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.
A Pugh Clause, also known as a Pugh provision, is a legal term widely used in the oil and gas industry, especially in Pennsylvania. It is an important provision found in oil and gas leases that determines how the lease should be divided or terminated concerning the exploration and production of hydrocarbons. The Pennsylvania Pugh Clause specifically refers to the application of this provision under Pennsylvania law. It is essential for both lessors (landowners) and lessees (oil and gas companies) as it dictates the separation of leased premises into productive and non-productive tracts, determining the expiration and retention of lease rights. Under the Pennsylvania Pugh Clause, if only a portion of the leased premises is used for the extraction of oil and gas, the lease will automatically terminate as to the non-producing portions, allowing the landowner to negotiate with other companies or retain rights for future development. This provision prevents companies from holding large areas of land under lease without actively producing hydrocarbons. There are various types of Pennsylvania Pugh Clauses based on specific conditions and language used. The Two-Part Pugh Clause is the simplest form, dividing the leased premises into two parts: productive and non-productive areas. The expiration or retention of the lease occurs solely based on production. Another type is the Horizontal Pugh Clause, designed specifically for horizontal drilling operations. It restricts the horizontal leasehold rights to only the producing units, while non-producing portions are released from the lease. This clause ensures that the landowner is free to negotiate separate leases for untapped parts of their land. Some leases may also contain a Depth Severance Pugh Clause, where the lease is divided based on different geological formations or stratigraphic depths. If one formation is productive, it will trigger the retention of the lease as to the productive interval, while the non-productive depths will be released. In summary, the Pennsylvania Pugh Clause is a crucial provision within oil and gas leases in Pennsylvania. It governs the separation of leased premises into productive and non-productive tracts, determining the termination or retention of lease rights. Variations of this clause, such as the Two-Part Pugh Clause, Horizontal Pugh Clause, and Depth Severance Pugh Clause, exist to accommodate different drilling methods and geological considerations.A Pugh Clause, also known as a Pugh provision, is a legal term widely used in the oil and gas industry, especially in Pennsylvania. It is an important provision found in oil and gas leases that determines how the lease should be divided or terminated concerning the exploration and production of hydrocarbons. The Pennsylvania Pugh Clause specifically refers to the application of this provision under Pennsylvania law. It is essential for both lessors (landowners) and lessees (oil and gas companies) as it dictates the separation of leased premises into productive and non-productive tracts, determining the expiration and retention of lease rights. Under the Pennsylvania Pugh Clause, if only a portion of the leased premises is used for the extraction of oil and gas, the lease will automatically terminate as to the non-producing portions, allowing the landowner to negotiate with other companies or retain rights for future development. This provision prevents companies from holding large areas of land under lease without actively producing hydrocarbons. There are various types of Pennsylvania Pugh Clauses based on specific conditions and language used. The Two-Part Pugh Clause is the simplest form, dividing the leased premises into two parts: productive and non-productive areas. The expiration or retention of the lease occurs solely based on production. Another type is the Horizontal Pugh Clause, designed specifically for horizontal drilling operations. It restricts the horizontal leasehold rights to only the producing units, while non-producing portions are released from the lease. This clause ensures that the landowner is free to negotiate separate leases for untapped parts of their land. Some leases may also contain a Depth Severance Pugh Clause, where the lease is divided based on different geological formations or stratigraphic depths. If one formation is productive, it will trigger the retention of the lease as to the productive interval, while the non-productive depths will be released. In summary, the Pennsylvania Pugh Clause is a crucial provision within oil and gas leases in Pennsylvania. It governs the separation of leased premises into productive and non-productive tracts, determining the termination or retention of lease rights. Variations of this clause, such as the Two-Part Pugh Clause, Horizontal Pugh Clause, and Depth Severance Pugh Clause, exist to accommodate different drilling methods and geological considerations.
