Mineral deed questions
Mineral deed or royalty deed: what is the difference?
A mineral deed and a royalty deed can name the same fraction and pay the same today, then pay very differently under the next lease. The difference is in what rights pass.
What a mineral interest carries
A mineral interest is the full bundle: the right to sign a lease (the executive right), the bonus paid for signing, any delay rentals, and royalty on production.
What a royalty interest carries
A royalty interest is a share of production, paid without the costs of drilling and producing. It carries no right to sign a lease, no bonus and no rentals.
The title on the deed does not decide it
Forms titled "Mineral Deed" sometimes convey royalty only, and a mineral deed can hold back the executive right or the bonus. Read the granting clause and the paragraph that states the interest.
Words that point to royalty: "royalty", "non-participating", "of production", "free of cost". Words that point to minerals: "in and to the oil, gas and other minerals in and under", "bonus", "delay rentals", "the right to lease".
A worked example
Under a lease with a 1/8 royalty, a deed of one-half of the minerals pays 1/2 times 1/8, which is 1/16 of production, plus half of any bonus. A deed of one-half of the royalty pays the same 1/16, and no bonus.
Under a new lease with a 1/4 royalty, the half mineral interest pays 1/8 of production. A deed of "a 1/16 royalty" stays at 1/16.
What to check on your deed
- Find the paragraph that states the interest, and write down its exact words.
- Mark whether the fraction is of the minerals, of the royalty, or of production.
- Look for anything held back: the executive right, bonus, delay rentals.
- Compare with the deed before it in the chain. A grantor who owned only royalty could not convey minerals.
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.