Pugh Clause

• Category: Oil and Gas - Leases
• State: Multi-State
• Control #: US-1340898BG
• Format: Word; Rich Text

Description

Most leases will contain some provision giving the lessee (oil and gas company) the right to consolidate the leased premises with adjoining leased tracts. The area formed is called a “pool” or sometimes a “unit.” The reason for establishing such pools is to unite all the landowners having an interest in a common underground reservoir under one operator. Sometimes pooling arrangements are necessary to meet the minimum acreage requirement for a drilling permit under state regulations. An Oil and Gas Lease with Pooling Rights is a contractual agreement between a mineral rights owner and an oil or gas company which allows the company to explore and produce oil or gas from the mineral rights' owner's land. The oil or gas company is given the right to pool any land they own and/or lease in the area with the mineral rights' owner's land to allow for efficient and economical operations. Pooling rights allow an oil or gas company to combine multiple tracts of land into a single unit, allowing for efficient exploration and production of oil and gas. There are two primary types of Oil and Gas Lease with Pooling Rights: voluntary and involuntary. Voluntary pooling occurs when multiple mineral rights owners agree to allow their lands to be pooled by an oil or gas company, while involuntary pooling occurs when a mineral rights owner is forced to pool their land due to state regulations. Pooling rights can also be granted to an oil or gas company by the state, allowing the company to combine tracts of land from multiple owners without their consent.

An Oil and Gas Lease with Pooling Rights is a contractual agreement between a mineral rights owner and an oil or gas company which allows the company to explore and produce oil or gas from the mineral rights' owner's land. The oil or gas company is given the right to pool any land they own and/or lease in the area with the mineral rights' owner's land to allow for efficient and economical operations. Pooling rights allow an oil or gas company to combine multiple tracts of land into a single unit, allowing for efficient exploration and production of oil and gas. There are two primary types of Oil and Gas Lease with Pooling Rights: voluntary and involuntary. Voluntary pooling occurs when multiple mineral rights owners agree to allow their lands to be pooled by an oil or gas company, while involuntary pooling occurs when a mineral rights owner is forced to pool their land due to state regulations. Pooling rights can also be granted to an oil or gas company by the state, allowing the company to combine tracts of land from multiple owners without their consent.