Pugh Clause
About this form
The Pugh Clause is a lease rider used in oil and gas transactions to separate pooled acreage from the rest of the lease. This form allows you to customize the lease by setting specific terms related to production and operations. Unlike standard lease agreements, the Pugh Clause ensures that production on a portion of the lease does not maintain the entire lease. Several variations of this clause are available, each addressing different aspects of pooling and lease maintenance.
Key parts of this document
- Definition of pooled acreage
- Conditions for maintaining lease validity
- Provisions for vertical severance
- Clauses applicable to delay rentals
- Reference to related forms for different severance types
When to use this document
This form is necessary when entering a lease or oil and gas transaction and you want to ensure that only specific, pooled portions of the leased land are maintained under the lease. It is particularly useful if you have concerns about the rights granted to the Lessee in the standard lease form.
Who can use this document
- Landowners entering oil and gas leases
- Lessees looking to modify lease terms
- Attorneys representing clients in lease negotiations
- Industry professionals involved in resource extraction agreements
Instructions for completing this form
- Identify the parties involved in the lease transaction.
- Specify the exact acreage being pooled under the clause.
- Detail the conditions under which the lease is maintained.
- Include any additional provisions related to vertical or horizontal severance.
- Obtain necessary signatures of all parties involved.
Does this form need to be notarized?
This form does not typically require notarization to be legally valid. However, some jurisdictions or document types may still require it. US Legal Forms provides secure online notarization powered by Notarize, available 24/7 for added convenience.
Common mistakes to avoid
- Failing to specify the exact acreage included in the pooling.
- Not understanding the implications of severance clauses.
- Omitting signatures or dates from the form.
- Using a standard lease form without adapting the Pugh Clause as needed.
Benefits of completing this form online
- Convenience of immediate access and downloadable format.
- Editability to tailor the form to your specific needs.
- Reliability with forms drafted by licensed attorneys.
Form popularity
FAQ
A vertical Pugh Clause could provide a lease to a particular depth, such as 100 feet below the drilled well. The lessee would be limited to drilling to 100 feet but no further. Conceivably, the lessor could lease property below that range to another entity.
In general terms, the Pugh Clause provides that production from a unitized or pooled area located on or including a portion of the leased lands will not be sufficient to extend the primary term for the entire leasehold.
