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 Oklahoma Pugh Clause is a legal provision often included in oil and gas leases in Oklahoma. It deals with the process of lease termination or release of certain portions of the leased land when production is not achieved or maintained on all or part of the premises. This clause aims to protect both the lessor and lessee by addressing the issue of leasehold acreage held solely for speculative purposes. Under the Oklahoma Pugh Clause, if production is not established on all the leased premises at the end of the primary term, or if production is established but subsequently ceases, the lessee is required to release or surrender any portions of the leased land that are not actively producing. This ensures that the lessor retains ownership of unproductive portions, which can then be made available for leasing to other parties. The Pugh Clause serves as a safeguard against lessees who might hold large acreage under lease without actively pursuing production, tying up valuable resources and preventing the lessor from leasing the unused portions to other operators. It promotes efficient exploration and production by encouraging lessees to focus only on the areas where they have successfully produced oil or gas. There are a few different types of Oklahoma Pugh Clauses that can be included in oil and gas leases, depending on the specific needs and preferences of the lessor and lessee: 1. Continuous Development Pugh Clause: This type of Pugh Clause stipulates that if the lessee fails to continuously operate or develop the leased premises, then all non-producing lands will be automatically released from the lease at the end of the primary term. This clause encourages the lessee to diligently pursue production by establishing an obligation to develop the entire leased area. 2. Vertical Pugh Clause: Under a Vertical Pugh Clause, if production ceases from specific depths of the leased land during the primary term, then those depths will be released from the lease while the remaining depths continue to be held by the lessee. This clause allows the lessor to reclaim unproductive areas while allowing the lessee to maintain rights to depths where production is still ongoing. 3. Horizontal Pugh Clause: A Horizontal Pugh Clause is similar to the vertical one but applies to horizontal well development. It allows the release of non-producing portions of the leased land after the primary term if the lessee fails to achieve or maintain production from horizontal wells. In conclusion, the Oklahoma Pugh Clause is a crucial provision in oil and gas leases in Oklahoma that safeguards the interests of both lessors and lessees. Its purpose is to prevent leasehold speculation and encourage efficient production. With various types of Pugh Clauses available, lessors and lessees can customize oil and gas leases to suit their specific needs and circumstances.The Oklahoma Pugh Clause is a legal provision often included in oil and gas leases in Oklahoma. It deals with the process of lease termination or release of certain portions of the leased land when production is not achieved or maintained on all or part of the premises. This clause aims to protect both the lessor and lessee by addressing the issue of leasehold acreage held solely for speculative purposes. Under the Oklahoma Pugh Clause, if production is not established on all the leased premises at the end of the primary term, or if production is established but subsequently ceases, the lessee is required to release or surrender any portions of the leased land that are not actively producing. This ensures that the lessor retains ownership of unproductive portions, which can then be made available for leasing to other parties. The Pugh Clause serves as a safeguard against lessees who might hold large acreage under lease without actively pursuing production, tying up valuable resources and preventing the lessor from leasing the unused portions to other operators. It promotes efficient exploration and production by encouraging lessees to focus only on the areas where they have successfully produced oil or gas. There are a few different types of Oklahoma Pugh Clauses that can be included in oil and gas leases, depending on the specific needs and preferences of the lessor and lessee: 1. Continuous Development Pugh Clause: This type of Pugh Clause stipulates that if the lessee fails to continuously operate or develop the leased premises, then all non-producing lands will be automatically released from the lease at the end of the primary term. This clause encourages the lessee to diligently pursue production by establishing an obligation to develop the entire leased area. 2. Vertical Pugh Clause: Under a Vertical Pugh Clause, if production ceases from specific depths of the leased land during the primary term, then those depths will be released from the lease while the remaining depths continue to be held by the lessee. This clause allows the lessor to reclaim unproductive areas while allowing the lessee to maintain rights to depths where production is still ongoing. 3. Horizontal Pugh Clause: A Horizontal Pugh Clause is similar to the vertical one but applies to horizontal well development. It allows the release of non-producing portions of the leased land after the primary term if the lessee fails to achieve or maintain production from horizontal wells. In conclusion, the Oklahoma Pugh Clause is a crucial provision in oil and gas leases in Oklahoma that safeguards the interests of both lessors and lessees. Its purpose is to prevent leasehold speculation and encourage efficient production. With various types of Pugh Clauses available, lessors and lessees can customize oil and gas leases to suit their specific needs and circumstances.
