Invoking Pugh Clause?

Hi Sam,

The Pugh clause is added to the lease as an “addendum” or modified when your negotiating the lease with the E&P company. Did you have that put into the lease? If it hasn’t been added at the time of the signing, the company can pool whatever acreage into the unit to use and the other acreage left out will be held with the unit, just not being paid on.

Companies will not break lease contracts to satisfy.

I hope this helps answer your question?