I understood absent a Pugh clause, an entire lease was held by production whether the leased lands were in the producing unit or not, in the same section or not or even contiguous or not? How wrong am I?

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Posted by tigerbaiter1033

USA

Member since Nov 2011

2470 posts

Posted on 10/30/18 at 10:11 pm to Baron Zemo

Is there language that designates how much acreage a producing well holds?

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Posted by cwill

Member since Jan 2005

54755 posts

Posted on 10/31/18 at 5:09 am to Baron Zemo

You’re not wrong - it’s all hbp.

This post was edited on 10/31/18 at 5:10 am

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Posted by Twenty 49

Shreveport

Member since Jun 2014

20832 posts

Posted on 10/31/18 at 6:12 am to Baron Zemo

These folks have what looks like a pretty understandable explanation.

quote:
The Pugh Clause (sometimes misspelled “pew clause”) is named after Lawrence Pugh, a Crowley Louisiana attorney who developed the clause in 1947, apparently in response to the Hunter v. Shell Oil Co., 211 La. 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.

Absent a Pugh Clause, a Lessor could be exposed to the entirety of the lands under an oil or gas lease being held by the production from a small portion of the lands covered by the lease being pooled or combined with other lands.

Pugh Clause

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Posted by Baron Zemo

Member since Oct 2018

4 posts

Posted on 10/31/18 at 9:25 am to Twenty 49

But if it’s a mineral servitude HBP the lease does not extend to interrupting prescription on lands outside of the unit unless the surface location of the well that is producing was drilled on the land of the servitude.

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