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 Idaho Pugh Clause is a legal provision commonly used in oil and gas leases in the state of Idaho. It is designed to protect both the lessor (landowner) and the lessee (oil and gas company) by addressing the issue of lease termination and the release of unproductive land from the lease. By incorporating the Idaho Pugh Clause, all parties involved can ensure fair and clear terms for future exploration and development. The primary purpose of the Idaho Pugh Clause is to prevent the "held by production" provision from keeping the entire leased area under the control of the lessee. This means that if only a portion of the leased land is producing oil or gas, the lessee will not be able to hold the entire lease valid indefinitely based on that production alone. Instead, the clause stipulates that the lease will remain in effect only for the productive portions, while the non-producing sections will be released and open for leasing by other interested parties. By including the Idaho Pugh Clause in an oil and gas lease, the landowner can ensure that inactive or unproductive areas are not tied up indefinitely, allowing for potential leasing opportunities with other companies. On the other hand, the lessee can maintain focus and allocate resources more efficiently on the productive portions of the leased area without unnecessary obligations on the non-producing sections. There are different types of Idaho Pugh Clauses that can be incorporated into an oil and gas lease, based on specific requirements and negotiations between the parties involved. Some variations may include: 1. Horizontal Pugh Clause: With this type of Pugh Clause, only the productive formations in a horizontal well are kept under lease, while the unproductive formations are released. This allows the lessee to maintain control and continue operations only on the areas where oil or gas is being tapped. 2. Vertical Pugh Clause: In contrast to the horizontal Pugh Clause, the vertical Pugh Clause releases unproductive depths or formations while retaining the lease rights on the productive depths or formations. This is especially relevant in areas with multiple layers of potential oil or gas deposits. 3. Depth Pugh Clause: A depth Pugh Clause applies when a lease covers different depths or strata. It allows for the release of non-producing zones or depths while keeping the productive zones or depths confined within the lease. This ensures that leased areas with no viable resources are released, promoting efficient exploration and development practices. Overall, the Idaho Pugh Clause is an essential provision in oil and gas leases, aiming to protect the rights and interests of both the landowner and the lessee. By carefully considering the specific type of Pugh Clause to be included, parties can tailor the lease to their needs and effectively manage the exploration and production of oil and gas resources in Idaho.
