Good, Bad, Better Best Pugh Clauses???

Anyone have success wording a Lease Agreement so that the Lessee MUST include a pre-set percentage of your acreage in any royalty producing drilling unit?  In other words - they lease your 100 acres then only claim they are incorporating 20 acres into a drilling unit, and your reduced royalties are based on the 20 acres  not 100...so what if they later have to release the other non-used 80 acres - IF they control the ingress/egress/ best access points AND who the hell knows what they're are doing under there  ESPECIALLY with all the changing technologies! - what legal assurance can be lease protected to make certain they have to use a higher percentage of the 100 acres, or at least pay royalties on it - and/or that ANYTHING they do won't adversely affect the re-leasing value of the remaining lease-freed (due to non-production) 80 acres???

Anybody have a great PUGH CLAUSE you care to share?

Thanks all!

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Permalink Reply by Mike h on August 28, 2014 at 4:20am

The SURE group lease included both horizontal and vertical PUGH clauses.

Permalink Reply by Tom on August 29, 2014 at 4:40am
My Eclipse lease was negotiated with a 60% pugh clause as well. No landowners group here either. They were going to include a verticle pugh as well, but I didn't care for the wording of the clause so I had it changed to a depth restriction instead.
Permalink Reply by pacman on August 29, 2014 at 1:35pm

    The Pugh clause is so important I only know that because I have been on the bad end of a Pugh clause. In wetzel co we are in a unit where as the bore path runs through our property and they cut 4acres out of the unit and didn't  pay us 1ft on the other side of the bore path.. I'll give you 3 guesses and the first 2 don't count who this was. I have contacted them many times only for them to tell me after months they will just use RULE OF CAPTURE.

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