My sisters and I signed a pooling agreement with Resolute which only covered 39 of the 80 acres leased to them. Do they have to pay to extend the lease on the balance?
If you have Pugh language, and they wish to extend, then yes. They would have to pay your Option/Extension bonus based off the balance of the acreage outside the Unit.
If you do not have a Pugh, the entire leased premise will be held by production.
Thank you - we do have a Pugh clause but I think it only addressed depth. I’ll check that. Thanks again John
On that same note, if you have a Depth Pugh, they could extend the acreage within the Unit as to the depths that will expire.