Why is it called a Pugh clause?

Why is it called a Pugh clause?

The Pugh Clause is named for a Louisiana attorney, Lawrence Pugh, who took on Shell Oil in 1947 on behalf of a lessor. The Louisiana Supreme Court sided with Shell Oil, and Pugh determined that the only way to prevent something similar from happening again was with a special clause in the lease contract.

What does a Pugh clause do?

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.

What is a horizontal Pugh clause?

The horizontal Pugh clause operates to release all lands not included in a pooled unit, typically at the end of the primary term or after cessation of continuous drilling operations, if the lease provides for same. The horizontal Pugh clause releases land at the surface as to all depths.

When did Pugh clauses start?

Pugh, who first used such a clause in 1947 to prevent the holding of non-pooled acreage in his client’s lease while only certain portions of the lease acreage were being held under pooling agreements.

What is a Mother Hubbard clause?

What is a Mother Hubbard Clause? The “Mother Hubbard” or “cover-all” clause is a common provision in an oil and gas lease1 that provides a mechanism to include lands not adequately described in the lease or certain interests that vest after the lease has been issued.

What is pooling in oil and gas?

Pooling is the combination of all or portions of multiple oil and gas leases to form a unit for the drilling of a single oil and/or gas well. The unit is generally one or a combination of government survey quarter-quarter sections.

What is a pooling clause?

Generally, a pooling clause will allow the leased premises to be combined with other lands to form a drilling unit, wherein proceeds from production anywhere on the drilling unit are allocated according to the percentage of the acreage of each tract divided by the total acreage of the drilling unit.

Why is it called Mother Hubbard clause?

Where Did This Name Come From? Although it is unclear where the Mother Hubbard clause acquired its unique name, one possibility is that it was taken from the opening stanza of the “Old Mother Hubbard” nursery rhyme. And so the poor dog had none.

What is a shut-in royalty?

Essentially, the shut-in royalty provision allows a lessee to temporarily cease production (i.e., shut-in a well) and pay a shut-in royalty to the lessor in place of the royalty on production that is not occurring during the shut-in period.

What is a pooling clause in oil and gas lease?

What is the difference between pooling and unitization?

Pooling refers to joining together enough acreage to allow issuance of a drilling permit for a single well. Unitization refers to joining together large areas such as an entire reservoir or field to optimize operations, introduce efficiencies, and reduce costs. Both pooling and unitization can be voluntary or forced.

What is pooling and unitization?

What is a Mother Hubbard clause in a judgment?

we held that “the inclusion of a Mother Hubbard clause—by which we mean the statement, ‘all. relief not granted is denied’, or essentially those words—does not indicate that a judgment. rendered without a conventional trial is final for purposes of appeal.”

What is the Mother Hubbard clause?

Can a shut-in well be reopened?

To restart production, it is necessary to bring a new rig, drill the cement plug, and pump the sludge blocking the well head. The hope is that oil will start to flow again. If this fails, you have to drill a new well, inject chemicals or even perform hydraulic fracturation (fracking).

What is meant by unitization?

1 : to form or convert into a unit. 2 : to divide into units the added cost of unitizing bulk products.

What is a unitization agreement?

Unitization is the agreement to jointly operate an entire producing reservoir or a prospectively productive area of oil and/or gas. The entire unit area is operated as a single entity, without regard to lease boundaries, and allows for the maximum recovery of production from the reservoir.