Crude Oil 44.91 +4.12%

Natural Gas 2.78 +2.31%

Gasoline 1.26 -4.31%

Heating Oil 1.36 +3.60%

How does a Pugh Clause affect WI?

Home Forums General Discussion How does a Pugh Clause affect WI?

Tagged: 

Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • #7981
    Deric Garzavistol_admin
    Keymaster

    I’m applying for a division order analyst position, and I was told that I would be tested on how a Pugh clause affects WI.

    As I’m thinking about this, the only way I can think of a Pugh clause affecting WI would be that it makes the mineral owners Net Acres smaller upon release of the un-pooled land and therefore the operators net leasehold acres would be smaller. Which would reduce your total WI in the tract (Sum of Net Leasehold Acres/Total acres of the unit)

    Is there another way that the Pugh Clause can change an operators WI in an allocated DOI or does this sound right?

    #8184
    Yolanda Bazanybazan
    Participant

    There is no set language in a lease in regards to creating a Pugh Clause. There are various types of Pugh Clauses such as surface and depth provisions. Note that depth restrictions may not include going up hole to a shallow depth. If at all depends on the language of the lease. If your lease has questionable Pugh language it’s recommended that your company have a title attorney review the lease.

    Yoli B

Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.