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 New Jersey Pugh Clause, also referred to as the "Pugh provision," is a legal provision commonly used in oil and gas leases in the state of New Jersey. This clause is designed to ensure the efficient and comprehensive development of a property's oil and gas resources. By understanding the intricacies of the New Jersey Pugh Clause, landowners and developers can protect their rights and interests in oil and gas exploration. The purpose of the New Jersey Pugh Clause is to sever the portions of a leased property that are not actively being used for oil and gas production or exploration. It essentially allows landowners to reclaim or maintain ownership of certain areas of their property that have not been included in a production unit. This is particularly important when the initial lease agreement covers a large land area that may not be fully exploited for oil or gas extraction. Different types or variations of the New Jersey Pugh Clause may exist, each with its own specificities. These variations often depend on the particular lease agreement and negotiation between the landowner or lessor and the oil and gas company or lessee. However, two common types of New Jersey Pugh Clauses are worth mentioning: 1. Standard Pugh Clause: This is the most common form of the New Jersey Pugh Clause. It allows the landowner to retain ownership rights and lease any portion of the property not included in a production unit. This means that if only a part of the leased land is actively producing oil or gas, the rest can be freed from the lease and made available for other purposes, such as agricultural or residential use. 2. Modified Pugh Clause: In certain cases, landowners or lessors may negotiate a modified version of the New Jersey Pugh Clause. This variation may include additional requirements or provisions, such as the minimum acreage or timeframe for which a property must remain active in production before the clause takes effect. The modified Pugh Clause provides flexibility for landowners while still ensuring uninterrupted lease activity. In conclusion, the New Jersey Pugh Clause is an essential provision in oil and gas leases, aimed at safeguarding the rights of landowners and facilitating efficient exploration and production operations. Through its different variations, such as the standard and modified Pugh Clauses, this legal provision enables landowners to protect their interests in areas not actively utilized for oil and gas extraction.
