Anatomy of a mineral deed, part 5 of 11
The interest conveyed in a mineral deed
What actually passes: a share of the minerals or a share of the royalty, and the fraction of what. The most misread paragraph in a mineral deed.
an undivided one-half (1/2) interest in and to all of the oil, gas and other minerals in and under and that may be produced from the following described land
What it is
A mineral interest carries the right to sign a lease, receive bonus and delay rentals, and receive royalty when there is production. A royalty interest is a share of production only: no lease signing, no bonus, no rentals.
The fraction matters as much as the kind. "One-half of the minerals" and "one-half of the royalty" can pay the same today and very differently under the next lease.
What to check
Is this half the minerals, or half the royalty, and half of what?
- The words "mineral" or "royalty", and whether the fraction is of the minerals, of the royalty, or of production.
- The fraction, written in words and in numbers, and that the two agree.
- Whether it is a fraction of the whole tract or of the grantor's interest ("one-half of Grantor's interest").
- Whether bonus, delay rentals and the right to lease (the executive right) pass with it or are held back.
- Wording such as "1/2 of 1/8". Courts have read older Texas deeds with that wording in different ways, so it is a question for a title attorney.
A worked example
The two gauges on the sample deed show the same deed read two ways. Say the land is leased with a 1/8 royalty.
An undivided one-half of the minerals receives one-half of that royalty: 1/2 times 1/8, which is 1/16 of production. It also receives one-half of any bonus and may sign its own lease.
One-half of the royalty also receives 1/16 of production under that lease, but no bonus and no right to sign a lease.
Under a new lease with a 1/4 royalty, the half mineral interest receives 1/2 times 1/4, which is 1/8 of production. A deed of "a 1/16 royalty" stays at 1/16 whatever the lease says.
Where it goes wrong
A royalty deed read as a mineral deed, or a fraction of the grantor's share read as a fraction of the whole.
See the interest conveyed on the sample deed
Related
We are landmen, not attorneys. This page explains how mineral deeds are usually read. What your deed means can turn on its exact words and on Texas law, and a title opinion comes from an attorney.
Want us to read yours?
Tell us what your deed says and what you want to know. We can read the deed and explain what it conveys, or pull the chain of title in the county records and show how the interest reached you. We read every request and can reply by email.
For a lease, a division order or a check you cannot read, Landman Help works for owners. For a full runsheet or title packet, Landman Services runs the county records.