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Permalink Reply by Kassi on September 2, 2008 at 16:04

The standard vertical pugh clause allows the O&G company to keep 100 feet below the deepest interval drilled or deepest formation drilled. Some prefer to have the vertical pugh specify depths i.e. 9,000 feet to 17,000 feet but the O&G companies do not care for that.

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Permalink Reply by Mlbjr on September 3, 2008 at 3:02

Does this mean that a lease with a vertical pugh clause of 1000' in relative terms is not as good for the landowner as the standard 100'?

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Permalink Reply by Thomas T. Thomas on September 3, 2008 at 5:07

Correct, Shales are immune to faults due to their extreme depth and the fact that shale is basically a rock. This is why O & G companies don't need to seismic test core areas of this and other shales before they lease the land.

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Permalink Reply by Mlbjr on September 3, 2008 at 5:41

Mr. T please respond to my earlier question regarding a vertical pugh
clause of 100' vs 1000'

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Permalink Reply by Thomas T. Thomas on September 3, 2008 at 8:21

The most common and most advantageous to landholders is the 100' clause. I mean just think you retain more minerals giving the lessee 900' less vertical depth. The 100' is just to ensure they retain the entire formation they drilled to which is good for you and them.

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Permalink Reply by Barbara on September 9, 2008 at 6:48

I don't understand. If there's gas down there, and you have a good lease with good royalty percentage, wouldn't you want them to get it even if more than the 100 feet. Why stop them there?

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