Document Title: Mineral Deed vs. Royalty Deed

[jdub]

The following pertains to the state of Texas;

1. At the top of a recorded document that conveys a Non-Participating Royalty Interest (NPRI) from Party A to Party B, is the title “Mineral Deed”. This NPRI only conveys a royalty interest. When this same interest (with the same wording in the body of the document) is later conveyed from Party B to Party C, at the top of that document is the title “Royalty Deed”.

If the wording in the body of a conveyance document describes an interest that would be considered a NPRI (it only conveys a royalty interest), does it matter whether the title at the top of the recorded conveyance document is shown as “Mineral Deed” or is shown as “Royalty Deed”? I’ve encountered this ……… and it’s been confusing to me.

Other than being confusing, are there any legal implications with what seems to me might be a case of a confusing title on a document?

2. Related to Item 1 above ……. in a series of Division Orders (D.O.) over the years from various oil & gas companies (all D.O.’s pertained to the same mineral interest) the decimal interest shown on the D.O. has typically been labeled “RI” (which I assume stands for “Royalty Interest”) and not shown as “NPRI”. The wording in the body of the first conveyance in the chain of subsequent conveyances appears to indicate it is a NPRI conveyance……. and only a royalty interest was conveyed. The ability for future Grantees to sign leases was not conveyed.

From searching county records, no recorded leases have been found other than the lease referred to in the original conveyance from Party A to Party B. I am Party F. This seems to me to confirm that the Party A conveyed a NPRI (that did not allow for signing of any future leases) to Party B (and B’s heirs and/or assigns).

It appears to me that the “RI” designation on previous D.O. ‘s over the years simply got passed down in the Decks from O & G company to O & G company without being questioned ……… until the newly current O & G company went back to the source document (the conveyance from Party A to Party B) and found the wording describes a NPRI (for a royalty only).

Given that situation, would there be any legal consequences to this “mislabeling” (RI vs. NPRI) on previous D.O’s .…… or is the only negative that it caused confusion to Party F (me) who is trying to follow the paper trail and make sense of all of this?

As long as the description of the interest type (NPRI) in the body of the conveyance document is consistent among the chain of Grantor / Grantee conveyances, is there a need to be concerned that the “Type of Interest” on previous D.O.’s was shown as “RI” vs. “NPRI”?

3. When signing a D.O. should I handwrite the following on the D.O.? “This instrument does not modify or amend the terms of any oil and gas lease. All royalties due and payable under any oil and gas lease shall be calculated and paid as provided in the Lease.”

[tracy_lenz]

I’m not a lawyer, but I typically see NPRI’s recorded in Texas a variety of ways, especially historically. I think what matters is the wording in the document, not the title, though don’t quote me. Contracts generally are considered in full, meaning interpreted in a way all the words in the contract are honored.

I’ve also seen most DO’s label NPRI’s as RI, so that wouldn’t concern me. The division of royalty payments wouldn’t need to distinguish if someone had leasing rights or not.

I don’t see any harm in writing that statement on the DO. You can even print out your own DO from NADOA (https://www.nadoa.org/forms/div_ord.pdf) and use that in place of the one they send you.

[jdub]

Thanks for your response Tracy. This is helpful information.