Energy Industry (Oil & Gas)/What is a Royalty Deed?

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Question
Hello,
My husband and I have read over the Gift Deed for our land which was prepared over 20 years ago. There is also a Royalty Deed. We are somewhat confused on the Royalty Deed as my husband's father really never explained this deed to him. We always just assumed that being that the acreage was deeded to us the royalties were as well. There were five boys in my husband's family and each boy was gifted a parcel of land. We live in Texas and have been recently pooled into a well. The Royalty Deed reads that, for example: Preparation of Royalty Deed - father-in-law's name et, ux, my husband's name, covering xxx acres of land, a part of XXX Survey, Our County, Texas. In this it lists all of his brothers. Does this mean that his 4 brothers will get equal share to whatever royalties there might be? When the land was leased by the oil company, nothing of this nature ever came up in conversation. The company just needed a copy of the Gift Deed. We are just concerned that there is some fine print that was overlooked. Thank you for your time.

Answer
Hello Julie Ann.  Based upon the deed language, it sounds like your father divided up the royalty in equal shares among the brothers.  Of course, I would have to see the deed to be sure. This would not have come up during leasing if your husband owned all of the leasing rights in the property. Royalties are dealt with in the division order that will be prepared once production is obtained on the pooled unit.  The brothers also may be asked to ratify each other's oil and gas leases because pooling provisions in a lease are not binding on non-participating royalty interest owners without their consent.

It sounds like things are in order here.  Good luck and let me know if you have any other questions.  

Energy Industry (Oil & Gas)

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David 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 37 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.

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