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Senate Bill 356 Pugh Clause Do We Want This ? Yes Very Good

  • 20 Replies
  • 10807 Views
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Johnh

  • 148
Re: Senate Bill 356 Pugh Clause Do We Want This ? Yes Very Good
« Reply #15 on: March 11, 2013, 09:38:39 AM »
This law may provide a Pugh clause but it won't matter if you look at what the gas companies are doing now.  The Felter and Merryall well pads in Wyalusing Township have four units for each tying up nearly 4000 acres.  As long as units can be formed any way the gas companies want all leased land will be in a unit and royalty owners will be in a state of perpetual confusion as units constantly change from one unit to two, North and South, to four, NE,SE,SW, and NW, or as is popular now, switching from North and South as in the Otis unit in Herrick Township to Otis East and Otis West.

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Wax

  • 6622
Re: Senate Bill 356 Pugh Clause Do We Want This ? Yes Very Good
« Reply #16 on: March 11, 2013, 02:23:40 PM »
This law may provide a Pugh clause but it won't matter if you look at what the gas companies are doing now.  The Felter and Merryall well pads in Wyalusing Township have four units for each tying up nearly 4000 acres.  As long as units can be formed any way the gas companies want all leased land will be in a unit and royalty owners will be in a state of perpetual confusion as units constantly change from one unit to two, North and South, to four, NE,SE,SW, and NW, or as is popular now, switching from North and South as in the Otis unit in Herrick Township to Otis East and Otis West.
May be the case sometimes. But other times, company is holding, large acreage, with only a small, portion in unit. This law will go a long way with helping a lot of landowners.

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rfnkmk

Re: Senate Bill 356 Pugh Clause Do We Want This ? Yes Very Good
« Reply #17 on: March 11, 2013, 03:40:35 PM »

  Would this apply to existing leases or just leases signed

  after the law is enacted.
Because the law says so. Every lease ever signed would follow this law.
A law cannot retroactively change valid, signed contracts. However, this could help with all newer leases.
Please contact Yaw as I did and ask the same question ? It does just that. Be no different than a forced pooling law, with a unit size restriction, or a gun law. Its a good law, better than most will have. Be a miracle if its gets passed.

If so that would be very useful to some landowners. As usual, it would depend on the details of the lease signed and the current density of drilling. Those more outside of the hotspots would benefit more I think.

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aktony

  • 1162
Re: Senate Bill 356 Pugh Clause Do We Want This ? Yes Very Good
« Reply #18 on: March 11, 2013, 07:26:23 PM »
In my opinion, a Pugh clause is an important inclusion in a lease.  It does not, however, obligate the company to utilize all the acreage included in the lease but releases the excluded acreage from the lease which allows the holder of the oil/gas rights of that acreage to negotiate another lease for that land either with the same company or a different company.

What are the chances of another company being interested in drilling on land which is among other parcels drilled exclusively by one company such as Cabot or Chesapeake? Are there any cases in which this scenario has occurred?

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riverrat

  • 2135
Re: Senate Bill 356 Pugh Clause Do We Want This ? Yes Very Good
« Reply #19 on: March 11, 2013, 10:12:49 PM »
so lets see you have a plug cause   & you have 100 acre an only 5 in a unit  they release your other 95    later they our another co wants to drill comes to you with a lease offer  $ 50 per acre you say no they say ok will just go around you      I think the whole things a crap shoot just like the unit size north & south our just one way   the plug clause will only effect a few  to the good   I think you should read the whole bill to see if maybe the gas companies are maybe getting a gift  you may end up with land with  no lease our if you just sit it out the rest of your land may be in the next unit

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Wax

  • 6622
Re: Senate Bill 356 Pugh Clause Do We Want This ? Yes Very Good
« Reply #20 on: March 11, 2013, 10:25:53 PM »
so lets see you have a plug cause   & you have 100 acre an only 5 in a unit  they release your other 95    later they our another co wants to drill comes to you with a lease offer  $ 50 per acre you say no they say ok will just go around you      I think the whole things a crap shoot just like the unit size north & south our just one way   the plug clause will only effect a few  to the good   I think you should read the whole bill to see if maybe the gas companies are maybe getting a gift  you may end up with land with  no lease our if you just sit it out the rest of your land may be in the next unit
The whole bill is posted on the first page of this tread. It is a very short read. Based on your theory no company should have trouble writing a Pugh Clause into your lease offer ? How many of us have one in their lease ?