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 Minnesota Pugh Clause is an essential provision often found in oil and gas leases, specifically in relation to the termination of oil and gas rights. It involves a provision that controls the surrender and release of lands not included in a producing or drilling unit. By including the Minnesota Pugh Clause in the lease agreement, it ensures that only the leased area that is actively producing or drilling will be held, while releasing the remaining acreage back to the lessor. In Minnesota, there are two common types of Pugh Clauses typically utilized in oil and gas leases: Standard Pugh Clause and Horizontal Pugh Clause. The Standard Pugh Clause, also known as the "Vertical Pugh Clause," focuses on vertical depth. Under this clause, the lease will automatically terminate for all depths below the producing formation or the deepest zone that is commercially viable. This means that if only a portion of the leased land is productive, the lessee must release the non-producing depths. On the other hand, the Horizontal Pugh Clause, also referred to as the "Depth Severance Clause," emphasizes the horizontal extent of the lease. It ensures that the lessee does not retain the entire leased area if only a specific portion is producing or being actively developed horizontally. The horizontally non-productive parts of the lease are released, while the productive sections will continue to be held. The primary objective of these Pugh Clauses is to prevent leasing companies from holding vast acreages without actively exploring or developing the non-producing parts. It allows landowners to reclaim possession of their land or lease it to other parties who may be interested in participating in oil and gas exploration. In conclusion, the Minnesota Pugh Clause is a crucial provision in oil and gas leases. It dictates the surrender and release of non-producing lands, thus ensuring that only the productive sections are held. The two main types of Minnesota Pugh Clauses are the Standard Pugh Clause, which considers vertical depth, and the Horizontal Pugh Clause, which focuses on the horizontal extent of the lease. By incorporating these clauses, landowners can maintain control over their property and prevent the unnecessary tying up of non-producing acreage.
The Minnesota Pugh Clause is an essential provision often found in oil and gas leases, specifically in relation to the termination of oil and gas rights. It involves a provision that controls the surrender and release of lands not included in a producing or drilling unit. By including the Minnesota Pugh Clause in the lease agreement, it ensures that only the leased area that is actively producing or drilling will be held, while releasing the remaining acreage back to the lessor. In Minnesota, there are two common types of Pugh Clauses typically utilized in oil and gas leases: Standard Pugh Clause and Horizontal Pugh Clause. The Standard Pugh Clause, also known as the "Vertical Pugh Clause," focuses on vertical depth. Under this clause, the lease will automatically terminate for all depths below the producing formation or the deepest zone that is commercially viable. This means that if only a portion of the leased land is productive, the lessee must release the non-producing depths. On the other hand, the Horizontal Pugh Clause, also referred to as the "Depth Severance Clause," emphasizes the horizontal extent of the lease. It ensures that the lessee does not retain the entire leased area if only a specific portion is producing or being actively developed horizontally. The horizontally non-productive parts of the lease are released, while the productive sections will continue to be held. The primary objective of these Pugh Clauses is to prevent leasing companies from holding vast acreages without actively exploring or developing the non-producing parts. It allows landowners to reclaim possession of their land or lease it to other parties who may be interested in participating in oil and gas exploration. In conclusion, the Minnesota Pugh Clause is a crucial provision in oil and gas leases. It dictates the surrender and release of non-producing lands, thus ensuring that only the productive sections are held. The two main types of Minnesota Pugh Clauses are the Standard Pugh Clause, which considers vertical depth, and the Horizontal Pugh Clause, which focuses on the horizontal extent of the lease. By incorporating these clauses, landowners can maintain control over their property and prevent the unnecessary tying up of non-producing acreage.
