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 Utah Pugh Clause is a legal provision used in oil and gas leases to determine the division of land rights between the lessor (landowner) and lessee (oil and gas company) after the expiration or termination of a specific portion of the lease. This clause is designed to protect landowners' interests and ensure fair and efficient exploitation of oil and gas resources. A Pugh Clause in Utah serves to clarify the treatment of land not included in the drilling operations and production. Typically, an oil and gas lease covers a large area of land, and lessees usually focus on only a small portion of it for drilling and exploration. The Pugh Clause specifies how the retained acreage will be handled by the lessee, ensuring that the lessee cannot continue to hold rights to undeveloped land indefinitely. Under the Utah Pugh Clause, different types or variations may exist, adding specificity to the terms and conditions outlined in the oil and gas lease agreement. Some commonly encountered variations include: 1. Horizontal Pugh Clause: This type of Pugh Clause pertains specifically to horizontal drilling operations, which involve drilling horizontally instead of vertically. It addresses the retention or release of acreage surrounding the horizontal well bore when production is established. It ensures that undeveloped portions of land are not held hostage by the lessee. 2. Vertical Pugh Clause: While horizontal drilling has become prominent, vertical drilling is still employed in certain situations. A vertical Pugh Clause focuses on the division of land rights regarding vertical drilling operations specifically. It outlines provisions for the release or retention of land not included in vertical drilling activities. 3. Partial Pugh Clause: In some cases, a landowner or lessee may opt for a partial Pugh Clause, which allows for the retention of certain mineral rights or portions of the leased land while releasing others. This type of Pugh Clause can be tailored to meet the specific needs and objectives of both parties involved. 4. Full Pugh Clause: On the other hand, a full Pugh Clause requires the lessee to release all undeveloped portions of the leasehold not actively utilized for drilling or production. This ensures that the landowner has the opportunity to lease the remaining land to other interested parties if desired. The Utah Pugh Clause, irrespective of its type, serves as a critical safeguard for landowners, preventing the indefinite hoarding of land rights by oil and gas companies. It establishes rights and obligations regarding the division and release of land, facilitating fair and efficient resource utilization while protecting the interests of both parties involved.
