I recently inherited minerals from my parents estate (here in East Texas) and notified the operator to transfer them into my name. I received a division order to sign. All looks good except one item i.e. the paragraph following beginning with the word “INDEMNITY”. I don’t want to indemnify anyone especially not the Operator. I understand that if the Operator accidentally overpays me, I am obligated to give back the excess. No problem there. But this paragraph seems to be inclusive of more than that. Would it be possible to cross out this paragraph and see if Operator will accept? INDEMNITY. The owner agrees to indemnify and hold payor harmless from all liability resulting from payments made to the Owner in accordance with such division of interest, included but not limited to attorney fees or judgments in connection with any suit that affects the Owner’s interest to which payor is made a party.
Look at Texas Natural Resources Code regarding division orders. It is generally understood that the purpose of this clause is that you are claiming a DOI royalty of 0.XXXXXX and the operator will pay you. If someone else sues you or the operator by claiming that your title is defective, in whole or in part, then you will be responsible for any legal costs incurred by the operator. The theory is that you should be responsible for claiming excessive royalty.
https://codes.findlaw.com/tx/natural-resources-code/nat-res-sect-91-402.html
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