Issue with Assignment of Royalty

General Mineral Rights Discussion
1

We recently received a division order for a producing well in ND. As expected the RI differed from what we expected. Currenly we are in the process of understanding how our RI was calculated.

My question is this: The property was originally aquired by my grandfather in North Dakota in the late 40's early 50's from the Land Bank of St Paul. It is the policy of the land bank to retain 50% of the minerals. That is to say 50% was transfered to my grandfather and 50% retained by the Land Bank.

At one point my grandfather did two Assignment of Royalty of 1/2% and 1% for a total of 1 1/2%.

The language of the Assignment stated: "% royalty of all of the oil and of all the gas produced and saved from the hereinafter described lands".

The Oil Company's Title attorny is saying since my grandfather only owned 50% of the minerals that our 1/6th royalty needed to be reduced by 3% instead of the 1 1/2% listed on the two Assignments.

Does this seem correct?

James

2

Dear Mr. Scheer,

Without looking at the four corners of the document, it appears that your grandfather assigned a percentage of the whole and not of his interest, or reduced to his interest.

If there is a proportionate reduction clause in the assignment, then you would be correct.

Otherwise, with limited view of the language, I agree with the title attorney.

3

Here is a PDF of one of the Assignments.

James 3049-treasurerco.williams.nd.us_20101026_0812411.pdf (255 KB)

4

Mr. Scheer,

Thanks for uploading the document. It makes it so much easier to arrive at a conclusion that way. My call is that the grantor conveyed an undivided percentage in the stipulated amount, not subject to reduction. I am no attorney, so I can only offer business advice. If I were running title, that is the conclusion at which I would arrive. Others may have different interpretations, however, I stand with the examining attorney on this one.