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 North Dakota Pugh Clause is a legal term that refers to a specific provision often included in oil and gas leases in North Dakota. This clause is designed to protect both the landowner and the lessee in terms of lease duration and rights to the leased property. The primary purpose of the North Dakota Pugh Clause is to address the issue of lease termination and the release of leased lands that are not actively being utilized for the extraction of oil or gas. When an oil and gas lease is signed, it typically covers a specific land area or parcel. However, in many cases, the lessee only actively develops a portion of the leased land while leaving some lands unexplored. The North Dakota Pugh Clause serves to address this aspect by requiring that any land that is not included in a drilling unit or unitized for production must be released back to the lessor. This provision ensures that the landowner retains the right to lease unexplored areas to other interested parties or negotiate new lease agreements. There are different types of North Dakota Pugh Clause variations that may be encountered, including: 1. Continuous Development Pugh Clause: This type of Pugh Clause compels the lessee to continuously explore and develop the leased premises. If the lessee fails to maintain active drilling operations or production on any part of the leased land, the non-performing acreage is released back to the lessor. 2. Horizontal Pugh Clause: This variation specifically addresses horizontal drilling operations. It modifies the standard Pugh Clause by establishing that any drilled acreage not included in a horizontal drilling unit will be released upon the expiration of the primary term, allowing the landowner to pursue alternative leasing options. 3. Depth Pugh Clause: This type of Pugh Clause considers vertical drilling operations and focuses on the depth of the wells being drilled. If a lease agreement contains a depth Pugh Clause, it states that land below a specified depth that is not actively producing will be released at the end of the primary term, granting the landowner flexibility in further leasing arrangements. In summary, the North Dakota Pugh Clause is a crucial provision in oil and gas leases, protecting both the lessor and lessee. It ensures that undeveloped or non-producing land is released, allowing landowners to explore other lease opportunities while enabling lessees to focus their efforts on productive acreage. Variations such as Continuous Development, Horizontal, and Depth Pugh Clauses are used to address specific circumstances and lease operations in North Dakota.
