America’s conversation place for mineral & royalty owners

NPRI - NPMI - Non-Executive Mineral Interest

There is confusion on this board and the gowhatevershale.com board concerning these terms.

A NPRI means this - a Non-Participating Royalty Interest. A NPRI is a non-cost (meaning drilling and development) share of production. It is generally expressed as a fraction of production of 8/8ths, but that is not a requirement. Here is an example, Grantor reserves for himself, his heirs and assigns a royalty equal to an undivided 1/16 of 8/8ths of the oil and gas that may be produced from the above described property. A NPRI is a non-possessory interest in production.

A NPMI means this - a Non-Participating Mineral Interest. A NPMI is conceptually rare. It is created by describing the entire mineral estate then reserving all interest except the royalty. Like if you were going to sell a 5 story tenement and described the entire tenement and then reserved all but the top floor. The difference is that the royalty is determined to be a percentage of royalty, such as 1/16 of 1/4 royalty provided on the lease. Other than that, it is a NPRI.

A Non-Executive Mineral Interest is just that. The ENTIRE mineral interest stripped of the right to enter into oil and gas leases. The Non-Executive still gets his share of bonus, royalty, and the rights of ingress and egress.

All three interests will require the joiner of each to pool the intererests. The reason for this, in Texas, is that the pooling transaction creates a cross conveyance of minerals. The holder of the minerals, or the executive, does not have the right to convey the property of the NPRI, the NPMI or the non-executive.

There are an incredible number of nuances to each. Please ask and I will try to explain.

Best,

Buddy Cotten

2 members like this

Comment

You need to be a member of Mineral Rights Forum to add comments!

Join Mineral Rights Forum

Comment by Seth on January 24, 2012 at 10:06pm: All,

Received e-mail from the RRC, for both your information and participation:

Thank you for sharing your concerns regarding the Railroad Commission’s review of our Mineral Interest Pooling Act (MIPA) rules. I agree that the rules should be transparent, consistent, and protect the rights of landowners and mineral rights owners.

We will be holding a public hearing at the Railroad Commission on January 30, 2012 in Room 1-111. I encourage you to testify at the hearing, if your schedule allows, and/or submit written testimony to the Commission. Testimony may be mailed to:

Railroad Commission of Texas Office of General Counsel

Attn: James Doherty P.O. Drawer 12967 Austin, TX 78711-2967

I appreciate your suggestions and look forward to working with you as the Commission reviews this important matter.

Sincerely,

David Porter

Texas Railroad Commissioner

Katie Carmichael

Executive Assistant/Scheduler

Railroad Commissioner David Porter

P. O. Box 12967

Austin, TX 78711-2967

512-463-7133 Direct line

512-463-7161 Fax

katie.carmichael@rrc.state.tx.us

Comment by Buddy Cotten on July 9, 2011 at 2:42am: Dear Joan,

It really depends on what the language is on the mineral deed. If it is all right, title and interest in and to the minerals....then the intention is clear. I can see a poorly drafted mineral deed in this situation creating lot of heartburn for landmen and title attorneys alike.

Best,

Budd Cotten

Comment by Joan Downey on July 8, 2011 at 3:39pm: Buddy, if a mineral owner also owns a non-participating interest and executive rights on other owners interests in the same tract, do the non-participating interests and executive right pass in a MD if he does not reserve them?

Comment by Buddy Cotten on June 16, 2011 at 12:29am: Dear Ed.

Most NPRI's are defined as exctuy that. Threre are plenty of excceptions of course.

"A non excutive mineal interest is drafted quite differently,such as grantor sets over and convys 1/2 of the mineral interest in whiteacre. but reseves for himself, heirs and asign all of the rights to execute oil and gas leases and to recrive and receipt for the bonus, delay rental and roylty paid under the terks of said lease.'' The last clause is highly negotialbe.

best.

buddy Cotten

Comment by E. Sealy on June 13, 2011 at 4:15pm: Dear Professor Cotton,

Are most NPRI's referred to such when conveyed? Conversly are you saying a non-exec mineral right tends to be construed as such by virute of the absence of the NPRI language in a conveyence? Thanks Buddy!