In Texas, you read that an oil and gas lease is an actual conveyance of the mineral estate via contract for a term, with it returning to the grantor when the lease expires from production ending or filing a release of minerals and they return to the grantor.
So in most leases, it states in plain terms that if the ownership of the property changes, the lease will continue and will return to the grantor upon ending. So if the property is conveyed, it should be the property interest you hold. The other has been conveyed in an actual conveyance “lease contract,” so what the grantor has in possession at the time of conveyance is a Royalty in the actual production of oil or gas or both. Also, as a reward, they give you a lease bonus with another reward for Delayed Rentals for signing a contract with them.
So if your royalty to be received from lease if there is production is, for example, 1/5 of oil and gas delivered to the credit of the lessor free of cost in the pipeline. This is 1/5 of the oil and gas produced from the mineral acres you have in the well. This is free of the cost of production and drilling cost to the pipeline.
The only difference is: Who is to say that an NPRI owner didn’t reserve a 1/5 Free royalty in and to all the oil, gas, and other minerals in, upon, or under while under an oil and gas lease free of cost of production? The NPRI would receive 1/5 of the production while the so-called executive would receive a lease bonus and 1/5 of the mineral acres they held in the well free of cost of production.
If you sell the surface and reserve a 1/5 royalty because the lease royalty is all you held, you would end up with just an NPRI because you didn’t reserve something you did not hold. You can’t convey what you don’t have, so if you sold the land and conveyed 4/5ths of a land you only had 1/16 in, there would be a problem.
So how can an interest pass to grantee when you don’t possess it, you didn’t convey by writing it in deed, but when lease is over it passes to the grantee if you don’t reserve something you don’t possess? Just a question.