Pugh ClauseUnderstanding the Horizontal & Vertical Pugh Clause Form
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People also ask
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What is a horizontal pugh?
A horizontal Pugh Clause is concerned with the surface area, releasing non-producing lands outside of a drilling unit or spacing area. A vertical Pugh Clause relates to the geological strata and releases non-producing formations at certain depths below the surface.
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What is the difference between Pugh clause and retained acreage clause?
The point of a retained-acreage provision is to be able to seek a new opportunity to lease unworked land to a different lessee, one who might do something productive with it. A Pugh clause is a negotiated provision in favor of the lessor. Pugh clauses modify pooling/unitization rights.
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What is a vertical pugh clause?
A vertical Pugh Clause could present a lease to a specific depth. This could include about 150 feet below the drilled well. What this implies is that the lessee would be restricted to drilling to 150 feet. They wouldn't be able to go further.
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What is the difference between vertical and horizontal Pugh?
The clause can be structured horizontally, vertically, or both. A horizontal Pugh clause would release non-producing sections at or below a certain depth, while a vertical Pugh clause would release all depths below the producing formation.
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What is the Pugh clause?
A Pugh clause is designed to restrict the acreage that one well holds to only the acreage that is within the production unit, which is covered by that well.
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What is the difference between Pugh clause and retained acreage clause?
The point of a retained-acreage provision is to be able to seek a new opportunity to lease unworked land to a different lessee, one who might do something productive with it. A Pugh clause is a negotiated provision in favor of the lessor. Pugh clauses modify pooling/unitization rights.
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