There have been a number of instruments filed of record in Midland and Reeves Counties lately styled "Royalty Leases" which have generated quite a bit of discussion in individual County discussion groups. I'd like to get a broader discussion going.
The "Royalty Lease" appears to be an instrument designed to look like an Oil and Gas Lease, when in fact it is a conveyance of 3/4 of the royalty interest owned by the grantor, usually under a soon to be producing or already producing tract of land.
Another bunch of guys giving landmen a bad name.
Are you saying that some of these "lease" are contracts to buy 3/4 of the rights?
Im saying they are conveyances of 3/4 of the royalty under an existing oil and gas lease. The instruments contain words of grant and cover all of the grantor's interest in royalties in the lands involved, usually save and except any current production. The "lease" reserves 1/4 of the royalty under the lease to the grantor.
I've found these so far in Reeves, Midland and Glasscock Counties. I know of several mineral owners who have initiated lawsuits against Ridge Resources and others. All these suits are in the early stages, but it's very likely that these leases may be found to have been obtained fraudulently. Most of the lessors I've talked to have said that the trade was described as a "top lease" and was never described as a sale of 3/4 of the royalty interest.
Thank you for this information we do not want to make that mistake with the mineral rights we have just discovered.
Ours are dated from the 1960s.
The lawsuit in Reeves is ongoing. It alleges fraud, deceit, and may lead to charges of some sort of "malfeasance" on the part of the attorney involved in drafting the instrument.
In effect, an attorney board certified in Oil and Gas Law should know better than drafting an instrument designed to mislead someone into thinking its an Oil and Gas Lease.
The action seeks to completely set aside the "Royalty Leases".
Ours is old. Going back to the 1960s.