Replies to This Discussion

LandownerPermalink Reply by Lynn Wigglesworth on July 10, 2010 at 2:59pm

My understanding of a PUGH clause is that if only part of your property is included in a unit, the rest of the property isn't tied up...once the original lease expires, you can sign a new lease with the same or another company for the land not included in a unit. The way many leases are written, if you have 100 acres leased, the gas company can include only 1 acre in a unit, but the other 99 acres is still held by production (but not getting any royalty).

LandownerPermalink Reply by William Ladd on July 10, 2010 at 3:06pm

Guess I will have to do more research on this subject.

I thank you lynn for your input

Bill L.
aka Bummy

Permalink Reply by N Bohl on July 10, 2010 at 5:36pm

As far as I know there are at least two types of pugh clauses with O&G leases- vertical and horizontal.

LandownerPermalink Reply by Lynn Wigglesworth on July 11, 2010 at 9:50am

Also, there are some companies (like East) that refuse to put a PUGH clause in their lease. I don't know if other companies allow it or not.

LandownerPermalink Reply by William Ladd on July 12, 2010 at 12:12am

You can find much information about PUGH CLAUSES by punching "PUGH CLAUSES" in a search blank at the top of your monitor.

Bill L.
aka Bummy

LandownerPermalink Reply by Lynn Wigglesworth on July 12, 2010 at 12:50am

Unfortunately, it doesn't matter how great of a PUGH clause you come up with if the gas company rejects it. I fought with East for several months and ended up walking away from their offer, in part because they wouldn't accept a PUGH. I submitted the addendum my lawyer wrote (with a PUGH) to the lease Chesapeake offered me, and haven't heard from them in almost a month...I take that to mean that they have also rejected it.