You are here:

Oil/Gas/Pugh Clause


sjd wrote at 2010-01-26 21:17:31
You have the two terms reversed. See Williams & Meyer Oil & Gas Terms for definitions of horizontal and vertical pugh clauses.

Petroleum Landman wrote at 2010-03-19 15:14:46
Actually, the above answer is incorrect.  It is the exact opposite:

Vertical Pugh Clause:

Notwithstanding anything to the contrary, it is agreed that should Lessee exercise his option to pool or combine any portion of the land covered hereby with other lands, lease or leases as hereinbefore provided, then such operations and production on and in any such pooled unit as herein provided, shall continue this lease in force and effect during or after the primary term as to that portion of the lands covered by this lease, included in such unit or units as hereinabove provided, but not as to such portion of said lands covered by this lease and not included in any such unit. This lease maybe kept in force and effect as to such remainder in any manner elsewhere provided in this lease not inconsistent with this paragraph.

Horizontal Pugh Clause:

It is understood and agreed that one (1) year after the expiration of the primary term of this lease, upon the expiration of any extension or renewal, or after cessation of operations as provided herein, whichever occurs last, Lessee shall release all rights lying below the stratigraphic equivalent of one hundred feet (100') below the base of the deepest producing formation in any well drilled on the leased premises or on lands with which the leased premises has been pooled or unitized.

Bill Mendenhall wrote at 2011-02-17 04:01:22
The titles of these two clauses are incorrect (reversed).  The first is the horizontal Pugh Clause and the second is the vertical Pugh.

buffalohed wrote at 2011-07-28 17:20:53
This is constantly reversed and confuses more and more landowners because of the apparent misunderstanding of what is horizontal and what is vertical.  A Pugh simply releases what will not be held under an oil and gas lease once it enters the secondary term, absent production or the effect of a savings clause.  Horizontal (layers) serves to release, just that, formations.  A vertical Pugh serves to create tracts, or segregate, unpooled acreage from pooled acreage - this is done by spatial or a surface-view standpoint.  Learned this at UT getting my PLM and working in this business for over twenty is misdefined more than any other term I can think of.

equinex3 wrote at 2012-04-25 14:25:45
I've been told that the term 'verticle pugh clause' in not for legal use in an oil/gas lease.  Did you mean to call it a "vertical depth clause?"

landman wrote at 2013-02-18 15:21:47
The answer above is incorrect.  A vertical pugh is actually rights expiring outside the area that has been unitized or in a productive proration unit.  A horizontal pugh deals with the rights below and/or above a certain depth or formation terminating.  The explaination sounds as if it would be opposite of the truth, but is indeed correct.

Daniel wrote at 2013-06-19 14:20:25
Why does have it the reverse of what is stated here?  Which is it and why can't everyone agree?


All Answers

Answers by Expert:

Ask Experts


Laura M. FitzGerald, CPL


PLEASE READ CAREFULLY BEFORE SUBMITTING A QUESTION. I can answer all questions related to oil and gas ownership, mineral interests and working interests concerning the leasing and selling of your minerals, any questions concerning pipeline ROW's, units with the Louisiana Department of Conservation; pooling provisions, depth limitations, vertical or horizontal pugh clauses; and oil and gas terminology. I can offer assistance in negotiating for leasing your property, assisting in locating owners of suspended funds or to receive the best offer for your oil and gas interests, should you desire to sell. I am only able to answer questions regarding oil and gas leases, minerals, royalties, or offers to purchase mineral/royalty interests if I have complete information. Please provide a full legal description for your interest(s). If the question pertains to a lease, please include all terms of any current (or desired) lease offers, including lease bonus amount, royalty and lease term. If the question is regarding a mineral or royalty interest offer to purchase, please provide the offer amount, date of offer, other offer terms, and further details on the mineral/royalty interest, such as lease terms, and if producing, the average monthly income. Since I receive numerous inquiries daily, I am only able to answer your questions efficiently and effectively if I have complete information. I must decline any questions submitted with incomplete information. If your question is non-technical in nature and you simply need assistance understanding an oil and gas matter, please submit your question with as much information and detail as possible. Any background information that has led to your question is also very helpful.


I have over 34 years experience as an Independent Petroleum Landman. I became a Landman after working as a paralegal for Oil & Gas Attorneys for 8 years. My first 2 years were spent specializing in Well History and Research with the Louisiana Department of Conservation, then moving into clearing title defects and handling title curative for oil and gas properties for the next 6 years. Subsequent thereto, I handled title issues, buying oil and gas leases and settling surface damages. I also acquired acreage for drilling prospects in excess of 10,000 acres. I also became a mineral/royalty owner commencing in 2004 and have found that I can help many people when they have reached the point in their lives they feel converting their minerals or royalties into a cash asset benefits them.

American Association for Professional Landmen, ArkLaTex Assoc. of Professional Landmen, and Dallas Association of Professional Landmen (DAPL), Certified by the Women's Business Enterprise National Council (WBENC)- South. This certification is one of the most widely recognized and respected certifications in the nation. This designation is reserved for only those women-led businesses that exemplify the characteristics of integrity and professionalism to which the WBENC adheres to so strictly.

Attended LSU, became a Certified Professional Landman in 1994; Notary Public with dual authority in multiple parishes in North Louisiana; Bilingual in English and Greek

Awards and Honors
Expert Oil & Gas Professional assisting attorneys representing landowners. Involved in 2 lawsuits and both suits were awarded to the landowner. Ilios Resources, Inc. has been awarded the Best of Shreveport Oil and Gas Mineral Buyer Award for 2016, 2015, 2014, 2013 and 2012.

Past/Present Clients
Consultant Landman for Texas Oil & Gas (TXO Production Corp.), Anadarko Petroleum, Comstock Resources,Independent Geologists, Pipeline ROW Clients, and Oil & Gas Attorneys. For the past 5 years my practice is primarily an advocacy for the landowner. I also assist royalty owners recover suspended payments or incorrect royalty payments, or sell their mineral or royalty interest.

©2017 All rights reserved.