This is from a deed : Grantor selling her 151-acre farm. Grantor (Man who bought the 151-acre farm)
She reserved the following in the deed :
The Grantor herein retains one-half undivided interest in and to the one-eighth non-participating oil gas and other mineral royalty, but grantee is here by conveyed all lease rights, together with the other one half of the royalty interest in and to said land herein above described.
Would anyone like to put in layman’s terms what exactly did the grantor retain? How does the 1/8th come into the equation.
I understand the only thing she retained was half of the royalties (half of what is extracted subsurface) The grantee will own the other half of those Royalties.
So if a company sold $xxxx in gas from that well in October, she would be entitled to half of $xxxx as a non-participating royalty interest (NPRI) owner. She has no deductions for operating expenses.
Thank you…this is driving me crazy. Thank you!
As good as your descriptions is, it is difficult to render an opinion regardnig what you have. It should as though a layman crafted the deed which seems to reference an exisiting lease. One would need to know the what the grantor had at the time of the deed in question.
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it kinda depends which state this is from. Texas Supreme Court has previously interpreted, for example, that the usual and customary 1/8th is from the days prior to word processors and typewriters, when all Oil and Gas leases were from a standard form, which always contained a 1/8th royalty. Thus, 1/2 x 1/8 is a 1/16th NPRI, Grantee receiving Executive Rights and rights to receive Bonus/Rentals.
The concept of Fixed vs. Floating NPRI comes into play due to the variable nature of the royalty in today’s perspective. Some states would interpret your NPRI as a Fixed 1/16, which then would dilute to 1/4 of a 1/4 royalty. Other states would interpret it as floating, or the algebraic equivalent of 1/2 x royalty, which then is determined by the royalty of any lease the Grantee would execute. So if it were a 1/5 royalty, your NPRI would be 1/10th.
You would need to determine, per state, what case law and court opinion has determined would be the precedent of interpretation on the matter.
This deed in in Texas from 1952. Thank you for taking the time to explain that that really did help me.
Because this has been passed on through the Texas rules of descent and distribution, I found that some of my cousins don’t even know that they own a fractional portion of that mineral interest.
For those going forward the amount is not going to be worth the administrative duties It takes to preserve their part.
My father is still alive, so I’m not an owner. My interest is not the money or potential to make money. I want to preserve the heritage of those rights So they will serve as a reminder of how hard our ancestors worked to own the land in the first place.
With the threat of new laws to marry the mineral rights back to the surface owner we risk losing them. So I’m trying to work toward a solution where we can reunite ( at least our fractioned portions as a family together) into some kind of a holding entity, recorded with the county, that that will require little administration and won’t cost a lot.
There are over $3000 in royalties held in suspense from an heir on the original deed who died in 1962. His portion belongs to the current owners. Forming a holding entity formed properly can streamline the efforts to claim that money to one person. As it is now would take the actions of 16 people.
Is this property still being paid on/producing? If so what interest is it being acrredited for? Thats a rather sophisticated reservation for 1952, you would have to know what the previous deeds conveyed to have a full grasp on what was owned at the time of that conveyance.
This is offered without the review of your document and is not a legal opinion. This type of muddled language in a deed is fairly common in Texas. It would seem that the seller was intending to sell 100% of the surface, possibly 100% of the executive rights to the minerals, possibly 100% of the rights to all lease bonuses, and 50% of the 1/8th royalty. If the current production is subject to a 1/8th royalty lease, then there is no question as to the division of revenues. In the cases of newer leases with an increased royalty, typically there will be a title requirement for a stipulation of interest. There are many reasons for this type of title requirement, but it is primary purpose is to correct the ambiguity of the granting language of the deed.
Your family needs to get the family tree defined, probably sooner or later. I seen so many times on land, minerals and property where people think that things should be like they think or want it to be. If things like this are not done sooner it is usually only going to get a lot harder and more expensive to get fixed later. Good Luck