Royalty Interests vs. Mineral Rights

I have been talking about leasing with a landman for acreage in Texas. He just told me that I may not be able to lease the land because I may not own the mineral rights on the land. I may only have royalty interest. He then went on to say that I may already be pooled. Can someone tell me what this means?

IN TEXAS, the “mineral rights” has 2 components (1) the executive rights … signature authority for leases and receipt of bonus, delay rental and some part if not all of the royalty (2) the royalty, which may be non-participating: meaning that is subordinate to the executive rights and receives no bonus/rental but will receive a portion of the royaly from produced and sold oil/gas. You have to look at the document in the origin of the NPRI (non-participating royalty interest) to determine if the executive rights has the authority to pool the NPRI and the percentage or fraction of the lease royalty the NPRI is to share. As a case example, say (1) myself and 3 siblings sell our undivided 1/4 each of the family estate to one of us and each reserves their respective 1/4 of the royalty and conveys full executive authority to the buyer, in which cases the buyer negotiates/signs a lease and may get all the bonus/rental (that, too, in negotiable in the manner in which you structure your sale) and each gets 1/4 of the lease royalty (2) the 4 of us sell to a 3rd party outside the family and reserve 1/2 NPRI … absent of expressed language to the contrary, while the executive party can lease and get all of the bonus/rental and his 1/2 of the royalty, he cannot bind pooling of your royalty; rather, you have to ratify the lease in so far as to the pooling authority is conferred and you need to be carefull about this. Lots of pot-holes in this road, approach with caution the overtures of your landman/lessee.

Thank you for all of the information. I think I understood the last sentence the best (regarding caution). I realize that I should contact a lawyer but is there anyway in the meantime to investigate whether the land is being pooled. I see from the RRC website that there is a producing well on the tract of land next to mine, but am having problems finding out who the operator is.

Need to know the County, Survey# and perhaps the operator/API#/RRC# of the mentioned well. Operators are required file a P-12/Certificate of Pooling with the RRC; but, it may be different from that recorded in the County, you’ll need to check (on-line?) on the County Clerk’s Office if there has been a Designation of Unit filed.

Liz B said:

Thank you for all of the information. I think I understood the last sentence the best (regarding caution). I realize that I should contact a lawyer but is there anyway in the meantime to investigate whether the land is being pooled. I see from the RRC website that there is a producing well on the tract of land next to mine, but am having problems finding out who the operator is.

Thanks so much Rocky,

I have been trying to find out the API# but am just not savvy enough. It is located in Houston County about 1 1/2 mile south of Lovelady. More specifically 1 mile Northeast of the intersection of Hwy 19 and county road 4065. It is the only operating well in that small area. Abstract #225332. Can you help me find the API# or operater from that?

Rocky Arrell said:

Need to know the County, Survey# and perhaps the operator/API#/RRC# of the mentioned well. Operators are required file a P-12/Certificate of Pooling with the RRC; but, it may be different from that recorded in the County, you'll need to check (on-line?) on the County Clerk's Office if there has been a Designation of Unit filed.

Liz B said:
Thank you for all of the information. I think I understood the last sentence the best (regarding caution). I realize that I should contact a lawyer but is there anyway in the meantime to investigate whether the land is being pooled. I see from the RRC website that there is a producing well on the tract of land next to mine, but am having problems finding out who the operator is.

Hello Liz -

I am far from the expert on this forum but try this link:

http://gis2.rrc.state.tx.us/public/startit.htm

It has an area where you can insert the abstract number.

You can also zoom in on the map for your area to see wells drilled and then click on each well on the map to get specifics.

I hope that helps !!!

Liz B said:

Thanks so much Rocky,

I have been trying to find out the API# but am just not savvy enough. It is located in Houston County about 1 1/2 mile south of Lovelady. More specifically 1 mile Northeast of the intersection of Hwy 19 and county road 4065. It is the only operating well in that small area. Abstract #225332. Can you help me find the API# or operater from that?

Rocky Arrell said:

Need to know the County, Survey# and perhaps the operator/API#/RRC# of the mentioned well. Operators are required file a P-12/Certificate of Pooling with the RRC; but, it may be different from that recorded in the County, you'll need to check (on-line?) on the County Clerk's Office if there has been a Designation of Unit filed.

Liz B said:
Thank you for all of the information. I think I understood the last sentence the best (regarding caution). I realize that I should contact a lawyer but is there anyway in the meantime to investigate whether the land is being pooled. I see from the RRC website that there is a producing well on the tract of land next to mine, but am having problems finding out who the operator is.