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 Alaska Pugh Clause is a legal provision often included in oil and gas leases in the state of Alaska. It is named after the famous oil and gas attorney, Lawrence P. Pugh, who first introduced this clause in the 1970s. The Alaska Pugh Clause is used to address the issue of lease termination and to protect the lessor's interests in situations where only a portion of the leased land is productive for oil or gas extraction. The main purpose of the Alaska Pugh Clause is to prevent the continuation of a lease beyond its primary term for the entire leased area, if only a portion of the land has been found to contain viable oil or gas deposits. This clause ensures that the lessor can retain control over the non-productive portions of the leased area while allowing the lessee to maintain rights over the productive portions. There are different types of Alaska Pugh Clauses that can be included in an oil and gas lease. These types include: 1. Vertical Pugh Clause: This type of clause allows the lessee to maintain their lease rights only for the productive formations or strata. If a particular formation is found to be productive, the lease continues for that formation, while the remaining formations become subject to termination or renegotiation. 2. Horizontal Pugh Clause: This clause is based on the concept of horizontal drilling, where the lessee retains lease rights for the portion of the land located within a specific horizontal distance from the well bore. If oil or gas is found within this defined area, the lease continues for that portion, while the remainder can be terminated or subject to renegotiation. 3. Time Pugh Clause: This type of clause focuses on lease duration. It allows the lessee to retain lease rights only for the productive portions for a specific duration, such as the primary term of the lease. Once this term expires, the lease is terminated for the non-productive portions, giving the lessor control over the remaining areas. 4. Unitization Pugh Clause: This clause is related to the concept of unitization, where multiple leasehold interests are combined to maximize the efficiency of extraction operations. The Unitization Pugh Clause ensures that if the lessee unitizes only a portion of the leased area, the remaining non-unitized area will not be perpetually held under the lease agreement. In summary, the Alaska Pugh Clause is a crucial provision in oil and gas leases in Alaska. It safeguards the lessor's interests and prevents the lessee from holding the entire area under lease when only parts of it are productive. With different types such as the vertical, horizontal, time, and unitization Pugh Clauses, this provision allows for efficient and fair management of oil and gas exploration and production activities in Alaska.
