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 Wyoming Pugh Clause is a legal provision that can be found in oil and gas leases in the state of Wyoming. It is an important clause that pertains to the termination and separation of mineral rights. The Wyoming Pugh Clause is named after Lawrence T. Pugh, an attorney who developed this provision in the early 1960s. It is primarily designed to allow the lessor (landowner) to terminate a specific portion of their mineral rights while maintaining ownership of the remaining portions. This clause becomes relevant when an oil and gas lease covers multiple tracts or formations. It ensures that if the lessee (oil and gas company) chooses to produce from only a portion of the leased lands or formations, the lease will not be extended indefinitely, and the lessor will regain control over the non-producing areas. There are different types of Wyoming Pugh Clauses that can be used based on the desired outcome. These types include: 1. Full Pugh Clause: In this type, if the lessee stops producing from one or more formations or tracts within the leased lands, the lease automatically terminates for those specific areas, but remains active for the producing formations or tracts. 2. Partial Pugh Clause: This type allows the lessor to specifically identify certain formations or tracts within the lease that will terminate if the lessee stops production from them. The remaining formations or tracts will continue to be covered by the lease. 3. Horizontal Pugh Clause: Particularly relevant in the context of horizontal drilling, this clause enables the lessor to terminate the lease for any non-producing intervals within the comprehensive horizontal formation. This ensures that only productive sections of the formation remain under lease. 4. Depth Pugh Clause: This provision allows the lessor to terminate the lease for any non-producing depths or intervals within a vertical well bore. It ensures that the lessee does not indefinitely hold the entire depth below the deepest production. 5. Time Pugh Clause: This type of Pugh Clause specifies that if the lessee fails to produce within a set timeframe from a certain formation or tract, the lease automatically terminates for that particular area. In summary, the Wyoming Pugh Clause serves as an important mechanism for landowners to protect their rights in oil and gas leases. It allows for the termination and separation of non-producing areas or intervals, ensuring that the lessor can regain control and make alternative arrangements if desired.
