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 Maricopa, Arizona Pugh Clause is a legal provision that is often included in oil and gas leases to determine the division of rights between the lessor and lessee in the event of termination or expiration of a lease. It empowers the lessor to effectively divide the leasehold into separate parcels, allowing for the release of certain portions while retaining rights to any undeveloped or producing areas. The Pugh Clause derives its name from Lawrence Pugh, an Oklahoma landsman who first introduced this concept in the 1940s. This contractual provision is particularly significant in areas like Maricopa, Arizona, which possess significant oil and gas resources while also harboring other valuable land uses. By incorporating this clause, both parties ensure clarity and protection of their respective interests. Types of Maricopa, Arizona Pugh Clause: 1. Horizontal Pugh Clause: This type of Pugh Clause applies primarily in horizontal drilling situations. It stipulates that if oil and gas production on a lease is achieved horizontally within a specific depth interval, the lease is deemed perpetuated only for that interval and will terminate for the remaining depths. This enables the lessor to explore alternative agreements for untapped resources outside that specific interval. 2. Vertical Pugh Clause: The vertical Pugh Clause pertains to wells producing oil or gas from a single vertical well bore. It allows the lessee to retain lease rights solely for the producing interval, releasing the remaining depths. Consequently, the lessor becomes free to negotiate new leases or other land agreements for the non-producing areas. 3. Partial Pugh Clause: This variant of the Maricopa, Arizona Pugh Clause allows either the lessor or the lessee to release specified portions of the lease while retaining rights to other parts. This can be advantageous when only certain sections of the land are being developed or when the lessee wishes to retain some active operations while releasing non-active or non-producing areas. The Maricopa, Arizona Pugh Clause plays a crucial role in leasing agreements within the region, providing the necessary framework for delineating leasehold rights and maximizing the benefits for both the lessor and lessee. It ensures efficient and effective utilization of resources, while also allowing landowners to explore alternative land uses in areas outside the leased zone. It is essential for parties involved in oil and gas leasing transactions in Maricopa, Arizona, to understand and incorporate the appropriate type of Pugh Clause to safeguard their interests and facilitate sustainable resource management.
