Replies to This Discussion

Permalink Reply by Bill Simpson on February 21, 2012 at 10:32am

This is the group Washingtonpalawyer.com.

They are an attorney firm for landowners. They had some meetings in January and I attended the one in Jefferson.

The presentation was given by attorneys. Very knowledgeable and they have a Q @A session also.

Permalink Reply by Ronaround on February 22, 2012 at 1:47am

thanks,I haven't signed with anyone yet and just want to find the options. any one have thoughts on this group?

Permalink Reply by Adam Thomas on February 22, 2012 at 4:41am

Below is a copy of the Pugh clause that I cut and pasted from their website under examples of lease terms that have been negotiated.  When you read the clause below, realize that their horizontal portion only comes in effect if the parcel is 60 acres or larger in size.  This means that any PARCEL less than 60 acres has NO horizontal pugh clause.  MORE IMPORTANTLY, THERE IS NO VERTICAL PUGH CLAUSE AT ALL!!  I hope that the residents of Ashtabula county are educated on the subject enough to realize that this lease clause is tremendously important.  Without it, the o/g company can hod the acreage down to the core of the earth and hold it under production with merely a shallow vertical well.

Remember, just because there is a heading for a clause doesn't mean it is a good one.  It is the wording of the clauses that matter.  Don't just read headings.  Read and understand them as they are by no means created equal from one lease to another. 

Remember, the signing bonuses are nice but without the right lease terms, you can step over a dollar to pick up a dime if you are not careful.  The bonus money is a very small percentage of the money at stake in this and these leases could effect your family for generations.  Please do your research.

I wish you all good luck in your decisions. 

Pugh Clause

 If the Leasehold covered by this Oil and Gas Lease covers more than sixty (60) net acres and more than sixty percent (60%) of the Leasehold covered by this Oil and Gas Lease is not included in the production unit established by Lessee, this Lease shall automatically terminate two (2) years (“Extended Term”) after the expiration of the primary term or any extension provided herein, insofar and only insofar as to all Leasehold outside a production unit established by Lessee for a well, provided if the Lessee, its successors or assigns shall be engaged in operations for the drilling, completing or testing of a new well or wells or the drilling, completing, testing, or deepening of an existing well or wells on the leased premises or on lands with which said Leasehold or a portion hereof have been included in a production unit, then this Oil and Gas Lease shall continue in full force and effect until such drilling, completing, testing or deepening operations have been completed.

Permalink Reply by Ronaround on February 22, 2012 at 5:52am

This is interesting and I thank you very much. i have only 45 acres so this is very detrimental indeed.

by chance do you know if the Pugh clause is similar in other groups in the area?

Permalink Reply by Ronaround on February 24, 2012 at 3:03am

The meeting  was packed last night. found out they only have about 1500-1600 acres in the Ashtabula area in the "group". 8 percent on bonus money.

Permalink Reply by Tina B on March 4, 2012 at 8:05am

There is another lease on their website and they had a pugh clause that had a vertical and horizontal pugh with no acreage limits. That was the Mt. Jackson Group lease in PA. They've done a couple of different groups and all of the leases are different depending on the location of the group and the fortitude of the landowners.