Pugh clause or Pool all clause?

Does anybody know which is better to have in a lease,A pugh clause or a pool all clause?I guess it would depend on how many acres a person owned,I don't know.

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Permalink Reply by Nancy Mosley on July 22, 2014 at 2:38pm
As I understand it, it depends is correct. Small acreage: all acreage in the unit. Large acreage: Pugh clause, release from lease all acreage not in unit at end of primary term. Very rough language there and consult an attorney but that is my understanding.
Permalink Reply by shorty79 on July 23, 2014 at 11:32am

I had a landman say it was best for me to get a pugh clause,I called my attorney today, and he said for me a pool all clause was better,I have small acreage, so I am hoping I can get a pool all clause,Every time I call my attorney with questions,I can expect to get a bill,So any free help is appreciated,And if I can answer any questions,I will be happy to do that also.

Permalink Reply by Bill Barnaby on July 23, 2014 at 1:30pm

Rule #1 about O&G never believe a word a landman tells you, if their lips are moving, they're lying. Seriously, believe NOTHING they say. You're doing the right thing getting an attorney.

Permalink Reply by Gunner Ostergard on July 23, 2014 at 11:54am

A pugh clause says that if they do not include all of your acerage in a unit,  they will release the other acres and allow you to lease those acres with another driller.  But what are the chances of another driller wanting to lease and develop your remailing acreage?   What are the chances some driller is gonna spend a couple million dollars on a well site on the opposite side of your property to develop those acrers that were not developed be the first driller?

 

An all pool clause says they have to include all your acerage in the unit,  This is what you want.

 

Now if you are talking a couple hundred acres then it might be a different story.

Permalink Reply by shorty79 on July 23, 2014 at 12:25pm

Thank You,

Permalink Reply by Philip Brutz on July 23, 2014 at 12:25pm

Has anyone actually had a gas company to accept a "Pool All Clause"?

Permalink Reply by Gunner Ostergard on July 23, 2014 at 12:41pm

yes

Permalink Reply by lettijack on July 23, 2014 at 12:46pm
Gunner, would you be kind enough to share the verbage of the clause?
Permalink Reply by Gunner Ostergard on July 23, 2014 at 1:51pm

This is from the Friendsvill lease that I googled.

http://www.thefriendsvillegroup.org/lease.pdf

(e)

Notwithstanding the Unit sizes set forth above, if this Lease covers ten (10) acres or more of land, then

not less than ten (10) acres of lands covered by this Lease shall be incorporated in any Unit established for any Well

drilled by Lessee; provided, however, that should the Leased Premises then not included in a Unit (“

Open

Acreage

”) be twenty (20) acres or less, then the entire amount of the Open Acreage shall be incorporated within the

Permalink Reply by Mary on July 23, 2014 at 2:59pm

On our 50 acre Lease with Chevron, we have a 'NO ORPHANED ACREAGE' clause which states "Lessee is specifically committed to use all of Lessor's acreage in one or more units so that Lessor's acreage fully develops the Marcellus Shale in accordance with the industry standards now or as may be applicable the future........"

Permalink Reply by mark on July 24, 2014 at 6:54am

shorty 79

best case scenario small aces total unitization of your acres with a vertical pugh clause  tried it but couldn't get it did get total unitization under 20 acres range resorces (beaver county, Pa) go for it whats the worse they can say? no I think we have all heard that one time or another GOOD LUCK mark P.S. would have included language but lease is in safety  deposit box

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