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 Wisconsin Pugh Clause is a legal provision utilized in oil and gas leases to determine the extent to which a lease can be terminated or extended. It was named after a landmark case in Wisconsin involving the interpretation and enforcement of this clause. The purpose of the Wisconsin Pugh Clause is to protect the rights of both the lessor (landowner) and lessee (oil or gas company) in the event of a partial termination or expiration of a lease. In essence, the Wisconsin Pugh Clause establishes that if only a portion of a leased area is kept active for oil or gas production, then the remaining portions of the lease will automatically terminate and revert to the lessor. The clause effectively prevents the lessee from holding on to the entire leased area even if only a small portion is being exploited for resources. There are a few different types of Wisconsin Pugh Clauses that may exist within an oil or gas lease. These variations may include: 1. Full Pugh Clause: This type of Pugh Clause terminates the entire lease, not only the portions of the leased area that are not producing. With a full Pugh Clause, the lessee is required to release or surrender the non-productive lands back to the lessor upon termination. 2. Partial Pugh Clause: In contrast to the full Pugh Clause, a partial Pugh Clause only terminates the non-productive areas of the lease, allowing the lessee to retain the productive portions. This variation is more favorable for the lessee as they can focus solely on the productive lands while returning the non-productive areas. 3. Horizontal Pugh Clause: This type of Pugh Clause is specific to horizontal drilling operations. It applies when a lease covers multiple parcels or tracts and drilling occurs only on specific tracts. The Horizontal Pugh Clause allows the lessor to terminate the lease for the non-drilled tracts while allowing the lease to continue for the drilled tracts. 4. Vertical Pugh Clause: Similar to the horizontal variation, the Vertical Pugh Clause applies to vertical drilling operations. It stipulates that if drilling occurs on only a specific portion of the leased area (such as a particular depth), then the non-drilled sections will be terminated and returned to the lessor. Landowners and oil or gas companies in Wisconsin must carefully consider the inclusion and terms within the Pugh Clause to ensure their rights and interests are protected. The exact wording and scope of the clause can significantly impact the lease's duration, termination, and the rights of the parties involved.
