Easily Hide Cross in the Pooling Agreement

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Why should mineral owners care about getting a Pugh clause in their lease?

Why should mineral owners care about getting a Pugh clause in their lease? Pugh clauses specify whether a lease can be held on a mineral acreage by production on land outside that acreage. When are you required to put your Social Security number on an oil and gas lease?

What is the Pugh clause in Louisiana?

The Pugh Clause 893 (1947). In this case the Louisiana Supreme Court held that production from a unit including a portion of a leased tract will maintain the lease in force as to all lands covered by the lease even if they are not contiguous.

Where did the Pugh clause come from?

Named after Lawrence Pugh, a Crowley Louisiana attorney who developed the clause in 1947, the Pugh clause may turn out to be a tripwire for unaware investors in an oil and gas lease contract. Before the Pugh Clause was introduced, lessors were exposed to the risk of placing more property under lease than they intended.

What is the depth Pugh clause?

There are two kinds of Pugh clauses: the vertical and horizontal. The vertical Pugh clause operates to release all depths below the deepest producing zone, typically at the end of the primary term or after cessation of continuous drilling operations, if the lease provides for same.

What is an example of a pooling clause?

Example: Lessee shall have the right to unitize, pool, or combine all or any part of the leased premises with other lands in the same general area by entering into a cooperative or unit plan of development approved by any governmental authority.

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.

What is the purpose of the pooling agreement?

What is a Pooling Agreement? A pooling agreement is a type of contract where corporate shareholders create a voting trust by pooling their voting rights and transferring them to a trustee. This is also called a voting agreement or shareholder-control agreement since it is used to control the affairs of the corporation.

What does pooling arrangement mean in insurance?

Insurance pooling is a practice wherein a group of small firms join together to secure better insurance rates and coverage plans by virtue of their increased buying power as a block. This practice is primarily used for securing health and disability insurance coverage.

What is a Pugh clause in an oil and gas lease?

In general terms, the Pugh Clause provides that production from a unitized or pooled area located on or including a portion of the leased lands will not be sufficient to extend the primary term for the entire leasehold.

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