Iowa Pugh Clause

State:
Multi-State
Control #:
US-OG-843
Format:
Word; 
Rich Text
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Description

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 Iowa Pugh Clause is a legal provision commonly used in real estate contracts and leases in the state of Iowa. It is designed to address certain aspects related to oil and gas leases and the termination of such leases. The Iowa Pugh Clause specifically focuses on the issue of leasehold acreage and the rights of the landowner when it comes to terminating sections of the lease while continuing with others. This clause ensures that after a certain period or specific event occurs, a landowner can release or terminate parts of their leased acreage while retaining the rights to other portions. The primary purpose of the Iowa Pugh Clause is to prevent the "held by production" concept which allows oil and gas companies to hold on to leased acreage for extended periods even if production is only taking place on a small portion. This clause allows landowners to protect their interests and regain control over unused portions of the leased land, thereby preventing companies from tying up large areas without actively utilizing them. There are various types of Iowa Pugh Clause provisions that can be included in contracts or leases, depending on the specific circumstances and requirements of the parties involved: 1. Pugh Clause by Acreage Release: This provision allows the landowner to release unproductive or unused portions of the leased acreage after a certain timeframe or when specific conditions are met. By doing so, the landowner can free up the unused land for other purposes or negotiate new leases with different terms. 2. Pugh Clause by Zone Release: In this type, the land is divided into different zones or areas, typically defined by geological formations or production activity. When production ceases or decreases significantly in a particular zone, the landowner has the right to terminate that zone while retaining control over other productive zones. 3. Pugh Clause by Time Release: This provision allows the landowner to terminate the lease or release acreage if no production activity or substantial development occurs within a specified timeframe. It aims to prevent companies from holding onto leased land without actively pursuing oil and gas exploration or production. 4. Comprehensive Pugh Clause: This version combines elements of all the above provisions, providing the landowner with flexibility and multiple grounds for terminating or releasing unproductive acreage. It is important to consult with a qualified attorney or legal expert familiar with Iowa law when including or negotiating an Iowa Pugh Clause in a real estate contract or lease agreement. They can provide guidance on the specific provisions and tailor them according to the unique needs of the landowner and the oil and gas company involved.

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FAQ

The point of a retained-acreage provision is to be able to seek a new opportunity to lease unworked land to a different lessee, one who might do something productive with it. A Pugh clause is a negotiated provision in favor of the lessor. Pugh clauses modify pooling/unitization rights.

The Pugh Clause ? A clause in the Oil and Gas Lease which modifies usual pooling language to provide that drilling operations on or production from a pooled unit will not preserve the whole lease.

A Vertical Pugh Clause requires the Operator to release the rights below a defined vertical depth after the primary term of your lease expires. For example, all rights 100 feet below the deepest drilled depth or 100 feet below the deepest formation penetrated.

The Pugh Clause limits the rights of the lessee to hold only particular depths or amounts of leased property in a pooled unit after the expiration of the primary term. In Texas, production from any portion of a leased tract is deemed production from the entire tract. Pugh clause negates this general rule.

A Pugh Clause is enforced to ensure that a lessee can be prevented from declaring all lands under an oil and gas lease as being held by production. This remains true even when production only takes place on a fraction of the property.

A phrase (usually contained in a Pugh clause in an oil & gas lease) that terminates the lease after the primary term as to all formations below a particular depth typically defined as the stratigraphic equivalent of the base of the deepest producing formation in the unit.

A clause in an oil and gas lease establishing the acreage around a producing well or pooled unit that the lessee is allowed to retain after termination of the lease if certain conditions are met. There is no standard retained-acreage clause, and these clauses vary by lease.

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More info

For example a Pugh Clause that begins: “If, at the end of the Primary Term, a portion or portions of the leased premises is pooled or unitized with lands as ... Closely related to the Horizontal Pugh Clause is the “Retained Acreage Clause.” Generally, a retained acreage clause will terminate the lease as to acreage ...Download the document. Once the Pugh Clause is downloaded you are able to fill out, print out and sign it in any editor or by hand. Get professionally ... Oct 8, 2019 — The typical oil and gas lease with a pooling clause provides that the entire lease tract will be considered held by production, regardless of. Feb 5, 2014 — Confirming such ownership will require a potentially burdensome title examination of land outside of the subject drilling unit. The title ... Dec 30, 2019 — The overall lesson is to review your state's jurisprudence before signing off on a Pugh clause, and make sure to be as specific as possible. Feb 6, 2023 — When written properly, a Pugh clause is capable of locking down the number of properties. These can be included in a lease, especially after its ... Sep 10, 2021 — Multiply the amount entered on line 8 by 5% to determine the fee due for new registration to the State of Iowa. NOTE: Line 7c and line 9 may ... Rev. 703, 713 (2011). To prevent dilution of their interest, landowners often include a Pugh clause which severs the lease from units where drilling operations ... Because Form ADV-S is being rescinded, advisers are no longer required to file the written disclosure statement ("brochure") required by rule 204- 3 [17 CFR ...

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Iowa Pugh Clause