Earlier this month, the San Antonio Court of Appeals issued two opinions in cases where the dispute centered around whether mineral reservations in a deed reserved a fixed or floating royalty. These cases offer important illustrations of the care that MUST be used when negotiating not only mineral leases butt also when negotiating the sale or reservation of mineral interests.
And to that extent, I am attaching this informative article I read, today, in my latest monthly Landowner's Alert newsletter issued by Braun & Gresham attorneys.
Thank you,
Pat
Ms. Pat Malone
1049-Fixedvs.FloatingRoyaltyClauses.doc (32 KB)
Pat:
I agree with Charles, thanks; but, this looks like a mess to stay away from. Plus, this is a very confusing issue to have to deal with, no matter who draws up the original deeds or papers.
Anyway, thanks for the heads up.
We were involved in that case representing one of the mineral owners who reserved minerals. There is another case in the San Antonio COA involving partition deed interpretation that should be interesting also. Probably see an opinion in about 3-4 months.
This issue is more common in older deeds, but it still raises issues today. For example, if you are buying or selling land with minerals, and paying $X per net mineral acre, how do you value a reservation like this? It can get complicated quick.