgia Pugh Clause is to prevent the practice of "lock-up" leases, where a lessee could potentially withhold large areas of unproductive land by holding only a minimal production area. By incorporating this clause, it ensures that the lessor has the opportunity to lease unused or non-producing acreage to other parties. There are two main types of Georgia Pugh Clauses often encountered in oil and gas leases. The first one is the "Vertical Pugh Clause," which dictates that when a well fails to produce in a specific vertical horizon or geological formation, it will lead to the termination of that particular depth interval or formation, while the other unaffected intervals will remain under lease. The second type is the "Horizontal Pugh Clause," which comes into play when portions of a horizontal well produce economic quantities of oil or gas, while other sections fail to do so. In this case, the Pugh Clause allows for the termination of the unproductive sections while preserving the leasehold rights for the productive sections. It is crucial for both lessors and lessees to fully understand and negotiate the terms of the Georgia Pugh Clause before entering into an oil and gas lease. This ensures clarity and fairness in determining the termination and retention of acreage, preventing any potential disputes or misunderstandings in the future. Overall, the Georgia Pugh Clause is a valuable provision in oil and gas leases that protects the interests of both parties involved, promotes efficient land utilization, and allows for the exploration and production of natural resources in the state.
