Royalty Interest

In 1989, my Grandpa's heirs (8 children) each sold their undivided 1/8 share of the farm, and through research found that when the land was sold that minerals rights were automatically included unless you reserved some percentage. In the general warranty deed each heir reserved 1/64 of their 1/8 share. The landman's and well operator interpretation of warranty deed differ. I would like an expert interpretation to see what the heirs (as I have my Mother's share) minerals rights are in total well production. The Warranty Deed states individual name, etc, for valuable consideration paid, grant with general warranty covenants to buyers name. Then states: Being an undivided one-eighth (1/8th) interest in and to the following: Deed describes land involved then at bottom lists the reservations. Here is the wording: Reserving unto Grantor/his heirs and assigns forever herein, a 1/64th interest of the oil and gas royalty, being 1/64th of the 1/8th of oil and gas produced from the premises. Thanks in advance for your help

From your description, it sounds like the 1/64th of 1/8th royalty was reserved. If your mother never conveyed her interest subsequent to the above mentioned General Warranty Deed, and they did in fact pass along to you, I think you would own an interest. You will need an attorney or independent landman to look at the entire GWD to give you a more informed opinion. Is the well producing?

There is a possibility of an over conveyance and in that you need a title lawyer or abstract to make that judgment. 1/64 of 1/8 is 1.25 acres of an entire section (less than a quarter of one percent). That's not much to be worth the effort.

The 1/64th of 1/8th of 1/8th would be correct from what I understand. If the mineral owner(s) signed a lease for a 1/8th royalty, your 1/64th of 1/8th would be subject to that. Since it appears that a royalty was reserved and not minerals, your interest would be carved out of that 1/8th royalty created by the lease. If multiple mineral owners signed for different terms, the calculations become more complicated.

That is what I am saying... such wording can be badly interpreted and as such runs into the Duhig Problem

Dear Tina,

I will go with the title attorney on this one. The grant was for 1/8 interest in the property, or premises. Then the reservation was for a royalty equal to 1/64th of 1/8th of the premises (1/8). The word "of" means to multiply, so each heir, in my opinion would be entitled to 1/64 x 1/8 x 1/8, or .000244 decimal interest.

I doubt seriously that was what was intended, but the highest expression of the intent of the parties is confirmed by what they wrote down and signed.

This is not an over-conveyancing situation and Duhig would certainly not apply. My only caveat is that I have not looked at the entire document.

Essentially, here is what is likely to happen. If you challenge the Division Order Title Opinion, then the Operator will probably suspend payments until the situation is resolved, either by compromise or by lawsuit.

Buddy Cotten

T L Shields said:

That is what I am saying... such wording can be badly interpreted and as such runs into the Duhig Problem

  1. the current owner drafted the GWD, and my relatives read it to mean, as family they reserved a 1/8 interest with each heir receiving a 1/64 portion. i just want the correct percentage to be paid to family. thank you for your advice.

Do you not see the problem with that language? It implies each of 8 heirs got 1/8 of 100% of the minerals - each has 12.5% of the minerals. Family therefore has 100% of the mineral rights? Is that the way you are reading it? Each to get 1/64th

I read it that the entire family kept only 1/64th of 1/8th of the proceeds. Were they trying to say the (original ?) lease was 1/8th royalty??? That is the way the oil company appears to be reading it and if so, the (new?) leases appear to be 18% (38± ac) and 20%(12+ acres)??? and then they apply 1/8 TIMES 1/64th... and apply that to your percent of the unit ( 645.286 acres in unit, 50.747 in the (total) acres?

You own 7.8643% of the unit

Your share of that 7.8643% is 1/8 of 1/64 TIMES the percentage of the lease royalty %..???

Seriously, only a lawyer is going to straighten this out...

And it is a (reverse?) duhig in the sense it is an under-conveyance - The case law might go back to Hooks v. Neill

or Middleton v Broussand