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PA State Senator Introduces Bill That Would Add Pugh Clause to Leases

Pennsylvania state Senator Gene Yaw (R-Lycoming County) has introduced legislation that would effectively add a Pugh clause to leases being unitized for development of shale gas.  Senate Bill 356, which was introduced by Senator Yaw and several others on January 31, has been referred to the Senate Committee on Environmental Resources & Energy for consideration.  A Pugh clause releases the portion of leased acreage that is not included within a production unit.  Senate Bill 356 would apply only to units formed after the effective date if the bill were passed and to development of unconventional reservoirs, as defined in the bill.