Imputed Pugh Clause
Has anyone ever been offered a Pugh Clause lease on unproductive acreage currently HBP?
Update new information has been located:
https://www.mcdonaldhopkins.com/insights/news/Will-Ohio-courts-impu...
In Burke v. Excalibur Exploration, Ohio’s Eleventh District held that the nonproducing horizontal portions of leased lands are released at the conclusion of the primary term regardless of whether the lease contains a Pugh Clause. (11th Dist. Ashtabula No. 2016-A-0041, 2017-Ohio-999) The lessors in Burke sought to have any acreage which was not included in a drilling unit released from the lease. The court determined that the lack of language in the lease specifying that production from any portion of the lands will hold the lease for the entirety of lands evidenced that the parties did not intend such an effect. Thus, rather than require a Pugh Clause, the Eleventh District appears to find that a horizontal Pugh Clause is imputed absent language to the contrary.
Magnetron12
https://www.mcdonaldhopkins.com/insights/news/Will-Ohio-courts-impu...
Sep 5
Landowner
tacoma7583
have they actually provided a lease for your review, if so any chance of sharing a redacted copy of it?
Sep 16
Landowner
Keith Mauck (Site Publisher)
Be careful relying on Burke. That case held that nonproducing horizontal portions of a lease were released at the end of the primary term even without a Pugh clause, but it’s an Eleventh District ruling (Ashtabula County). Other Ohio districts aren’t bound by it.
Oct 22