After 1977, state law allows for a statutory Pugh clause wherein all acreage outside 160-acre drilling and spacing units become unleased 90 days after the primary term.
- The Pugh clause won’t help with the old leases, only new leases. You can’t go back and retroactively fix or revise an old lease.
- Almost all leases executed in 2022 or 2023 are going to be 160 acre or 640 acre spacing, so the statutory Pugh clause would kick in, in any event.
- the only time the Pugh clause will help you in a lease in 2022 is if the well is drilled on a lease basis (haven’t seen one of those for awhile, or a 80-acre of less spacing unit (not common at all.).
- Martha is correct that sometimes it does matter. But, I will suggest its pretty uncomnon.