One paragraph in an oil and gas lease decides whether a single well ties up all of your acreage for decades or only the part actually being developed. It is named after a Louisiana lawyer, and it is probably the most valuable sentence a mineral owner can negotiate.
A Pugh clause is a lease provision that limits how much of your property a producing well can hold. Without one, a lease is held by production as a single indivisible thing: one well anywhere on the leased land, or in a unit that includes any part of it, keeps the entire lease alive indefinitely. With a Pugh clause, the lease survives only as to the acreage or the depths actually being produced or developed. Everything else falls back to you when the primary term ends.
It is named for Lawrence Pugh, a Crowley, Louisiana attorney who drafted the first version in the 1940s after watching clients lose control of large tracts to a single shallow well. The concept spread because the problem is universal.
Because the alternative is a lease that never ends. Consider 640 acres leased in 1985 for a three-year primary term. One well is drilled on 40 acres and produces modestly for forty years. Without a Pugh clause, all 640 acres remain leased on 1985 terms for as long as that well breathes. The 1/8 royalty your grandparents accepted still governs, and no operator can lease the other 600 acres from you at today's rates because they are not yours to lease.
With a Pugh clause, the 40 producing acres stay leased and the other 600 come back to you at the end of the primary term. You are free to negotiate a new lease at current bonus and royalty, which in an active play can be the difference between a few hundred dollars and six figures.
The two kinds cut the lease in different directions, and the names confuse almost everyone because they describe the plane of the release, not the direction of the wellbore.
| Type | What it releases | What it protects you from |
|---|---|---|
| Horizontal Pugh (also called a surface or acreage Pugh) | Acreage outside the producing or pooled unit | One well holding land far away from it |
| Vertical Pugh (also called a depth clause) | Formations above and below the producing zone | A shallow well holding the deep rights everyone actually wants |
You want both. A horizontal Pugh clause alone still lets a Woodford well hold your Mississippian rights in the same 640. A vertical Pugh clause alone still lets a well in the northwest quarter hold the whole section. Owners who negotiate only one usually did not know there were two.
Partly, and this surprises people. Oklahoma has a statutory Pugh clause at 52 O.S. § 87.1(b) that operates automatically on spacing units, whether or not your lease says a word about it. Where a spacing unit of 160 acres or more is formed, leasehold lying outside that unit terminates more than 90 days after the primary term expires, even though a unit well is producing.
The Oklahoma Supreme Court construed this provision in Hall v. Galmor, 2018 OK 59, and rejected constitutional challenges to it. Do not read the statute as a substitute for a negotiated clause, though. It works on spacing units of a certain size, it does not sever depths, and it will not help you on tracts that were never spaced. A well-drafted contractual Pugh clause covers ground the statute does not.
Texas, by contrast, has no statutory Pugh clause at all. In Texas you get one only if you negotiate it into the lease.
Read the lease, and read the exhibits. Pugh clauses are frequently buried in an addendum or Exhibit A rather than the printed form, because the printed form is the lessee's paper and the Pugh clause is the lessor's win. Look for language about acreage "not included within a unit," or about the lease terminating "as to all depths below the deepest formation" or "below 100 feet beneath the deepest producing perforation."
If you do not have the lease, it is almost certainly recorded at the county courthouse, or the operator will send it if you ask. Our free letter templates include a request for exactly that. If you would rather someone else read it, send it to Ask a Landman or text a photo to 918-984-1645 and we will tell you what you have, free.
Ask for it plainly and early, in writing, before you have agreed on bonus. Reasonable asks that operators grant more often than owners expect:
Expect resistance in a hot play and expect success in a quiet one. If you are weighing a lease offer right now, our free lease offer check reads the whole document, not just the bonus, and tells you which clauses are missing.
It generally raises value, sometimes a lot. Minerals burdened by an old lease with no Pugh clause are worth less because the upside is locked away at 1980s royalty rates. The same minerals with acreage and depths free to lease carry option value on every formation that has not been drilled. When we underwrite a purchase, the presence or absence of a Pugh clause is one of the first things we check, and it moves our number. Our valuation page walks through the rest of what moves it.
Text a photo to 918-984-1645 or use Ask a Landman. We will tell you whether you have a Pugh clause, what it actually releases, and what it means for your acreage. Free, and you do not have to be selling anything.
Ask a Landman Check a Lease OfferBerlin Royalties is a mineral buyer and a landman shop in Tulsa, not a law firm. This is general information about a common lease provision, not legal advice about your lease. Statutory references are to Oklahoma law as of August 2026; other states differ, and Texas has no statutory Pugh clause.