AboutDavid B. McCall Expertise Questions regarding oil and gas exploration and production, the operation and management of oil and gas producing properties, and questions related to mineral ownership, title problems, and oil and gas leases.
Experience I am Board Certified in Oil, Gas and Mineral Law in the state of Texas. I have more than 34 years of experience in the industry as both an in house attorney for major oil companies and as a partner in oil and gas firms. I am also a mineral owner and receive royalties from oil and gas production. I have extensive title examination experience, and have represented clients in many administrative and court proceedings.
Organizations State Bar of Texas, Texas Bar Foundation, and Austin Bar Foundation.
Publications Various state bar seminars on Oil and Gas matters.
Education/Credentials I have a business degree in marketing from McMurry University, 1971, and a JD degree from Texas Tech University in 1974, where I graduated 17th in my class. Board Certified in Oil, Gas and Mineral Law in 1986.
Question Has anyone seen a recent instrument that is called a Nonparticipating Royalty Lease? I buy minerals and royalty, recently a royalty owner informed me of an offer to LEASE his NPR interest for a specified term or until the end of production. I have of course seen a Term Royalty Deed, I wonder if this is the same instrument with a different name. Any information would be appreciated.
Thanks: J.R.
Answer Hello. Yes, I have seen NPRI leases and they are more common than you might think. While the NPRI is a non possessory interest, it is a real property interest in most states and is part of the "bundle of sticks" which make up the mineral estate. The effect of an NPRI lease is to convey to the lessee the NPRI owner's right to ratify a lease and effectuate a pooling of royalty in situations where a pooled unit has been formed. Pooling is not normally binding on an NPRI owner without his consent. Other ways an NPRI owner can consent to the pooling is to join in the lease by the holder of the executive rights, or execute a seperate ratification of either the executive lease or the pooled unit itself. All of these methods demonstrate an intent to permit pooling of the NPRI interest.
An NPRI lease is not really that much different that the lease of a non possessory life estate interest, who can execute his own lease even though his lease is not effective without the joinder of the remainderman in either the same lease or in a seperate lease.
This type of lease is not the same as a term royalty deed.
