“NOW, THEREFORE, ABC Company does hereby bargain, sell, release, and quit-claim unto XYZ Company a 1/4th of 1/8th royalty interest in the S/2 of the SE/2 of Section 32”
Is there any question as to whether that is a fixed or floating NPRI? I read it as fixed. Also, how many NRA is that assuming 80 gross acres?
It may be no acreage at all since it says “royalty” interest. It may only pertain only to the royalties from well or wells in that description. 3.125% royalties in that well? There is a difference between mineral rights and royalty rights. Mineral rights are ownership in the physical mineral rights of the land below a certain description. They include royalty rights. But royalty rights are just the rights to the revenue from a particular well or wells and do not include the rest of the minerals.
Thank you! This is indeed a royalty interest in any wells, it does not include any executive rights nor right to bonus/delay rentals. My question is whether this is a fixed or floating NPRI? Say the executive rights owner signed a 1/4 lease. Would the royalty interest in wells be 1/4 of 1/8 of 1/4 (1/4 of 3.125%)? Or would it be 1/4 of 1/8 irrespective of the underlying lease royalty (3.125%)? I assume the latter, since the language seems to create a fixed royalty that is not affected by the underlying lease royalty. Essentially, the inclusion of “1/8” in the conveyance is acting as the lease royalty fraction. Is this right?
It depends on language within the entire document, not just one phrase or sentence. It also depends on state law where the minerals are located. Courts in various states interpret deeds differently. An oil and gas title attorney can give you a definitive answer, but will have to see the entire deed and will need to know what the grantor owned to determine what could be transferred to the grantee.