Anyone have one of these and what is it?

General Mineral Rights Discussion
1

Does anyone have a document like this:

				Royalty Deed

I, Ted Weiner, convey to name an undivided 317/716155 interest in and to all oil royalty, gas royalty, royalty in casinghead gas, and royalty in other minerals in and under all of Sections 33, 39, 40, 41, 45, 46 B 36 T-1-S and all of Section 4, B 36, T-2-S containing 4518.5 acres … This grant shall run, and the rights, titles, and privileges hereby granted shall extend to grantee herein, and to grantees heirs, administrators, executors, and assigns forever…

Nevertheless, during the term of this grant, neither the grantor nor the heirs, administrators, executors and assigns of the grantor shall enter into any lease…unless any such lease…shall provide for at least a royalty of 1/8 …to be delivered free of cost…

              End RD

Obviously, I have only included what I consider the key elements. I have been told I have a NPRI, an ORI (ORRI if you don’t follow english language rules); I have also been told that ORIs attach to the working lease and end when the lease ends. I think none of that applies to this document. I believe I have a Non Expiring Overriding Royalty Interest.

Before you start wading in to tell me how little I know, please read everything in the post. Here Is why I believe as I do:

This Royalty Deed is also described by 9 abstracts. Over 190 wells have been drilled in or through those 9 abstracts over the last 75 years. Every single one of those wells resulted in the payment of royalties to the person I inherited from, escheatment to unclaimed property or to myself once I found out I was the owner and filed appropriate paperwork to get on paylists. At least 6 companies have been involved in researching these wells and deciding to place myself or the person I inherited from on the paylist. When a DO analyst got snarky with me when I inquired about new wells I had not received DOs on and advised I would have to prove chain of title from sovereignty I advised that they were already paying royalties on wells drilled in the appropriate abstract(s) and that my holdings included all minerals in the defined area. Since that exchange about 40 new wells have been added to my paylist which currently includes about 110 wells.

Now my question: Is there a more preferred name for this holding that I should be using?

2

Without seeing the whole instrument, I can’t be 100% certain, but this really looks like a non-participating royalty interest (NPRI), which is a type of mineral interest that does not have the right to lease (executive rights), the right to delay rentals, or the right to bonus. An NPRI owner only receives the right to a percentage of the royalty.

An NPRI runs with the mineral estate, not the leasehold estate. It is not part of the working interest (an interest based on an oil and gas lease). An overriding royalty interest (ORRI or ORI, if you prefer; both abbreviations are part of standard industry practice) is carved out of the working interest, and when the underlying lease expires, so does a carved-out ORI.

NPRIs are not like this; they exist independently of any oil and gas lease.

A mineral owner is technically obligated to pay the NPRI owner. Still, in practice, operators sort all of that out, note which mineral owner is burdened by the NPRI, and deduct accordingly in their pay decks.

I would still need to see the whole instrument to be certain, but your interest appears to be a fixed NPRI that is not multiplied by the lease royalty. You receive a fixed 317/716155 portion of the royalty.

The short answer to your question is NPRI, unless you omitted some language that would make it otherwise.

The division order analyst is asking you to prove title to your Interest from sovereignty, which is costly. They either have a genuine title issue affecting your interest, or they are raising an unnecessary administrative block.

Have you sent them the instrument with the language above?

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Does this verbiage not tie the holding to the mineral owner and state that the revenue interest is subject to the lease royalty of any subsequent lease?

The division order analyst issue was resolved over a year ago and I believe if was an unnecessary administrative block. Yes, I provided them a copy of the royalty deed.

Am I correct that my interest, regardless of name, is non- expiring and will only end if I sell the holdings?

5

@min4me Once again, I can’t be 100% certain without examining the entire instrument, but from what I have seen, you will only cease receiving the right to the proceeds of production based upon this interest until you sell it, you die, or the world ends whichever comes first. Or, perhaps if minerals become nationalized like they are in other countries, but I am betting the world ends first.

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6

1950-8590-certified.pdf (345.2 KB)

I appreciate you comments and I was not trying to be difficult. I knew I had attached documents previously, but it took me a while to relearn how to do it. With luck my certified copy of the royalty deed that I inherited from is shown above.

7

I examined the royalty deed and can confidently say it conveys a floating 317/716155 NPRI. This means the royalty amount is a fraction of the lease royalty, so if the lease royalty on any part of the lands is 1/8, the grantee gets 317/716155 multiplied by a 1/8 interest (0.00005533) in the oil and gas produced under that lease.

I know I said it was fixed in an earlier post, but after reading the actual deed, subtle wording differences have changed my conclusion.

8

This verbiage is to prevent the mineral owner from signing a low royalty lease with a high bonus, with the intent being cheating the NPRI owner!

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